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Obamacare is not the only major legislation passed under President Obama to attempt to control health care costs. The 2009 stimulus bill also included some $30 billion in incentives for hospitals to adopt new information technology systems. The goal, according a memo drafted by health advisers to President Obama’s first campaign, was to use health care information more prudently in order to “produce savings in health spending.” Yet an investigation published by The New York Times in September found that the new health I.T. systems were actually helping hospitals bill Medicare to the tune of up to $1 billion a year more. The stimulus spent billions of taxpayer money on new technology that was supposed to cut costs—but it ended up making the government’s biggest health program more expensive.
The truth is that all we really know about health care cost control is that we don’t know very much at all. When the Congressional Budget Office released a report examining the results of 34 Medicare pilot programs intended to improve the cost and quality of health care, it found little success. "On average, the 34 programs had little or no effect on hospital admissions," the report said. "In nearly every program, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered." It also looked at four programs intended to reduce spending through payment incentives to provider organizations. One focused on heart bypass savings showed a 10 percent savings. But the other three "appear to have resulted in little or no savings for Medicare."
Summarizing Medicare’s history of attempted care and cost-control innovations, CBO Director Douglas Elmendorf gave little reason for hope. “The demonstration projects that Medicare has done in this and other areas are often disappointing,” he said in 2011 congressional testimony, according to The Fiscal Times. “It turns out to be pretty hard to take ideas that seem to work in certain contexts and proliferate that throughout the health care system. The results are discouraging.”
Indeed they are. Which is why we shouldn’t count a significant payoff from the latest round of technocratic tweaks either. Adjusting the program’s payment system is not enough. The way to reduce spending on Medicare is to cut spending on Medicare, by overhauling the system’s benefits and eligibility structure—and the time to start the process is now.