In a conference call with reporters a day earlier, White House budget chief Peter Orszag detailed the savings: $110 billion from incorporating productivity adjustments into the way Medicare pays providers; $106 billion by cutting how much the government subsidizes hospitals for treating uninsured patients; and $75 billion by refiguring prices within the Part D program. All numbers are projected over a 10-year window.
About $22 billion more in savings would come from the implementation of payment adjustments recommended by the Medicare Payment Advisory Commission, including those for IRFs, SNFs and long-term acute-care facilities. Measures to cut fraud and abuse within federal health programs and one that would lower physician payment rates for imaging services are also part of the plan.
In its most recent report, MedPAC recommended freezing payments to IRFs and SNFs, and would give LTACs an increase of 1.6% next year.
In many cases, those provider sectors are often linked to hospitals, meaning that pay reductions to them often have a financial impact on hospitals.
The $313 billion in projected savings is on top of $635 billion the administration has already carved out as part of its "down payment" to pay for healthcare reform this year, Orszag said, adding that the combined dollar amount "is in the ballpark" of what Congress expects to pay for legislation.
While many federal lawmakers have publicly stated that health reform legislation would come in at about $1 trillion, many more in the last several days have said privately that the number could be higher.
Even so, Obama continued his pledge that an overhaul to the U.S. healthcare system won't add to the federal deficit over the next decade. "However," he added, "any honest accounting must prepare for the fact that healthcare reform will require additional costs in the short term in order to reduce spending in the long term."