The opportunity to reduce health care costs without compromising quality makes this an exciting time to be a leader in the field of health care delivery, says Peter R. Orszag, PhD, Vice Chairman of Corporate and Investment Banking, Chairman of the Public Sector Group, and Chairman of the Financial Strategy and Solutions Group at Citigroup, Inc.
Dr. Orszag, a member of the Mount Sinai Health System Boards of Trustees, shared this encouraging message during a conference on Tuesday, August 26, to kick off Icahn School of Medicine at Mount Sinai’s new Master of Science in Health Care Delivery Leadership program. Classes for the first year of the program started during the final week of August.
The unique Master’s program, offered through the Department of Population Health Science and Policy, is designed to provide health care leaders with new knowledge and skills to use in delivering patient care in this era of unprecedented reform. Students in the program are required to possess at least seven years of managerial-level health care experience.
A deceleration in Medicare costs is already under way, Dr. Orszag said, with a 0.4 percent reduction in inflation-adjusted spending per enrollee between 2010 and 2013, compared with a 1.2 percent increase in inflation-adjusted private insurance spending per enrollee for the same period.
The savings were achieved through market innovations that were encouraged by policy shifts, he said. Dr. Orszag served as Director of the Office of Management and Budget at the White House from 2009 to 2010, the year the Affordable Care Act (ACA) went into effect.
Such cost-cutting initiatives included a shift in the payment system toward Accountable Care Organizations—groups of health care providers who voluntarily help coordinate high quality care to Medicare patients—and bundling, in which health care providers are paid on the basis of expected costs; digitization of records; and empowering consumers by boosting price transparency.
“It’s quite a phenomenal outcome, when you have an increase in expansion of coverage while a decrease in spending,” Dr. Orszag said.
The ACA is expected to help 20 million previously uninsured Americans get health insurance between 2013 and 2015, according to Kathleen Shure, MPA, Senior Vice President of Managed Care and Insurance Expansion for the Greater New York Hospital Association, who also spoke during the day-long conference titled “The Reform Landscape of Health Care Delivery,” held in the Leon and Norma Hess Center for Science and Medicine.
Dr. Orszag estimated the overall potential savings in the American health care industry to be equal to 5 percent of the national Gross Domestic Product. Health care costs can be cut and maintained even as the Baby Boomer generation fully enters retirement, he said.
“Can we constrain costs without straining quality? The resounding answer is yes,” he said. “It would have a truly massive effect if it were to continue.