Health Care Reform Will Save Medicare Costs

Today’s Managing Health Care Cost Indicator is $575 billion        

The Washington Post reports that the health care reform bill will

  • -       Save $8 billion in 2011
  • -       Add 12 years of solvency to the Medicare trust fund
  • -       Save $575 billion over the next 10 years

Where is this money coming from?  For starters, Medicare will continue to increase in cost – just not as fast as it would have without the passage of health care reform.   The biggest losers (Modern Healthcare, registration required) 

  • -       Hospitals and other providers  $205 billion
  • -       Medicare Advantage plans $145 billion

The estimate suggests that care improvement will result in savings of $13 billion over 10 years.

This won’t solve all the problems in health care finance (and savings in Medicare could result in cost shift to other payers).  But this demonstrates that health care reform does begin to address the cost problem.