Obama's $100 billion in savings?
Posted: Monday, June 15, 2009 10:59 AM by Domenico Montanaro
Filed Under:
Barack Obama
From msnbc.com’s Tom Curry
In Office of Management and Budget Director Peter Orszag’s conference call with reporters late Friday afternoon, he touted the cost savings that the Obama administration would get by forcing hospitals, outpatient clinics, and medical device makers to become more efficient.
He claimed the administration would be able to save $100 billion over 10 years, mostly within Medicare, by requiring medical providers to meet productivity benchmarks set by the Bureau of Labor Statistics.
“Payment reimbursement rates would rise more slowly,” Orszag told reporters.
As chief of the Congressional Budget Office last year, Orszag presided over the writing of a book, issued last December, which detailed 115 options for cutting costs and improving efficiency in medical care. So it was no surprise when on Friday’s conference call, Orszag cited that CBO report and even specified “Option 54” as his authority for the claimed savings of $100 billion.
Quoting from the CBO report, he told reporters that the current system of paying providers “overcompensates” them and doesn’t force them to become efficient. But those on the conference call who had the CBO book open in front of them could see that Orszag was quoting selectively.
Right after the passage he read to reporters was this warning from the CBO: “An argument against this option is that reducing the payment updates might cause some providers to lower the quality of care they provided or to stop serving Medicare beneficiaries altogether. In addition, different types of health care services may be more capable of achieving such productivity increases than others are. If so, this option could cause considerable hardship for providers that are not able to increase their productivity by the amount assumed in the update.”
