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Retirement

The federal government devotes a substantial share of its budget to benefits for the nation's retirees through Social Security, Medicare, Medicaid, and other programs. Additionally, the exclusion of pension contributions and earnings from taxable income constitutes one of the largest preferences in the federal income tax code. CBO regularly analyzes a wide range of proposals to change those programs or those elements of the tax code.

Sub-Topics:

  • Medicare
  • Pensions
  • Private Health Insurance
  • Social Security

Offsetting Effects of Prescription Drug Use on Medicare’s Spending for Medical Services

Nov 2012 - CBO estimates that greater use of prescription drugs by Medicare beneficiaries reduces Medicare’s spending on medical services.

2012 Long-Term Projections for Social Security

Oct 2012 - Over the next 20 years, the population will age and spending on Social Security will increase from about 5 percent of GDP to about 6 percent.

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Social Security Disability Insurance—January 2012 Baseline

data or technical information

January 31, 2012

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Social Security Old-Age and Survivors Insurance—January 2012 Baseline

data or technical information

January 31, 2012

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Pension Benefit Guaranty Corporation—January 2012 Baseline

data or technical information

January 31, 2012

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Social Security Trust Funds—January 2012 Baseline

data or technical information

January 31, 2012

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  • blog post

related publications


  • Lessons from Medicare's Demonstration Projects on Disease Management and Care Coordination

    January 18, 2012

  • Lessons from Medicare's Demonstration Projects on Value-Based Payment

    January 18, 2012
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Lessons from Medicare's Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment

report

January 18, 2012

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Highlights

In the past two decades, Medicare has conducted two broad categories of demonstrations aimed at enhancing the quality of health care and improving the efficiency of health care delivery in its fee-for-service program:

  • Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly.
  • Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered.

CBO reviewed the outcomes of 10 major demonstrations that have been evaluated by independent researchers. The evaluations show that most programs have not reduced Medicare spending. Programs in which care managers had substantial direct interaction with physicians and significant in-person interaction with patients were more likely to reduce Medicare spending than other programs, but on average even those programs did not achieve enough savings to offset their fees. Results from demonstrations of value-based payment systems were mixed. In one of the four demonstrations examined, Medicare made bundled payments that covered all hospital and physician services for heart bypass surgeries; Medicare’s spending for those services was reduced by about 10 percent under the demonstration. Other demonstrations of value-based payment appear to have produced little or no savings for Medicare.

Demonstrations aimed at reducing spending and increasing quality of care face significant challenges in overcoming the incentives inherent in Medicare’s fee-for-service payment system, which rewards providers for delivering more care but does not pay them for coordinating with other providers, and in the nation’s decentralized health care delivery system, which does not facilitate communication or coordination among providers. The results of those Medicare demonstrations suggest that substantial changes to payment and delivery systems will probably be necessary for programs involving disease management and care coordination or value-based payment to significantly reduce spending and either maintain or improve the quality of care provided to patients.



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Lessons from Medicare's Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment

blog post

January 18, 2012


  • blog post

related publications


  • Lessons from Medicare's Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment

    January 18, 2012

  • Lessons from Medicare's Demonstration Projects on Value-Based Payment

    January 18, 2012
  • Sign Up For CBO Emails
  • Sign up for All CBO RSS Feeds

Lessons from Medicare's Demonstration Projects on Disease Management and Care Coordination

working paper

January 18, 2012

read complete document  (pdf, 481 kb)

Abstract

This paper summarizes the results of Medicare demonstrations of disease management and care coordination programs. Such programs seek to improve the health care of people who have chronic conditions or whose health care is expected to be particularly costly, and they seek to reduce the costs of providing health care to those people. In six major demonstrations over the past decade, Medicare’s administrators have paid 34 programs to provide disease management or care coordination services to beneficiaries in Medicare’s fee-for-service sector. All of the programs in those demonstrations sought to reduce hospital admissions by maintaining or improving beneficiaries’ health, and that reduction was a key mechanism through which they expected to reduce Medicare expenditures. On average, the 34 programs had no effect on hospital admissions or regular Medicare expenditures (that is, expenditures before accounting for the programs’ fees). There was considerable variation in the estimated effects among programs, however. Programs in which care managers had substantial direct interaction with physicians and significant in-person interaction with patients were more likely to reduce hospital admissions than programs without those features. After accounting for the fees that Medicare paid to the programs, however, Medicare spending was either unchanged or increased in nearly all of the programs.


  • blog post

related publications


  • Lessons from Medicare's Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment

    January 18, 2012

  • Lessons from Medicare's Demonstration Projects on Disease Management and Care Coordination

    January 18, 2012
  • Sign Up For CBO Emails
  • Sign up for All CBO RSS Feeds

Lessons from Medicare's Demonstration Projects on Value-Based Payment

working paper

January 18, 2012

read complete document  (pdf, 455 kb)

Abstract

This paper summarizes the results of Medicare demonstrations of value-based payment systems, which give providers financial incentives to improve the quality and efficiency of care. Only one of the four demonstrations for which results are available has yielded significant savings for the Medicare program. In that demonstration, Medicare made bundled payments to hospitals and physicians to cover all services connected with heart bypass surgeries, and Medicare spending for those services declined by about 10 percent. The other demonstrations appear to have resulted in little or no savings for Medicare. One, the Physician Group Practice Demonstration, allowed large multispecialty physician groups to share in estimated savings if they reduced total Medicare expenditures for their patients. Another offered hospitals bonuses if they met certain criteria regarding the quality of care. The last (for which results are available only on a preliminary basis for the first year) allowed home health agencies to share in estimated savings if they reduced total Medicare expenditures for their patients and met certain targets for quality of care.


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