Newly minted CMS Administrator Donald Berwick, MD, is striking back against a claim by former HHS Secretary Michael Leavitt that the projected savings from health reform are "an illusion" born of statistical sophistry. In an op-ed piece published in today's (Sept. 3) issue of The Washington Post, Dr. Berwick says Leavitt is "incorrect" and cites a variety of provisions in the law that would improve health outcomes for seniors.
Leavitt had argued in his op-ed -- also published in The Post -- that the hundreds of billions in projected savings over the next decade are based on "double counting" of the Medicare savings generated by health reform. You can read Charles' detailed and even-handed accounting (no pun intended) of which side is right about "double counting" in his earlier blog post.
Berwick doesn't go into too much detail but he refutes the double counting argument, writing that it's "inaccurate and oversimplifies what is really going on." The key point he makes is that savings from reduced Medicare spending and new tax revenue go toward the Medicare trust fund. Anything in the fund that's left over after covering immediate expenditures is invested in Treasury bonds. "These dollars are used to help cover other investments, such as expanding health coverage to 34 million uninsured people," Berwick writes. "Later, when the trust fund needs to cash in its Treasury bonds, they are repaid, with interest."
Regardless of who you believe on the issue of double counting, Berwick makes it clear that health reform's biggest benefits to Medicare are improved preventive coverage, a fast-track to pay-for-performance and the creation/implementation of novel ideas such as bundled payments, accountable care organizations and a Medicare Innovation Center to test further novel ideas for payment systems.