Event Recap: New Ideas to Lower Health Care Costs
On Wednesday, March 17, the Committee for a Responsible Federal Budget hosted a virtual event “New Ideas to Lower Health Care Costs." The event was part of the Health Savers Initiative, a collaborative project with Arnold Ventures and West Health.
The event featured keynote remarks by Senators Ron Wyden (D-OR) and Mike Crapo (R-ID), the Chairman and Ranking Member of the Senate Finance Committee. They were introduced by Cristina Boccuti, Director of Health Policy at West Health, and Erica Socker, Vice President of Health Care at Arnold Ventures, who also announced the release of three Health Savers Initiative policy options briefs designed to outline and estimate proposals to reduce health costs for households, businesses, and the federal government.
In their keynote remarks, both Senators Wyden and Crapo stated their commitment to addressing health spending and lowering health care costs. Senator Wyden mentioned his desire to continue bipartisan efforts to address prescription drug cost inflation and capping out-of-pocket spending for seniors, building on his work in the 116th Congress with Senate Finance Committee then-Chairman Chuck Grassley (R-IA).
Senator Crapo discussed how COVID has led to changes in telehealth and expedited approvals and authorizations of vaccines, diagnostics and treatments. These changes, he mentioned, showed the value of health care innovation but admitted that such treatments are less useful when they are unaffordable to Americans, and highlighted the need to address issues such as drug prices and the looming solvency crisis of the Medicare Part A Trust Fund.
Both Senators thanked the Committee for a Responsible Federal Budget for encouraging bipartisan action on Medicare and health care cost control and commended the Health Savers Initiative for its bold policy ideas.
The Senators were followed by an expert panel discussing Congress’s health care policy agenda and which cost-saving options should be considered by policymakers. The panel, moderated by Joanne Kenen of Politico, featured our Director of Health Policy Josh Gordon, Tricia Neuman of Kaiser Family Foundation, and Michael Chernew of Harvard Medical School. Gordon outlined the Health Savers Initiative’s three briefs on moving to site-neutral payments in Medicare, adjusting for overpayments to Medicare Advantage plans, and capping hospital prices.
Chernew mentioned how there is no silver bullet to addressing high and growing public health spending; rather there is a need for multifaceted solutions. Neuman spoke about a recent analysis done by Kaiser Family Foundation on the large hospital price differentials between Medicare and commercial insurance and the connection to higher patient premiums — similar to the findings of the Health Savers Initiative.
Neuman also highlighted the issue of overpayments in Medicare Advantage as a possible source of savings for the Medicare Trust Fund, and spoke about the ideas to lower prescription drug prices in the Senate Finance proposal mentioned by Senator Wyden, and in past legislation considered by the House of Representatives (HR 3).
In response to a question from Kenen about the likelihood of bipartisan action on prescription drug prices, Neuman said she was optimistic and that addressing drug costs could be used as an offset for other spending Members might want to pursue. Gordon made the distinction that even bipartisan ideas can be politicized, and that more generally, getting to sustainable levels of health care spending will require bipartisan compromises.
The three panelists agreed that it was time for the Center for Medicare and Medicaid Innovation (CMMI) to take action on expanding value-based-payment models and applying lessons learned rather than simply conducting more and more voluntary demonstration projects. The panelists also agreed that the public debate over Medicare-for-all and a public option sometimes glossed over the fact that much of the savings on total health care spending comes from lowering prices to providers as opposed to any other mechanism (like reducing insurer profits, for example).
In the coming months, the Health Savers Initiative will be releasing additional policy options, including some on prescription drug savings. We will also continue discussing the need for action on Trust Fund Solutions, including options to secure the Medicare Trust Fund.