This Centers for Medicare & Medicaid Services (CMS) report highlights the national health care reform law’s Medicare savings.  It estimates that health reform will save Medicare $8 billion through 2011 and $575 billion over 10 years.  In addition, CMS projects that spending cuts under reform will reduce annual Medicare spending growth from 6.8 percent to 5.3 percent and reduce average annual premiums by nearly $200 by 2018.  The report assumes that Congress will not avoid the scheduled 21 percent Medicare physician reimbursement rate reduction.

From the report:

The Affordable Care Act includes several key provisions that will promote broader integration and coordination of care that enable physicians and nurses to spend more time with their patients and reduce duplicative services. These models will improve health care delivery by promoting team-based care, developing new models of care delivery, and supporting improved provider performance with continuous feedback on meeting specific performance objectives.

The Affordable Care Act promotes team-based health care through Accountable Care Organizations (ACOs) under the Medicare shared savings program. ACOs create delivery systems that encourage and support teams of physicians, hospitals, and other health care providers to collaboratively manage and coordinate care for Medicare beneficiaries. If these providers meet certain quality and efficiency benchmarks, they may receive a share of any savings from reducing duplicative services, improving productivity, minimizing paperwork, or otherwise improving cost efficiency. While the CMS Office of the Actuary (OAct) estimates that this provision will be budget neutral, the CBO has projected that it will reduce Medicare spending by nearly $5 billion over the next ten years. CMS is working to make the program operational by January 1, 2012. Proposed rules will be issued later this year and CMS and its partner organizations will continue to hold public forums to foster ACO development and coordinate with on-going private sector efforts.

Full report: Affordable Care Act Update: Implementing Medicare Cost Savings (PDF | 156KB) 

Centers for Medicare & Medicaid Services. (2010). Affordable care act update: implementing Medicare cost savings.