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White House adviser sees cost growth slowing—eventually


By Matthew DoBias
Posted: December 14, 2009 - 2:30 pm ET
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The White House's chief economic adviser acknowledged that healthcare costs would rise in the short term under a reformed system, but said that the market would gradually see about a 1 percentage point decrease in cost growth per year beginning five years out and extending over the long term.

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Christina Romer, chairwoman of the Council of Economic Advisers, said that both the Senate and House bills contain measures that would slow the rising costs of care in America, with a raft of changes to how Medicare pays providers leading the way.

Romer cited provisions that would lead to bundled payments, accountable-care organizations and an independent Medicare advisory board as cost-reduction leaders on the public side, adding that the creation of a so-called insurance exchange, administrative simplification and a tax on high-dollar plans would drive changes on the private side. “The bills, as they are coming through, will genuinely slow the growth rate of healthcare spending,” Romer said on a conference call with reporters.

While Romer said that the 1 percentage point reduction in costs is a conservative estimate, other assessments have differed. CMS actuaries said last week that total national health expenditures under the Senate bill would increase by roughly $234 billion, or 0.7%, from 2010 to 2019.

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