When Will Congress Act?

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The Congressional Budget Office (CBO) tackled rising healthcare prices in a recent report contrasting commercial health insurance and Medicare fee-for-service (FFS) payments.???

Spoiler alert, the report attributed differences in prices to provider market power over health insurers.?Secondly, the report minimized the effect of cost shifting.?Both conclusions will be questioned by hospital and health system leaders.??

The three policy approaches outlined by the CBO with estimated effects in parenthesis, are to promote pricing transparency (very small effect), to encourage competition among providers (small effect), and to cap prices (moderate to large effect).??

For the short-term recommendations of the CBO report to contribute to the evolution of health policy, its recommendations could have reflected the framework of the last 80 years of U.S. health policy which has been to increase access to care, such as Medicare, Medicaid, and the ACA rather than focus on costs.???

The FFS payment model is outdated as access to care has increased, the health needs of the population have become more diverse, and Americans are aging with a greater prevalence of chronic disease.?Value models are being pursued as the next approach.?

Costs, affordability, and incentives go hand in hand.?The federal government, as the largest payer and regulator of healthcare, has a vested interest in convening consumers, providers, and payers to realign incentives so that all are pulling in the same direction.??

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