Mr. QUIGLEY. Mr. Speaker, I rise today to call for continued reforms to our health care system. The Affordable Care Act was a huge step in the right direction, but we can do more because the path we are on is unsustainable.
The U.S. spends approximately 18 percent of its GDP on health--close to twice as much as other developed Nations--and yet we don't have better health care outcomes. Health care costs are rising faster than inflation and wages, meaning they are eating a larger portion of Americans' paychecks and the government's budget.
If we continue on our current path, the Medicare trust fund will be insolvent by 2024. And Medicare and Medicaid will grow from 24 percent of the Federal budget to almost 30 percent, crowding out other needed investments.
We have to reduce health care costs in both the private sector and the public sector in order to ensure America remains competitive in the global market. But there is a right way to reform our health care system and there is a wrong way. With all due respect, Mr. Ryan's plan is the wrong way.
Mr. Ryan's plan for Medicare and Medicaid misses the point. His solution simply shifts the costs from the government to patients, rather than reducing health care costs. Under the Ryan budget, seniors would pay as much as $1,200 more each year by 2030, and $6,000 more by 2050. For over half of Medicare beneficiaries with incomes less than $21,000, a $1,200 increase is a huge piece of their budget.
He also proposes block-granting Medicaid, which would cut Medicaid funding by approximately $700 billion over the next decade and result in 14 to 19 million people being kicked off Medicaid, many of them children and seniors.
These steps might make the budget look better, but they do nothing to actually reduce the cost of health care, and they hurt patients. We can reduce health care costs without harming beneficiaries.
Here are five steps we should take to reduce health care costs the right way:
First, and most importantly, we have to change the way we pay providers. Right now, we pay for each individual test and surgery. We pay for quantity rather than quality of care. Providers across the country are adopting payment for quality models, but they need Medicare, the largest payer, to get on board and pay for quality as well.
The Centers for Medicare and Medicaid, or CMS, just completed a pilot where it bundled payments for 37 procedures and reduced spending by 10 percent. This needs to be replicated across the board, and CMS needs to move the majority of its patients to physicians off fee-for-service over the next 10 years.
Second, CMS needs to restructure and expand competitive bidding. It just completed a competitive bidding pilot for durable medical equipment and was able to reduce prices by double digits. While I have some concerns about the structure of that competitive bidding program, I believe it does need to be restructured to prevent suicide bidding and expanded to include more medical tests and services such as lab tests, CT scanners, and other items.
Third, States need to be empowered and incentivized to reduce their health care costs. States like Arkansas have taken bold steps to reduce their health care costs by requiring their two largest insurers and their Medicaid program to join a shared savings plan. They are expected to save the State's Medicaid program $4.4 million in FY '13 and $9.3 million in FY '14. We should be encouraging other States to follow the path of Arkansas and reduce Medicaid costs and improve care.
Fourth, we have to modernize Medicare cost sharing and ask a bit more from those who can afford it. We should combine Medicare part A and B deductibles and cap them. We should increase means testing for premiums for part B. And we should limit first-dollar coverage for high earners. We have to protect our sickest seniors from high costs while asking a bit more from those with greater means.
Finally, we have to improve price and quality transparency. We should prohibit gag clauses, which currently prevent hospitals from sharing health care pricing information. Without pricing transparency, hospitals can't negotiate for the best price for medical devices and physicians can't make cost-conscious choices for their patients.
We do have to reduce health care costs, but there is a right way to do it and there is a wrong way. Mr. Ryan's plan is the wrong path. It harms seniors and fails to reduce underlying health care costs. By pursuing the five proposals I just outlined, we can reduce costs and improve quality, strengthening both our budget and our citizens.