Health Care Administrator Confirms Cantwell-Authored Provisions Will Bring About Significant Cost Savings

CMS Administrator calls Cantwell contributions to historic health care bill key to future Medicare savings

WASHINGTON, DC – Today, Dr. Donald Berwick, a key Obama administration official responsible for implementing health care reform, committee told a Senate committee that provisions authored by U.S. Senator Maria Cantwell (D-WA) will deliver significant cost savings. Dr. Berwick, who heads the Centers for Medicare and Medicaid Services (CMS), underscored the importance of the Cantwell provisions during a Senate Finance Committee hearing on strengthening Medicaid and Medicare. Cantwell said that talk of repeal of the Affordable Care Act ignores the critical cost savings contained in the legislation
“This is about legislation that is estimated to save hundreds of billions of dollars in the reform of our Medicare system,” said Senator Cantwell. “Some people are saying, ‘Let’s do vouchers instead, or privatize it or do something else.’ The truth is this legislation has very powerful tools for reducing the cost of Medicare moving forward, and if we get rid of them we are going to be in a world of hurt. So I just want to get your commitment on some of those provisions.”
As CMS administrator, Dr. Berwick is responsible for implementing key provisions of the Affordable Care Act, signed into law in March, including Cantwell-authored measures to establish a new value-based system of Medicare reimbursement, lower prescription drug costs, and enable seniors to receive long-term care in their homes and communities.
“These are all important levers for doing what I said in my opening statement: making care better and more affordable at the same time,” Dr. Berwick told the committee. 
“How big of a component do you think [the value-index] is for the success of Medicare and reducing Medicare costs going forward?” Senator Cantwell asked.
“A very large piece,” said Dr. Berwick. “Measuring what we want and attaching incentives and rewards for going there is logical and powerful.”
Concerning home care for seniors, Dr. Berwick said, “People don’t want to be in institutions.  They don’t want to be in hospitals. So a way to get them into communities with the proper support is better for them, its better their families and loved ones.  And it will, in general, lower costs substantially. It’s a very important example of progressive work.”
Cantwell’s long-term care provision makes it possible for seniors to stay in their homes, enhancing their lives and saving an estimated 70 percent of the cost of nursing home care. Estimates show that enabling even 5 percent of those who would otherwise go into nursing homes to access home- and community-based care would save more than $10 billion over 5 years. Dr. Berwick also discussed the importance of Cantwell’s Medicare value index. CMS is developing the index to pay doctors based on quality and efficiency of care rather than quantity.
Cantwell also authored the Basic Health plan that will allow states to negotiate for lower insurance rates, and the Pharmacy Benefit Manager (PBM) transparency provision she authored, which is estimated to save seniors as much as 10 percent of the cost of brand name drugs.
“I think it’s very important that we understand the tools are here,” said Senator Cantwell. “They are already law. We now have to get about implementing them. And the more people talk about delaying them, the more we’re going to delay cost controls. The public will greatly benefit by this.”
More information on Cantwell’s provisions in the new health care law discussed today is below:
Long Term Care: The law includes $3 billion that will help seniors in need of long-term care who prefer to remain in their homes.  Home and community-based care is 70 percent less expensive than nursing home care and allows seniors to remain active members of their communities. In Washington, home care costs about $1,200 per month versus the approximately $6,000-7,000 per month for nursing home care.  Washington saved an estimated $243 million over approximately 10 years by shifting from nursing home to home-based services. 
Medicare Reform: Establishes a “value-based index” to reward doctors for providing high quality, efficient, and coordinated care.  The measure replaces the current physician fee system that rewards practitioners for ordering often redundant or unnecessary tests and procedures, contributing to an estimated $120 billion per year in unnecessary spending.  The value-based index will particularly benefit Washington state patients and providers by ending Medicare’s practice of rewarding quantity instead of quality and reducing waste in Medicare. 
Basic Plan: Gives all 50 states the option to negotiate directly with health insurers to provide high quality health care coverage at a lower cost. This model has worked for decades for working class Washingtonians.
Pharmacy Benefit Managers (PBMs):  Serving as the middlemen between health insurance plans, pharmaceutical manufacturers, and pharmacies, PBMs manage most of the prescriptions filled in the United States but are the only unregulated area of the health insurance industry.   Cantwell’s provision provides much-needed transparency in the PBM industry to ensure that consumers, and not the PBM’s bottom line, benefit from the savings resulting from drug price negotiations.