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Peter R. Orszag Speaks at Catholic Health Assembly

Tells Leader of the Catholic Health Ministry the U.S. will Remain Mired in Legislative Gridlock for a Long Time

ATLANTA (June 6, 2011) — Peter R. Orszag, one of the chief strategists behind the Obama administration's health reform initiative, told a group of Catholic health care leaders meeting here that the U.S. will remain mired in legislative gridlock for a long time, and leaders must learn to use inertia and gridlock to their advantage.

Orszag, a vice chairman of Citigroup, was the first head of the Office of Management and Budget in the Obama administration. During a keynote speech Monday at the Catholic Health Assembly, the economist said that the Patient Protection and Affordable Care Act has a built-in mechanism to circumvent political gridlock: The Independent Payment and Advisory Board.

That board, which has yet to be established, must put forth proposals that will keep Medicare spending growth within a certain target range as it moves the system toward "value-based" payments aimed at reining in costs while raising care quality. Beginning in 2015, a 15-member IPAB board must make recommendations to reduce Medicare spending when that spending is expected to exceed a target level.

Orszag said that polarized politics in Washington may make it difficult to get nominees confirmed to the IPAB board. "If we succeed in getting people confirmed, I think it does hold promise to overcome the gridlock."

Orszag said that he does not expect the board to impose "hard rationing" of medical services or "blunt provider payer reductions" to meet its cost saving goals. Rather, he expects it to experiment with different payment incentives. But it's not entirely clear how the board will keep Medicare cost growth under control. Orszag said an uncertain path, and one that will likely be marked by false starts, is far preferable to staying on the present course.

"There are going to be mistakes," Orszag said. "I think it is better to try," to bend the Medicare cost curve, "even acknowledging imperfection."

The Catholic Health Assembly is the largest annual gathering of leaders of the Catholic health ministry. Organized under the theme, "The Opportunity Now; How Reform Will Advance the Healing Mission," the sessions examine the opportunities, the challenges and the realities of implementing the new health reform law. The program is presented by the Catholic Health Association of the United States (CHA).

The Catholic Health Association of the United States (CHA), founded in 1915, supports the Catholic health ministry’s commitment to improve the health status of communities and create quality and compassionate health care that works for everyone. The Catholic health ministry is the nation's largest group of not-for-profit health systems and facilities that, along with their sponsoring organizations, employ more than 750,000 women and men who deliver services combining advanced technology with the Catholic caring tradition.

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