Orszag: Ryan plan raises healthcare costs on the backs of seniors

Former White House Budget Director Peter Orszag ripped into the GOP’s Medicare reform proposal on Friday, saying it would not only shift costs to seniors but would raise national healthcare spending overall.

“This plan, which is often being held out as reducing overall costs — at least as evaluated by the Congressional Budget Office — does not reduce overall costs on the backs of seniors: It raises overall costs on the backs of seniors,” Orszag said during an appearance at the Brookings Institution.

Orszag, who is now vice-chairman of global banking at Citigroup, is the latest figure to chime in on the issue after Congress’s budgetary scorekeeper estimated that a proposal to turn Medicare into a voucher-like program would almost double seniors’ out-of-pocket costs, to more than $12,500 a year. Orszag has been a lead advocate of keeping healthcare costs under control that at times has put him at odds with the Obama White House, for example, on the issue of taxing high-cost insurance plans.

“We cannot afford open-ended, continued cost increases driven largely by technology,” he repeated Friday. “But on the other hand, we don’t want to lose the advances in health outcomes that are associated with a variety of technological improvements.”

The economist said new investments in health information technology that give medical professionals instant access to best-practice protocols should help.

But he also proposed several changes to current law, including malpractice reforms that would create safe harbors for doctors who practice within the guidelines of their medical societies, and changing the payment system to reward quality by adjusting reimbursements for new medicines and technologies based on their proven efficacy.

“We’re not going to have new technology just for new technology’s sake,” he said. “We’re going to have new technology to improve outcomes and improve value.”