Executive Summary:

We propose a framework for health care reform that focuses on supporting person-centered care. With continued innovation toward more personalized care, this is the best way to improve care and health while also bending the curve of health care cost growth.

Our health care system holds great promise. As a result of fundamental breakthroughs in biomedical science, improvements in data systems and network capabilities, and continuing innovation in health care delivery, care is becoming increasingly individualized and prevention-oriented. The best treatment for a patient involves not just specific services covered under traditional approaches to health insurance financing, but also includes new technologies and new kinds of care and support at home and beyond traditional health care settings. These advances require health care providers to work with patients and their caregivers to target increasingly sophisticated treatments and to coordinate care effectively ways that works best for each patient.

Our report’s person-focused reforms aim to support these changes in care—not as an afterthought or as an addition to our health care financing and regulation, but as the core goal. Instead of having to work around fee-for-service (FFS) payments and regulations that can complicate getting the highest-value care in each case, providers and patients will be able to receive more support for the specific approaches to care delivery that can make the most difference. The support comes from aligning reforms in provider payment, benefit design, regulation, and health plan payment and competition. To avoid short-term disruptions, our systematic framework involves a clear path that builds on existing reforms in the public and private sector, supports transitional steps to assist providers, and includes close evaluation and opportunities for adjustments along the way. While our primary goal is better health through better care, we estimate that our reforms would achieve an estimated $300 billion or more in net federal savings in the next decade, and provide a path to sustaining per capita cost growth that is much more in line with per capita growth in Gross Domestic Product (GDP). After the proposed reforms are implemented in the coming decade, long-term savings from achieving better health and sustainable spending growth will exceed $1 trillion over 20 years. Our proposals can be scaled up or down, and can also be combined with other proposed reforms to achieve additional reductions in health care costs. Our approach enables Congress to focus on overall cost, quality, and access goals that are very difficult to address under current law – so that whatever the spending level, that spending will do more for health.

These issues of health care quality and cost must be addressed. If a clear framework like ours is not implemented, the alternative is likely to be continued reliance on short-term cost controls, including across-the-board cuts in payments like sequestration, or delays and restrictions in both needed coverage updates for vulnerable populations and new types of innovative care—perpetuating large gaps in quality of care.

Our proposals represent an alternative to such care disruptions, cost-shifting, and threats to more innovative, person-focused care. We include proposals for Medicare, Medicaid, and private health insurance. We also propose a set of system-wide regulatory reforms and other initiatives, including antitrust and liability reforms. While some of these proposals are specific to particular programs and regulations, they are all grounded in our core goal of supporting quality care resulting in lower cost. This means a clear path for moving away from FFS payments and benefits and open-ended subsidies for insurance plan choices toward a direct focus on supporting better care and lower costs at the person level. Our proposals encompass significant reforms – such as modifications in Medicare payment mechanisms and benefits, and a change in the tax exclusion for employer-provided health insurance. The proposals reflect ideas that have gathered broad support in the past, but also include new approaches for addressing some of their shortcomings. Implementing our reforms together enables them to reinforce each other and create much more momentum for improving care while bending the cost curve.

Download the full report » (PDF)

Downloads

• Download the report
• Executive Summary

      

 

 

The Honorable Donna E. Shalala, president of the University of Miami and former U.S. secretary of health and human services, has agreed to affiliate with the Brookings Institution as a distinguished fellow, Brookings President Strobe Talbott announced today.

While remaining at the University of Miami, Shalala will participate in the work of the Economic Studies program at Brookings and its Engelberg Center for Health Care Reform. She will participate in a wide range of events and research projects and advance the program’s key initiatives on health care and social policy.

“We are honored that Dr. Shalala will lend her expertise, experience, and boundless energy to Brookings’s efforts to improve public policy,” said Talbott. “She will be a valuable asset to the Institution.”

In 1993, President Clinton appointed Shalala as secretary of the Department of Health and Human Services (HHS) where she served for eight years, becoming the longest serving HHS secretary in U.S. history. In that role, Shalala oversaw a wide variety of programs including Social Security, Medicare, Medicaid, the National Institutes of Health, the Centers for Disease Control and Prevention, and the Food and Drug Administration. At the end of her tenure The Washington Post described her as “one of the most successful government managers of modern times.”

“We are delighted that Donna will be joining the Economic Studies program and my colleagues and I look forward to working with her,” said Karen Dynan, vice president and co-director of Economic Studies at Brookings. “I am certain that her many years of outstanding public service will be invaluable as we address America’s critical economic and health policy challenges.”

Following her service in HHS, Dr. Shalala became professor of political science and president of the University of Miami in 2001. During her tenure, the university has solidified its position among top U.S. research universities. In 2007, President George W. Bush chose Shalala to co-chair with Senator Bob Dole the Commission on Care for Returning Wounded Warriors, to evaluate how wounded service members transition from active duty to civilian society. She was awarded the Presidential Medal of Freedom in 2008.

Shalala received her A.B. degree in history from Western College for Women and later served in Iran as one of the country’s first Peace Corps volunteers. She received her Ph.D. degree from the Maxwell School of Citizenship and Public Affairs at Syracuse University.

She served in the Carter administration from 1977-80 as assistant secretary for policy development and research at the U.S. Department of Housing and Urban Development. She later held tenured professorships at Columbia University, the City University of New York (CUNY), and the University of Wisconsin - Madison. She served as president of Hunter College of the City University of New York from 1980 to 1987 and as chancellor of the University of Wisconsin-Madison from 1987 to 1993.

Brookings’s distinguished fellows are individuals of particularly noteworthy distinction whose work across several fields of public policy puts them at the pinnacle of worldwide research and policy impact. Distinguished fellows are actively engaged in the life of the Institution, often with more than one of Brookings’s five research programs. In assuming the title, Dr. Shalala joins Itamar Rabinovich, an Israeli diplomat, scholar, and university president; Ed Rendell, former governor of Pennsylvania; Thomas Pickering, a career ambassador for the U.S. and former permanent representative to the United Nations; and Javier Solana, former secretary general of NATO and high representative for foreign and security policy of the European Union.