Filed Under:Health Insurance, Individual Health

Witness: Medicare needs help from private payers

U.S. Capitol (AP photo/Jacquelyn Martin)
U.S. Capitol (AP photo/Jacquelyn Martin)

Managers of Medicare need help from private insurers to get controll over health care costs

Robert Reischauer, an economist who serves as a trustee for the Medicare and, made that argument today at a hearing on Medicare finances organized by the House Ways and Means health subcommitte.

Reischauer noted that Medicare managers have had trouble making spending-control provisions, such as the sustainable growth rate (SGR) system, actually take effect.

Legislation and regulation have more effect over U.S. Medicare health care promises than market forces do, Reischauer said. 

Medicare makes up such a large fraction of the overall health care market, but that does not mean Medicare is free to set its own course with respect to future cost growth, Reischauer said.

One illustration of Medicare's weakness is Medicare's inability to impose the 25 percent cuts in physician pay required by the SGR system and adopt new efficiency measures, he said.

To make that kind of shift in mode of delivery, Medicare needs help from its peers, Reischauer said.

"A transition will not happen unless private payers as well as Medicare continue to pursue cost saving innovations aggressively and providers respond to incentives to moderate cost growth and improve quality," he said. "Medicare’s ability to moderate the growth of its costs over the long run depends critically on the private sector’s success in its efforts to slow its spending and vice versa."

An earlier version of this story described the origins of the SGR system incorrectly. The system was created by the Balanced Budget Act of 1997.

See also:

Featured Video

Most Recent Videos

Behind the scenes with Vicki Gunvalson [VIDEO]

Provided by LIFEHEALTHPRO

In this exclusive interview, Vicki Gunvalson shares how she built a $15 million a year annuity business by planning for...

Regulator: Market may need to reinvent LTCI

Provided by LIFEHEALTHPRO

Cioppa says Maine's governor wants to spur the creation of better products.

Dementia: It's more than Alzheimer's

Provided by LIFEHEALTHPRO

An association calls for policymakers to remember lesser-known neurodegenerative conditions.

Protesters Disrupt WellPoint Annual Meeting

Provided by LIFEHEALTHPRO

Hecklers call for more disclosures of information about political contributions.

Related resources

More Resources

Comments

Power your business with up-to-the-minute insurance news, analysis, and best practices from LifeHealthPro Daily eNewsletter – FREE.

Power your business with LifeHealthPro Daily eNewsletter – FREE.

Enter a valid email address.
Close
Nichole Morford

Nichole Morford
Managing Editor

Thank you for subscribing to LifeHealthPro Daily!

Check Out More eNewsletters Now! Close

Advertisement. Closing in 15 seconds.