Question: What do you call Obamacare’s $716 billion cut in Medicare spending during the next decade?

Answer: A good start – and not because seniors don’t deserve their Medicare benefits.

The Affordable Care Act (ACA) achieves those spending cuts over 10 years by decreasing payments to Medicare providers. The Romney-Ryan ticket, meanwhile, is committed to fundamental changes in Medicare and restoration of the $716 billion by repealing the ACA. Democrats, and some health care experts, charge that their plans would boost seniors’ out-of-pocket costs for prescription drugs and premiums, and end Medicare as we know it.

But the smoke from the presidential campaign battle obscures an important fact. Obama’s Medicare reimbursement cuts are no more than a down payment on a vital project: Getting our nation’s health care spending in line with the rest of the industrialized world.

In 2010, the U.S. spent 18 percent of its gross domestic product on health care, about seven percentage points higher than the average for all other industrialized countries, according to the Organization for Economic Cooperation and Development (OECD). Our rate of spending growth for health care is double that of other OECD nations. We’re spending $2.5 trillion a year on health care, and researchers who study the health care system estimate that about one-third of every dollar we spend doesn’t do anything to improve health.

In today’s Reuters Money column, I explain some of the top targets for greater efficiency and better care – along with estimated annual savings.

Tags | health insurance, healthcare, Medicare, Reuters