CBO: Medicare cost-cutting programs haven’t worked

Programs designed to cut Medicare spending and improve the quality of healthcare have mostly failed, according to the Congressional Budget Office.

The findings are a blow to existing Medicare projects as well as a key goal of the healthcare reform law.

There is widespread support, in Congress and among economists, for the broad ideal that Medicare would save money if it paid for better outcomes instead of more procedures. But 20 years of trying to shift the program in that direction have yielded little to no progress, CBO said Wednesday.

CBO analyzed six programs designed to improve care coordination for patients with chronic diseases. They either made no difference or were actually more expensive than the traditional payment system.

The CBO report also looks at four “value-based purchasing” demonstrations, in which doctors received financial incentives to improve quality. One of those programs successfully saved money; the others had no effect.

“Demonstrations aimed at reducing spending and increasing quality of care face significant challenges in overcoming the incentives inherent in Medicare’s fee-for-service payment system, which rewards providers for delivering more care but does not pay them for coordinating with other providers,” CBO said.

The healthcare law includes several programs designed to improve care coordination and improve quality, including a new type of integrated health system known as accountable care organizations. Like many of the programs assessed in the CBO study, the heathcare reform initiatives either offer bonus payments to participating doctors or give them a share of any savings to the Medicare program.

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