In an interview with Judy Woodruff, Peter Orszag, director of the White House's Office of Management and Budget, outlines how health care reform will reduce medical costs.
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Next tonight: Is the push for health care reform cutting costs, as well as changing the system?
Judy Woodruff gets two sets of answers.
First, we turn to the president's point person on costs. He is Budget Director Peter Orszag.
Peter Orszag, thank you for joining us.
PETER ORSZAG, Director of Office of Management and Budget: Thanks for having me.
Even after this big success, getting a bill through the House of Representatives, you still have people out there, Republicans and Democrats, who are saying they seriously doubt whether any legislation that comes through Congress is going to put a dent in spending on health care.
What do you say to that?
Well, I think we have to be clear. We have said the legislation has to be deficit-neutral over the next decade. The Senate and House are both meeting that test. We're looking for it to be better than that in the second decade. Both the Senate and the House are meeting that test also.
And not only that, but we also want significant reforms to the delivery system, moving towards things like bundled payments, accountable care organizations, incentives to reduce readmission rates that are unnecessarily high at hospitals. Legislation includes a variety of those changes, too.
So, all in, there are an important set of reforms here that will help move towards a higher-quality/lower-cost system over time.
Well, let me ask you first about the deficit point, because "The Washington Post" has editorialized in the last few days that, essentially, what you're going to have in the next 10 years is much greater outflow from the federal government than you are going to have inflow, it's going to result in a gap that is ultimately going to need to be reconciled either by more taxes or by severe cuts on people who can least afford it.
Well, let's separate to things. One is the underlying budget problem. We do face a $9 trillion deficit over the next decade. That — and we can talk more about that.
The second question is, what is health reform doing to that underlying deficit? Again, take the Senate legislation. There is a reduction in that 10-year deficit of almost $100 billion coming from the Senate Finance legislation, and then, perhaps just as importantly, much larger effects that are growing over time in the second decade and thereafter.
So, there is an underlying fiscal problem. And we do need to address that. But the health legislation is not exacerbating that problem. It's making it better.