Blog: What would health policy wonks do?

Economists, physicians and policymakers have put forward alternative arguments for how to best curb health spending in separate papers published online by the New England Journal of Medicine.

What follows are summaries of the pair of proposals, one that relies on state regulation, federal incentives and Medicare policy to push reforms and another that would convert Medicare from a guarantee of benefits for seniors into a program that provides enrollees with a subsidy to buy insurance.

The former was recommended by nearly two dozen health policy experts including recognizable names such as Dr. Donald Berwick, former head of the agency that oversees Medicare and Medicaid; David Cutler, a Harvard University health economist; and Peter Orszag, former director of the Office of Management and Budget.

The 23 authors made 11 recommendations, which you can read in full here (PDF). The list, they wrote, included proposals with a chance of working and being adopted.

Here are a few of the highlights: State health insurance exchanges, a feature of the Patient Protection and Affordable Care Act, should require at least one insurance product with tiered out-of-pocket costs for the use of high-quality, lower-cost providers, the proposal said. States should also determine a global health spending target to be enforced by providers, payers, employers, consumers and economists.

Medicare could rapidly adopt bundled payments and should, along with Medicaid, convert three-quarters of its payments to something other than fee-for-service within 10 years, they said.

They also called for more transparent prices and information about bundled costs for services, out-of-pocket spending and quality.

An alternative approach, proposed by the Joseph Antos, Mark Pauly and Gail Wilensky, calls for Medicare to adopt “fixed-dollar subsidies—effectively shifting Medicare from a defined-benefit to a defined-contribution approach” that the authors said would allow Medicare to compete with private health plans for business.

The authors suggested an overhaul to break Medicare into regional fee-for-service plans more “capable of responding in a timely fashion to developments in a local market” under regional chief executives.

They also proposed a tax credit to replace the tax break for employer-based insurance premiums.

You can read the proposal here.

Follow Melanie Evans on Twitter: @MHmevans.