Instead of more federal regulation and subsidies, what U.S. health care needs is adoption of market principles, starting with broad empowerment of the patient-consumer. The proposals advanced in this volume would replace many counterproductive and outdated federal policies with practical, market-based reforms that aim to provide all Americans with access to high-quality health care at affordable prices.

Whether it is the Centers for Medicare and Medicaid Services (CMS) determining which treatments and technologies are worth covering and how much they are willing to reimburse for them; the Agency for Healthcare Research and Quality (AHRQ) mandating quality and safety standards; or the new Affordable Care Act exchanges setting the standard for benefit packages throughout the health insurance market, it is clear that government agencies and their mandates play a powerful role in guiding the provision of health benefits and the overall construct of the market.

James Capretta & Joseph Antos argue that one of the most consequential provisions of the Affordable Care Act is also one of its most obscure. The “productivity adjustment factor,” inserted by the ACA into the Medicare program, is a massive spending cut included to make room in the federal budget for the ACA’s expensive new health insurance subsidies. If Congress follows past practice, the ACA’s higher spending will be with us long after savings from the productivity adjustment factor have been reduced or eliminated altogether.

The Urban Institute’s Robert D. Reischauer and Brookings Senior Fellow Alice M. Rivlin highlight three main health care issues the candidates should focus on that are likely to dominate the election debate. Republicans must form consensus around a replacement plan for the Affordable Care Act and Democrats must develop ways to improve the law. Both must focus on how to control rising health spending and how to preserve Medicare for the growing elderly population.

The brief’s key findings:

  • The 2010 Affordable Care Act (ACA) included roughly 165 provisions to improve Medicare’s finances.
  • The Medicare Trustees Report, which reflects the ACA provisions, shows dramatically lower cost projections for Medicare in the future.
  • The Medicare actuaries also produce alternative projections assuming that the legislated restraints on growth in payments to health providers are not feasible.
  • A review of both sets of projections over the past six years shows that the gap between them is narrowing due to declines in the alternative cost projections.
  • However, a significant gap still remains, which underscores the inherent uncertainty involved in long-range projections.

Douglas Holtz-Eakin is the president of the American Action Forum and a former director of the Congressional Budget Office. He also served on President George W. Bush’s Council of Economic Advisers. With the Affordable Care Act’s insurance marketplaces beginning their third open enrollment this week, RealClearHealth talked to Holtz-Eakin about what’s working, what’s not working, what can be done today to address problems with the law, and what should be on the agenda of a new administration in 2017.

Mercy will be the 58th rural hospital to close in the United States since 2010, according to one research program, and many more could soon join the list because of declining reimbursements, growing regulatory burdens and shrinking rural populations that result in an older, sicker pool of patients. The closings have accelerated over the last few years and have hit more midsize hospitals like Mercy, which was licensed for 75 beds, than smaller “critical access” hospitals, which are reimbursed at a higher rate by Medicare.

Reduce Medicare payments to certain hospitals for hospital-acquired conditions by 1%. (Effective fiscal year 2015)

An ObamaCare program could be penalizing certain hospitals for serving more poor patients, according to a study released Monday.

The study focuses on an ObamaCare program that docks a hospital’s Medicare payments if its readmission rate is above a certain level. The program is meant to provide a financial incentive for hospitals to improve the quality of care and cut down on costly readmissions, in which a patient must return to the hospital after a procedure.

WASHINGTON — House Republicans on Tuesday will unveil a proposed budget for 2016 that partly privatizes Medicare, turns Medicaid into block grants to the states, repeals the Affordable Care Act and reaches balance in 10 years, challenging Republicans in Congress to make good on their promises to deeply cut federal spending.

The House proposal leans heavily on the policy prescriptions that Representative Paul D. Ryan of Wisconsin outlined when he was budget chairman, according to senior House Republican aides and members of Congress who were not authorized to speak in advance of the official release.

With the Senate now also in Republican hands, this year’s proposal is more politically salient than in years past, especially for Republican senators facing re-election in Democratic or swing states like Pennsylvania, Wisconsin, Illinois and New Hampshire, and for potential Republican presidential candidates.