Use of Medicare best practices could save billions, CBO director says

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Adopting the best medical practices in states with low Medicare costs could save the U.S. one-third of total healthcare spending costs each year, the head of the Congressional Budget Office said.

A Dartmouth University study found that states with low Medicare healthcare costs often have medical outcomes comparable with states that spend more on medical care. CBO Director Peter R. Orszag wants to expand these cost-saving practices across the country, he told the Senate Budget Committee last week. The U.S. spends $2 trillion on healthcare annually.

Policymakers have the responsibility of removing unnecessary spending without harming people's health, he said. Simply cutting Medicare payments to providers, for example, could hurt beneficiaries. Besides adopting best practices in low-cost states, Orszag suggested altering the financial incentives to providers in Medicare and Medicaid to save money.