Health Reform expected to lower the federal deficit but not health care costs to employers in the short term

In a New England Journal of Medicine perspective piece, Peter Orzag, Director of the Office of Management and Budget, and Ezekiel Emanuel, a special advisor on health policy to the OMB and chair of the Department of Bioethics at the National Institutes of Health, outline their perspectives on “Health Care Reform and Cost Control.”

They state that current projections show total health care expenditures as a percentage of GDP being 0.5% lower in 2030 than they would have been without the passage of health care reform. However, the majority of the cost savings come from Medicare and Medicaid and not from a reform to the health care delivery system, which would result in lower costs for employers to offer health care to employees. Additionally, employers will be contributing to the government’s cost savings beginning in 2018 with the onset of the tax on “Cadillac” insurance plans.

Orzag and Emanuel go on to emphasize the need for health care delivery reform, and highlight three areas they believe will have the potential to cut costs across the board. Two of these three areas have the potential to directly affect the cost of health care to employers: The Patient-Centered Outcome Research Institute, which will research the effectiveness of various medical technologies and interventions, and the Innovations Center, which will develop, test and evaluate new policies and programs that enhance the quality of care for Medicare beneficiaries, reduce their cost of care, or both.

To read the full NEJM article click here