Center for American Progress

RELEASE: New CAP Plan Yields $385 Billion in Health Care Savings Without Harming Beneficiaries
Press Release

RELEASE: New CAP Plan Yields $385 Billion in Health Care Savings Without Harming Beneficiaries

Read the report.

Washington, D.C. — As our nation’s leaders prepare for the upcoming fiscal cliff negotiations, the Center for American Progress today released a comprehensive plan to reduce federal health care spending by $385 billion over 10 years without harming patients. CAP’s Senior Protection Plan is an alternative to proposals that slash federal health care spending by simply shifting costs to seniors, children, and disabled people.

“Cutting federal health care spending by shifting it onto others is blunt and shortsighted—it doesn’t reduce health care costs. But there’s a better way: Our approach reduces overall health care costs without forcing seniors, children, and disabled people to forgo necessary care,” said Neera Tanden, President of the Center for American Progress. “Our proposals focus on reforms that strengthen these programs and reduce national health expenditures, helping make America more competitive in the long term.”

The report released today includes savings estimates of CAP’s proposals, relying on estimates by the Congressional Budget Office and the Medicare Payment Advisory Commission wherever possible. All told, the plan would produce federal savings in excess of $385 billion over 10 years. In addition to the plan’s savings, its tax policies related to health care would generate up to $100 billion over 10 years. But most importantly, the plan includes an array of systemic reforms that would transform the health care system and bend the cost curve over the long term.

“It’s important that this plan contributes substantially to deficit reduction,” said Dr. Ezekiel Emanuel, Senior Fellow at the Center for American Progress. “But more importantly, the plan includes systemic reforms—moving to market-based prices, ending fee-for-service, and empowering states to control costs—that will modernize Medicare and transform the entire health care system to improve quality and bend the cost curve over the long term.”

The Senior Protection Plan includes cost containment proposals within the following categories:

  • Enhance competition based on price and quality
  • Increase transparency of price and quality information
  • Reform health care delivery to provide better care at lower cost
  • Repeal the Sustainable Growth Rate mechanism
  • Reform graduate medical education and the workforce
  • Reduce drug costs
  • Bring Medicare payments into line with actual costs
  • Cut administrative costs and improper payments
  • Reduce the costs of defensive medicine
  • Reform the tax treatment of health insurance
  • Promote better health

“It is urgent and feasible to make Medicare secure and health care sustainable by improving care and representing the best interests of seniors,” said CAP Senior Fellow Dr. Donald Berwick. “Focusing without compromise on the needs of patients first is the right approach and the best solution. The Senior Protection Plan uses the best we know to control costs and improve care at the same time.”

Read the report:The Senior Protection Plan: $385 Billion in Health Care Savings Without Harming Beneficiaries

To speak with an expert on this topic, please contact Katie Peters at [email protected] or 202.741.6285.