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WASHINGTON - President Barack Obama's State of the Union address highlighted an aspect of the healthcare debate that shows how much Democrats have riding on finding new ways to cut Medicare and Medicaid costs without cutting enrollment.
Obama's theme – “We do big things” – could never be more important than now. Recent reports put healthcare spending at 17 percent, up from 16 percent the previous year.
The President focused much of his speech on the federal deficit and called for further reductions in healthcare spending. Programs like Medicare and Medicaid, “are the single biggest contributor to our long-term deficit,” he said.
Obama said he is counting on health insurance reform to slow these rising costs.
There are innovations found in the Affordable Care Act to slow costs and improve quality of care in the long run, but these haven’t been tried on a national scale. Federal actuaries have said it’s difficult to project the financial impact these programs may have in the future. The programs include accountable care organizations, value-based payments for providers, a pilot to bundle payments, a Medicaid global payment demonstration project, Medicaid payment reforms for hospital-acquired conditions, Medicaid payment reforms for the medical home model and payment reforms to reduce hospital readmissions. The ACA established the Center for Medicare and Medicaid Innovation to oversee the programs, and the President is riding on the advancement of healthcare IT to drive all of it.
Some on Capitol Hill hope for these trial programs to become “big things,” while others say they’re doomed from the start. The part no one is debating, however, is the impact the burgeoning healthcare tab is placing on America’s competitive opportunities in the worldwide marketplace.
Obama wants to see America back on top. When it comes to federal cutbacks, he told Congress, he is willing eliminate “whatever we can honestly afford to do without.” Evidently, innovation – even payment reform innovation – isn’t included in that list.
“Cutting the deficit by gutting our investments in innovation … is like lightening an overloaded airplane by removing its engine,” he said. “It may feel like you’re flying high at first, but it won’t take long before you’ll feel the impact.”