- Nalee Nov 19, 2018 at 09:13: PM
Congressional Budget Office: Options for Reducing the Deficit
Compare to other countries, the United State spends the most money on health care and the cost continues to rise. The United State is spending over $10,000 per person a year, which amount in overall spending of $3 trillion a year (CMS.gov, 2018). Thus, $1 trillion is from the federal government net mandatory outlays of their health care programs. Due to high spending in health care, the Congressional Budget Office has provided three ways on budgetary in health care. According to the Congressional Budget Office by following these plans, it can cut federal spending.
Impose Caps on Federal Spending for Medicaid
One of the options for reducing the deficit in health care is to impose caps on federal spending for Medicaid. By basing per-capita caps on existing spending in each state, this can prevent disparities between high and low spending states from getting worse and assure a fair and efficient distribution of spending. For example, the Congressional Budget Office (2016) states, “the caps could generate budgetary savings in greater or lesser amounts depending on their level and setting spending limits would make federal costs for Medicaid more predictable.” However, by implementing that health option can greatly affect safety-net hospitals, which delivers significant care to Medicaid, uninsured, and other vulnerable patients.
The Effects on Safety-Net Hospital
Safety-net hospital plays a vital role in the nation’s health care systems. Dobson, et al., (2017) states, “safety-net hospitals include public hospitals that are often providers of last resort in their communities, academic medical centers that combine a teaching function with a mission to serve vulnerable populations, and in some communities, private hospitals that either because of their mission or the absence of public hospitals in the community, serve as the safety-net provider.” Therefore, because safety-net hospitals provide care to all patients, whether insured or uninsured, the impose caps on federal funding for Medicaid will cause safety-net hospitals financially. The reduction and caps on Medicaid funding will cause safety-net hospitals financial status to deteriorate due to increasing hospitals’ uncompensated care costs. This can also lead to a possibility of cutting back on health care staffs and the available services for Medicaid patients.
Proposed changes that can help mitigate negative effects
Due to the deteriorate financial impacts for safety-net hospital from the impose cap on federal spending for Medicaid, safety-net hospitals will need to re-evaluate their financial and budget status. In order for safety-net hospitals to be able to continue to provide services to low-income and Medicaid patients, they will need to implement a global budget approach that will allow them to spend below projected levels. The global budget model, also known as the all-payer global budget is an approach that involves an annual expectation for revenue for all inpatient and hospital outpatient care in advance, which creates an incentive to reorganize care for prevention and to invest in community services (Layton, el at. 2017). For example, the state of Maryland is a successful all-payer global budget system. Thus, their “global budget model aims to incentivize more deliberate spending decisions, to utilize health services appropriately, and to improve quality of care across the system (Catalyst for Payment Reform, 2018).” By implementing the all-payers global budget, safety-net hospitals can have a better insight to reorganize care delivery and invest in services to address preventable health conditions among their population patient. This can benefit with the budget planning to make sure hospitals do not spend over their cap.
References
Catalyst for Payment Reform. 2018. What is Maryland’s All-Payer, Global Budget Hospital System and How Can We Learn From it? Retrieved from https://www.catalyze.org/maryland-global-budget-payment-reform/
Congressional Budget Office. 2016. Options for Reducing the Deficit: 2017 to 2026. Retrieved from https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf
CMS.gov. 2018. Historical. Retrieved from https://www.cms.gov/Research-Statis...endData/NationalHealthAccountsHistorical.html
Dobson, A., DaVanzo, J., Haught, R. 2017 The Financial Impact of the American Health Care Act’s Medicaid Provisions on Safety-Net Hospitals. Retrieved from https://www.commonwealthfund.org/pu...american-health-care-acts-medicaid-provisions
Layton, T., Montz, E., McGuire, T. 2017. An Emerging Approach to Payment Reform: All-Payer Global Budgets for Large Safety-Net Hospital Systems. Retrieved from https://www.commonwealthfund.org/pu...payment-reform-all-payer-global-budgets-large
Compare to other countries, the United State spends the most money on health care and the cost continues to rise. The United State is spending over $10,000 per person a year, which amount in overall spending of $3 trillion a year (CMS.gov, 2018). Thus, $1 trillion is from the federal government net mandatory outlays of their health care programs. Due to high spending in health care, the Congressional Budget Office has provided three ways on budgetary in health care. According to the Congressional Budget Office by following these plans, it can cut federal spending.
Impose Caps on Federal Spending for Medicaid
One of the options for reducing the deficit in health care is to impose caps on federal spending for Medicaid. By basing per-capita caps on existing spending in each state, this can prevent disparities between high and low spending states from getting worse and assure a fair and efficient distribution of spending. For example, the Congressional Budget Office (2016) states, “the caps could generate budgetary savings in greater or lesser amounts depending on their level and setting spending limits would make federal costs for Medicaid more predictable.” However, by implementing that health option can greatly affect safety-net hospitals, which delivers significant care to Medicaid, uninsured, and other vulnerable patients.
The Effects on Safety-Net Hospital
Safety-net hospital plays a vital role in the nation’s health care systems. Dobson, et al., (2017) states, “safety-net hospitals include public hospitals that are often providers of last resort in their communities, academic medical centers that combine a teaching function with a mission to serve vulnerable populations, and in some communities, private hospitals that either because of their mission or the absence of public hospitals in the community, serve as the safety-net provider.” Therefore, because safety-net hospitals provide care to all patients, whether insured or uninsured, the impose caps on federal funding for Medicaid will cause safety-net hospitals financially. The reduction and caps on Medicaid funding will cause safety-net hospitals financial status to deteriorate due to increasing hospitals’ uncompensated care costs. This can also lead to a possibility of cutting back on health care staffs and the available services for Medicaid patients.
Proposed changes that can help mitigate negative effects
Due to the deteriorate financial impacts for safety-net hospital from the impose cap on federal spending for Medicaid, safety-net hospitals will need to re-evaluate their financial and budget status. In order for safety-net hospitals to be able to continue to provide services to low-income and Medicaid patients, they will need to implement a global budget approach that will allow them to spend below projected levels. The global budget model, also known as the all-payer global budget is an approach that involves an annual expectation for revenue for all inpatient and hospital outpatient care in advance, which creates an incentive to reorganize care for prevention and to invest in community services (Layton, el at. 2017). For example, the state of Maryland is a successful all-payer global budget system. Thus, their “global budget model aims to incentivize more deliberate spending decisions, to utilize health services appropriately, and to improve quality of care across the system (Catalyst for Payment Reform, 2018).” By implementing the all-payers global budget, safety-net hospitals can have a better insight to reorganize care delivery and invest in services to address preventable health conditions among their population patient. This can benefit with the budget planning to make sure hospitals do not spend over their cap.
References
Catalyst for Payment Reform. 2018. What is Maryland’s All-Payer, Global Budget Hospital System and How Can We Learn From it? Retrieved from https://www.catalyze.org/maryland-global-budget-payment-reform/
Congressional Budget Office. 2016. Options for Reducing the Deficit: 2017 to 2026. Retrieved from https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52142-budgetoptions2.pdf
CMS.gov. 2018. Historical. Retrieved from https://www.cms.gov/Research-Statis...endData/NationalHealthAccountsHistorical.html
Dobson, A., DaVanzo, J., Haught, R. 2017 The Financial Impact of the American Health Care Act’s Medicaid Provisions on Safety-Net Hospitals. Retrieved from https://www.commonwealthfund.org/pu...american-health-care-acts-medicaid-provisions
Layton, T., Montz, E., McGuire, T. 2017. An Emerging Approach to Payment Reform: All-Payer Global Budgets for Large Safety-Net Hospital Systems. Retrieved from https://www.commonwealthfund.org/pu...payment-reform-all-payer-global-budgets-large