Reduce the Deficit by Spending $829 Billion. Huh?

According to the new Congressional Budget Office analysis, the Senate Finance Committee’s health care legislation would cost $829 billion to provide insurance coverage to millions of Americans. But over 10 years, it would also reduce federal deficits by $81 billion.

Huh?

Besides providing insurance coverage, the other main goal of the legislation is to slow the steep rise in federal spending on health care, particularly on Medicare, which covers Americans over age 65 and the disabled. The analysis by the nonpartisan budget office shows that the savings generated by slowing Medicare growth, combined with revenue from new taxes, would more than cover the cost of providing health benefits to roughly 29 million people.

Medicare costs vary substantially, per enrollee, from one part of the country to another, and frequently the places where spending is highest, or growing the fastest, are not achieving better outcomes for patients, health care experts say.

“There is a lot of unnecessary care being provided in Medicare,” said Elliott S. Fisher, who helps produce the Dartmouth Atlas of Health Care, which has long tracked regional disparities in medical spending.

Many health economists say that reducing costs in parts of the country with high growth rates in per-patient Medicare expenditures — so they are closer to the national average — could save the nation hundreds of billions of dollars. And they predict that patients would not perceive any reduction in the quality of care they receive.

“Most of the differences across the country in spending are in how much time people spend in the hospital, and then when they are there, how many different doctors they see, how many difference specialists are involved in their care,” Dr. Fisher said.“Nobody thinks that residents of San Diego or San Francisco or other low-growing regions are being denied appropriate referrals to specialists,’’ he said. “They are just not getting unnecessary ones.”

Some experts, though, say the legislation still would not do enough to eliminate wasteful spending. And that debate is certain to intensify as health care legislation heads to the floor in both chambers of Congress.