The Obama administration said it has identified an additional $313 billion in savings, primarily from Medicare, which will translate into lower federal payments to hospitals.
The lions share of the cuts will come from measures that would pay hospitals less as they become more efficient, reductions in federal subsidies that they receive for treating uninsured patients and better prescription drug pricing.
In a conference call with reporters, White House budget chief Peter Orszag detailed the savings: $110 billion by incorporating productivity adjustments into the way Medicare pays providers; $106 billion from disproportionate-share hospital payments; and $75 billion by better Part D pricing. All numbers are projected over a 10-year window.
According to an advance transcript of President Barack Obamas June 13 weekly address, These savings will come from commonsense changes.