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Rachel Nuzum Senior Policy Director, The Commonwealth Fund Alliance for Health Reform Briefing

Explore strategies to lower healthcare costs and finance health reform for improved coverage. Learn about alternative scenarios for saving trillions and implications for stakeholders. Understand key considerations for bending the cost curve and aligning incentives.

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Rachel Nuzum Senior Policy Director, The Commonwealth Fund Alliance for Health Reform Briefing

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  1. You Can’t Have One Without the Other: Bending the Healthcare Cost Curve & Financing Health Reform Rachel Nuzum Senior Policy Director, The Commonwealth Fund Alliance for Health Reform Briefing July 31, 2009 rn@cmwf.org www.commonwealthfund.org

  2. 6.5% annual growth 5.2% annual growth 4.6% annual growth THE COMMONWEALTH FUND Total National Health Expenditures (NHE), 2009–2020:Current Projection and Alternative Scenarios NHE in trillions $5.0 $4.4 $4.1 $2.5 Source: C. Schoen, K. Davis, S. Guterman, and K. Stremikis, Fork In the Road: Alternative Paths to a High Performance U.S. Health System, The Commonwealth Fund, June 2009.

  3. Sources of Path Savings, Net Impact on Federal Budget and National Health Expenditures Compared to Baseline, 2010–2020 (in billions) Source: The Commonwealth Fund Commission on a High Performance Health System, The Path to a High Performance Health System: A 2020 Vision and the Policies to Pave the Way, The Commonwealth Fund, February 2009.

  4. Savings Can Offset Federal Costs of Insurance:Federal Spending Under Two Scenarios Dollars in billions Data: Estimates by The Lewin Group for The Commonwealth Fund. Source: The Path to a High Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way, February 2009.

  5. Implications for Stakeholders • Coverage and Savings • Coverage for all with $3.0 trillion system savings 2010-2020 with public health insurance plan; $0.8 trillion without • Coverage for all with $200 billion federal budget cost 2010-2020 with a public health insurance plan; $700 billion without • Employers and Employees • Public health insurance plan more affordable than premiums now in small business market: 20-30% lower premiums • Savings to employers including payment and system reforms of $231 billion over 2010-2020 • Providers • Provider revenues enhanced by increasing Medicaid payment to Medicare levels and buying in uninsured at Medicare rates • Payment reforms reward primary care and high performers but slower revenue growth over time than current law • Insurers • Rewards integrated delivery system and private insurers that enhance value • Administrative savings of $337 billion over 2010-2020

  6. Key Considerations • Important to focus on both federal budget costs and total health spending • Payment and delivery system reforms are needed to bend the health care cost curve • Aligning patient and provider incentives to reward high value, effective care is important • Need for a mechanism to measure and monitor progress

  7. Thank You! Steve Schoenbaum, Executive Vice President Karen Davis, President Stu Guterman, Assistant Vice President Cathy Schoen, Senior Vice President Stephanie Mika, Program Associate

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