the cost pressure rather than prevent it. The committee does not support terminating the entitlement status of Medicare and Medicaid. Rather, the savings from such reductions are intended to be a “bridge” to savings from fundamental and systemic reform.

FOUR TRAJECTORIES

Given the uncertainty about the long-term budgetary savings that could accrue from the many possible combinations of health reforms described later in this chapter, the committee has sketched four health care spending trajectories that vary in their assumptions about the stringency of direct spending reductions in the near term, while leaving open the possibility that slower-acting redirection of incentives and improvements in information (among other things) may eventually achieve savings that will reduce or eliminate the need for direct reductions. Figure 5-1 shows the baseline and the committee’s four trajectories (see Appendix F for details). The lower the spending trajectory, the tighter the necessary limits (at least in the near term). We also discuss a range of illustrative reform approaches and options below, but uncertainties as to the effects of some of the options make it

FIGURE 5-1 Federal health spending under four sustainable budget trajectories and in the baseline.

FIGURE 5-1 Federal health spending under four sustainable budget trajectories and in the baseline.



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