United States Senate

We begin by examining the growth in spending in the United States health care system. Next, we define five priority areas of delivery system reform, and identify cost saving opportunities in these areas. Third, we highlight models ofdelivery system reform that are currently in practice across the country, with particular attention to their effect on health care cost and quality. The fourth section details the ACA'sdelivery system reform provisions and the status of their implementation. The report concludes with an analysis of the Administration's progress and offers recommendations for steps moving forward. The salient fact underlying this report is that the drivers of unnecessary and excess cost in the U. S. health care system result from systemic causes. Public insurance programs, private insurance coverage, military and veterans' care, evencorporate self-insurance, all are seeing dramatic and continuing cost increases. The problem is system-wide, and the solution must be too. If these issues are not addressed, policymakers will face increasingly unpleasant and difficult threats to the insurance coverage, both private and public, of millions of Americans. Gail Wilensky, who oversaw Medicare and Medicaid under President George H. W. Bush, said, "If we don't redesign what we are doing, we can't just cut unit reimbursement and think we are somehow going to get a better system." The ACA offers solutions that do not cut benefits or increase premiums, but instead reform systems of health care delivery to improve health outcomes and cost efficiency. The keychallenge facing the United States is how quickly, thoroughly, and efficiently the reform of our health care delivery system can be implemented.

The world economy remains in a volatile state. Fragility, low confidence, and the risks of overleveraged societies continue to threaten further economic decline. The United States continues to sink deeper into debt; Europe, forced into austerity, is facing major financial turbulence. Japan is recovering from a natural disaster that has left it nearly paralyzed; the Middle East is in chaos, and the structural system of Asia is of concern. According to the Bank of International Settlements, total industrialized country public sector debt is now expected to exceed 100 percent of gross domestic product (GDP), something that has never happened during a time of peace. The globalization of world economies means that the U. S. remains intertwined with the affairs of others. Should economies remain fragile, the failure of one country could lead to a depressive shock to the others, leading to economic contractions potentially worse than 2008. It is necessary for countries, especially the United States, to structurally strengthen their economies, achieving a resilience that will be able to withstand significant volatility and challenges in the future.