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Emphasis Should Fall on Value of Health Spending, Panelists Said

By Caitlin Webber, CQ Staff

January 28, 2008 -- Mounting health care costs and growing numbers of uninsured Americans are untenable realities, and policymakers should shift the focus from the bottom line to treatment value and quality of health outcomes, said panelists at a forum Monday on health spending.

Katherine Baicker, professor at the Harvard School of Public Health and former member of President Bush's Council of Economic Advisers, said, "Emphasis on cost is misplaced, the emphasis should be on value. . .we should be getting more for what we spend" on health care.

Baicker also suggested that a systemwide overhaul may be required to correct geographic inequity in health care quality. She spoke as part of a panel discussion at an event sponsored by the Alliance for Health Reform, where panelists discussed a recent Commonwealth Fund report on cost savings associated with covering the uninsured. That report, titled "Bending the Curve," found that U.S. health care spending can be substantially reduced when universal insurance is combined with a strategic federal health policy overhaul.

Peter Orszag, director of the Congressional Budget Office, said that uneven treatment quality is worrisome, but argued that attention to cost savings is needed because "the rate at which health care costs grow will be the primary determinate" of the country's "fiscal future."

"Something has to change" Orszag warned, "to avoiding exploding debt scenarios." In addition, he said advocates should incorporate more "behavioral economics—why people act in health care the way they do" in policy recommendations.

The Commonwealth Fund report, released in December, praised policy strategies that aim to inform health decision-making, promote prevention, incentivize efficiency and change "price signals" in the health care market.

Experts estimated in the report that $1.5 trillion could be saved over ten years with comprehensive cost-cutting programs and national insurance. Cathy Schoen, the report's lead author, said the savings could offset the federal costs of universal insurance and urged swift action.

Schoen said "there is no single bullet" or piecemeal fixes that would result in significant health care savings. Rather, "there are potential dynamic approaches as we start to combine policy options. . .it will take a multifaceted approach," she said.

"There are tremendous human and economic stakes if we don't come together and start acting now," Schoen said.

Schoen also called for consensus and leadership. "We are all in this together. We can't think about our separate budgets or cost shifting games — we need to have a collaborative and focused effort."

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