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Overview

Revising Medicare policies will directly influence health care spending on the elderly, who account for one-third of all U.S. health care spending and thus indirectly influence spending decisions for the 200 million Americans covered by private health insurance. Specifically, the Centers for Medicare & Medicaid Services (CMS) should take two significant steps towards reforming Medicare by:

• Recommendation 1: Requiring coverage only for cost-effective technologies, and
• Recommendation 2: Basing reimbursement of providers on pay for performance.

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