Oct 30 2010
The Fiscal Times explores whether the Medicare pilot programs in the new health law will end up saving money.
"Over the past decade, Medicare ran a pay-for-performance, shared savings demonstration project with ten group physician practices on the cutting edge of raising health care quality in the U.S. It was a major test of two of the cardinal tenets of health care reform: that raising quality lowers costs, and that group practices offer the best vehicle for weaning physicians from fee-for-service medicine. … The project was launched in 2005 after five years of planning. By the end of the third year, all ten groups had achieved fairly high levels of performance — not surprising given the historic emphasis on quality within those organizations. ... But only five groups generated any savings, according to CMS, sharing about $25 million of Medicare's $32 million in lower costs."
CMS is moving quickly to begin the demonstration projects authorized by the new health law, "[b]ut skeptics abound, starting with the Congressional Budget Office. It projected a scant $1.3 billion in savings from all the demonstration projects recommended in the bill, although it admitted it had no real way of scoring the legislation since many of the programs either hadn't been designed or had no track record" (Goozner, 10/25).
 This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.
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