The head of the Centers for Medicare and Medicaid Services outlined the Bush administration’s plans for helping to bring down costs to the system by creating incentives for efficiency of care at a hearing of a House Ways and Means subcommittee.
“Together with Congress, we have made great strides in modernizing and improving health care benefits, but there is more work to be done,” acting CMS Administrator Kerry Weems said in testimony submitted to the subcommittee. The budget request for fiscal year 2009, he said, “builds on these past efforts by updating and strengthening our payment systems, beginning to incorporate value-based purchasing strategies, improving quality and efficiency while restraining costs.”
However, Weems noted that the costs of the program remain significant, and that the legislative branch has not cooperated with every proposal put forth to reduce costs. The budget proposal for 2008 sought to address rising costs, he said, “but Congress did not act to curb spending” during its deliberations in 2007. “In fact, in some cases, Congress intervened to stop CMS from implementing savings proposals.”
Overall, Weems said the fiscal year 2009 budget request includes $486 billion in total gross mandatory spending for Medicare program benefits. Should the administration’s proposals to cut costs be enacted, he said, they would produce a net savings of $12.8 billion in fiscal year 2009 and $182.7 billion over the next 5 years while cutting the average annual growth rate of the programs from 7.2% to 5%.
“Make no mistake, this level of savings is not enough to shore up Medicare permanently,” he warned. “By extending near-term solvency, however, we do create opportunity to devise and enact the vital, more permanent reforms that are required.”