Testimony on Alternative Payment Models and the Slowdown in Federal Health Care Spending

In this testimony, CBO’s Director of Health Analysis, Chapin White, focuses on accountable care organizations (ACOs), the Center for Medicare & Medicaid Innovation (CMMI), and the unexpected slowdown in federal health care spending. The implementation of an ACO known as the Medicare Shared Savings Program (MSSP) and the creation of CMMI have occurred during a period of unexpectedly slow growth in federal health care spending. CBO’s review of the effects of the MSSP and its estimate of the budgetary effects of CMMI’s first decade of operation suggest that they were not factors in the slowdown. Factors that did have an effect include decreases in the growth of Medicare’s payment rates, reduced spending on patients with cardiovascular diseases (because of better management of those conditions and greater use of medications to control risk factors), and a shift in the relative importance of technology in fueling the growth of health care spending.