Had Medicare spending kept growing at its breakneck pace of the 2000s, the program would have spent $316 billion more since 2009, according to a new analysis by the Obama administration.
Spending by the seniors’ health insurance program is still growing, but at a rate slower than previously expected. The administration is hoping to cut Medicare spending even more by basing more payments to healthcare providers on quality instead of quantity, thereby incentivizing them to cut down on waste.
The analysis released Wednesday shows how existing efforts in that direction are already working, officials said, pointing to some alternative payment experiments prompted by the Affordable Care Act, fraud-prevention efforts and efforts to cut down on excess hospital readmissions.
“This is a good result for the taxpayer and our economy,” Health and Human Services Secretary Sylvia Mathews Burwell said. “We are also spending our dollars more wisely and improving the quality of care for Medicare beneficiaries. Using tools in the Affordable Care Act, we are changing the nation’s healthcare delivery system to one that achieves better care, smarter spending and healthier people.”
According to the analysis, Medicare’s spending per patient grew an average of 5.9 percent each year from 2000 to 2008. But from 2009 to 2012, the annual average growth was 1.8 percent and in 2013 was 0.2 percent.
The administration estimates that Medicare would have spent $316 billion more since 2009 if spending had continued growing annually at the earlier 5.9 percent rate.
Medicare’s hospital trust fund is projected to run dry in 2030. Other parts of Medicare, including its coverage for doctors and prescription drugs, don’t face insolvency.
