As Dr. Emanuel, senior fellow at the Center for American Progress, points out, healthcare spending has slowed in recent years. Per-person Medicare and Medicaid costs have decreased due to multiple factors, including the recession and the PPACA. Nevertheless, experts believe healthcare costs will still be on the rise in years to come.
Although the Obama administration announced that 50 percent of Medicare payments will be made under new payment models by 2018, Dr. Emanuel believes that President Obama should focus on reforms that can be scaled. While the implementation of accountable care organizations was a step toward decreasing costs, studies have found that ACOs only achieved minimal savings after two years. “A cost-control strategy that relies on expanding the number of ACOs won’t be successful,” Dr. Emanuel asserted.
Instead, Dr. Emanuel recommends a bundling strategy. Medicare could bundle physician services, hospital costs, tests, medical devices, drugs and rehabilitation services related to common ailments. It would then pay medical providers a discounted amount for all of the services. Such an approach would make savings immediate and guaranteed. It would also give private payers the opportunity to utilize the bundle as their payment method and would work in rural areas for smaller hospitals.
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