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Counting the Costs of Health Care Reform

Can health care reform change the system and cut costs? Judy Woodruff gets one take from Gail Wilensky, a former administrator of the federal Medicare program.

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    And now we get a different view. And that comes from health economist Gail Wilensky. She's with the Project HOPE Foundation. She's a former director of Medicare and Medicaid in the first Bush administration. She has chaired Congress' Medicare Payment Advisory Commission.

    Gail Wilensky, thank you for being with us.

    GAIL WILENSKY, senior fellow, Project HOPE: Thank you for having me.


    So, Peter Orszag says, yes, these plans are going to cut health care spending in this country.


    Well, Peter knows these issues about as well as anyone from his days as the Congressional Budget Office director.

    What he said was, it won't add to the deficit. That's true, sort of. The amount of financing will make sure that you don't add to the deficit. One of the big problems is, the physician payment fix is outside of health care reform. It's about $210 billion over the next 10 years.

    You can say, well, we have got to fix the way Medicare pays physicians anyway. And that's true. But, of course, physicians are really key to changing how health care is delivered. So, while we go spend a trillion dollars, more or less, on health care reform, we better make sure that we have got another $200-plus billion to fix this payment problem.


    And you're not saying that's not part of what you see moving through Congress?


    That is not included in the Senate bill that he's talked about and how much it would reduce payments either in the first 10 years or the second 10 years. It's a very big issue.


    What else, Gail Wilensky, do you think ought to be in this legislation that isn't there to get the overall amount that is spent on health care down?


    Two things that I would put on my wish list.

    The first has to do with changing the tax treatment of health insurance provided by employers. There's a version of it in the Senate bill. It's the tax on Cadillac plans, an excise tax on the insurer if the plan costs too much money.

    I hope it is maintained in what comes out of the Senate and then out of the conference. It's nowhere in the House bill. So, this will drive some behavior change. It's a little clumsy as a way to do it. It's normally thought of as being directly on the employee. But it's good enough.

    But the second part has to do with all of the pilots that we heard discussed.


    Pilot programs.

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