President Barack Obama’s health budget outlines eight principles of reform to expand coverage and bring down costs, and comes with a price ticket of 76.8 billion dollars for fiscal year 2010.
The budget also proposes a reserve fund of more than 630 billion dollars over 10 years to finance the overhaul, half funded from new revenue and half from savings anticipated to accrue from increasing efficiency and accountability, aligning incentives to quality and sharing responsibility, said the 2010 Health and Human Services Department budget outline released from the White House earlier this week.
According to a report in the Los Angeles Times (LAT), the president wants to raise nearly 318 billion dollars over the next ten years by capping itemized income tax deductions for families earning more than 250,000 dollars a year so that they would only get 28 per cent of deductions like charitable donations back, instead of the higher amounts allowed under current regulations.
According to the LAT, such a proposal means that a couple in the 35 per cent tax bracket would only get back 2,800 dollars compared to the 3,500 dollars they can currrently claim back for a 10,000 dollar charity donation.
The president also sees more than 316 billion in extra revenue coming from changes to the way central government pays for Medicare and Medicaid, where more than 175 billion would come from cutting payments to insurers that contract with the government through the Medicare Advantage program.
Also, the budget proposal stresses that the reserve fund will not be enough to “put the Nation on a path to health insurance coverage for all Americans”. Additional funds will be needed to cover the cost of the plan; it will require “an effort beyond this down payment”, says the White House.
The 8 principles of Obama’s health plan are to:
- Speed up use of electronic health records and information technology.
- Support more research into comparing treatments so doctors and patients have better information on what works best.
- Double research on cancer, including a 6 billion injection at the National Institutues of Health.
- Improve services for American Indians and Alaskan Natives.
- Recruit more health professionals, including 330 million dollars for more doctors, nurses and dentists in regions of shortage.
- Expand child care such as Early Head Start and Head Start and create Nurse Home Visitation to support first time mothers.
- Strengthen quality and efficiency of Medicare, the government insurance program for seniors.
- Increase food safety and prevention of foodborne illness by investing over 1 billion dollars for more Food and Drug Administration inspections, labs, and surveillance.
In this plan one sees much influence from recently published reasearch, such as the High Performance Health System that the Commonwealth Fund released last week and America’s Uninsured Crisis: Consequences for Health and Health Care that the Institute of Medicine published earlier this week.
In their report, the Commonwealth Fund proposes a set of recommendations for insurance, payment and system reforms that could “guarantee affordable coverage for all by 2012, improve health outcomes, and slow health spending growth by 3 trillion dollars by 2020”, as long they are enacted now and put in place in 2010.
Central to their proposal is the idea of a national insurance exchange that offers consumers a choice of affordable and accessible private plans and a new public plan that also cost less to administer.
With this as the foundation the focus then shifts to other areas such as reforming how care is paid for. For this they propose moving from a fee-for-service system to more “bundled” methods of paying that “encourage coordinated care and hold providers accountable for improving health outcomes and prudent use of resources”.
The Commonwealth Fund also recommends increasing the use of information technology and the creatiion of a center for “comparative effectiveness to enhance knowledge and appropriate use of evidence-based care”.
Click here for the White House health budget plan for 2010 (opens as PDF).
Sources: whitehouse.gov, Commonwealth Fund, Institute of Medicine, LA Times.
Written by: Catharine Paddock, PhD