June 16, 2008
Today I am speaking at the Prepare For Launch Health Reform Summit of the Senate Finance Committee. My statement is available here. Key points from my statement are below:
- The single most important factor influencing the federal government's long-term fiscal balance is the rate of growth in health care costs, caused largely by rising health care costs per beneficiary.
- The significant geographic variation in per capita health care spending across the United States suggests substantial inefficiencies in health care today and an opportunity for reducing health costs without adversely affecting health outcomes.
- These inefficiencies are perpetuated, in part, by a lack of clarity as to what insurance costs and who ultimately pays those costs-- especially with regard to employer-provided health insurance.
- Providing more information on the "comparative effectiveness" of alternative medical treatments, and changing financial incentives that encourage providers to engage in expensive treatments and procedures may help shift professional norms to improve efficiency and restrain cost growth.
- Increased transparency with regard to specific medical services may not lead to reduced health care expenditures, however, because consumers generally don't make independent decisions about what services to purchase from whom, particularly in an emergency. In addition, many health care markets are relatively concentrated, and in those settings, increased price transparency may lead to higher, rather than lower, prices for specific services by facilitating collusion among providers.