APMA News - November/December 2023 - 11

CMS projects that Medicare alone will cost $1.7
trillion by 2030, or 4.8 percent of projected GDP.4
There are some obvious reasons for this including
an increase in US life expectancy, with aging populations
experiencing higher rates of cancer, as well as
cardiac and orthopedic pathology. There is also the
cost of innovation. This includes development of
groundbreaking drug therapies, new and improved
diagnostic imaging, and advances in clinical procedures
such as robotic-assisted surgeries, minimally
invasive cardiac and vascular procedures, and orthopedic
implants, to name but a few.
The increased cost of providing health care
is mirrored and magnified in the rates we pay
for commercial health insurance. For-profit
health insurance companies can point to the
many reasons outlined above for rising premiums.
Certainly, commercial payers care about
clinical outcomes and are employing measures
to improve population health. But commercial
insurance premium inflation also reflects shareholder
expectations and an intrinsic profit-centric
compensation model for executive and
administrative teams.
Federal-based health insurance programs under
CMS are not profit-centric. Medicare cannot unilaterally
increase insurance premiums or control
its congressionally mandated funding. As a result,
Medicare's budget has not kept pace with the cost
of living, let alone with rising use and innovation
costs. Absent a for-profit motive, CMS' focus on
quality outcomes and patient satisfaction are more
altruistic and, by necessity, its efforts to control
cost are more imaginative and creative.
CMS could improve its operating budget by
reflect a history of disparity in access to care for
people of color and for low-income patients.
Improving clinical outcomes and controlling
costs also require serious and meaningful support
from policymakers who control funding for public
health insurance programs, including Medicare,
Medicaid, and mental health initiatives, and for
family planning to help break the cycle of poverty.
Why do we need VBC?
One measure drawing attention is cost. The US has
experienced increased health-care costs at rates far
greater than the cost of living for decades. Health
care in the US is a $4 trillion industry that represents
nearly 20 percent of the gross domestic product.1
dramatically expanding the number of enrollees
(Medicare for all). However, development of a
national health plan would require higher taxes and
insurance premiums plus buy-in from younger and
healthier individuals who may not voluntarily join
such a plan. As demonstrated during the Obama
administration, universal health care in the United
States currently lacks meaningful political, public,
and commercial support.
Current Medicare and Medicaid cost containment
efforts have focused on improving system
capabilities, including prepayment audits to fight
fraud and abuse. Medicare has enacted policies
such as reduced payments for multiple procedures
performed on the same day by the same provider
and reduced the value and payment for individual
procedures through a rigorous process of utilization
screens conducted with provider input at the
AMA Relative Value Update Committee (RUC).
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APMA News - November/December 2023

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