ECONOMIC REPORT OF THE PRESIDENT

improvements will strengthen ACOs’ ability to achieve savings and their
incentives to do so. Third, program rules for many APMs are structured so
that the performance payments earned for any given level of gross savings
will shrink over time, generating larger net savings to Medicare even if gross
savings remain constant. Fourth, as discussed previously, a larger share of
Medicare dollars are expected to flow through APMs in the coming years.
Recent Trends in Health Care Quality
The reforms implemented under this Administration were designed
to improve the quality of care, not just reduce health care costs. Reducing
costs in ways that worsen the quality of care will often reduce the total
value generated by the health care sector. By contrast, reducing costs while
maintaining or improving the quality of care, which the evidence presented
at the beginning of this section of this chapter suggested is often possible,
has the potential to greatly increase the total value generated by the health
care sector.
In practice, studying trends in health care quality is inherently more
challenging than studying trends in health care costs. The essential information
about health care costs can be captured in a few key pieces of data—the
types of service used, the prices paid for those services, and the resulting total
spending—and these same basic measures are applicable across all health
care settings. By contrast, health care quality has many important dimensions,
including a range of different aspects of patients’ experiences while
receiving care and myriad health outcomes. Furthermore, the most relevant
dimensions vary widely from one setting to another. As a result, indicators
of health care quality are unavoidably less comprehensive than indicators
of health care costs. In addition, whereas health care costs are measured
in dollars and so can be readily aggregated and compared across domains,
different dimensions of health care quality are measured in widely varying
units, which makes aggregation effectively impossible.
For both of these reasons, all-encompassing indicators of health care
quality like those that exist for health care costs do not exist. However, quality
measures that capture particular important dimensions of care do exist,
and a few of these are discussed below. These measures indicate that recent
years’ slow growth in health care costs has been accompanied by important
improvements in health care quality, implying that ongoing changes in
health care delivery system are not just reducing health care spending, but
also increasing the total value that the health care system creates. Notably,
these improvements in the quality of care appear to be attributable, at least
in part, to reforms introduced by the ACA.
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