Congressional Budget Office Director Peter Orszag told lawmakers that the healthcare sector is far and away the most inefficient economic driver in the U.S., with more than $700 million each year being spent on medical procedures that seemingly have no effect on patient outcomes at all.
There is no other inefficiency that I can identify that even comes close to it, he added. Orszag, who has earned the respect of Democrats and Republicans alike for his data-backed assessments on the current and future healthcare economy, said that a multipronged approach that includes comparative-effectiveness research and a redirection of financial incentives should serve as the bedrock for broader reforms.
Part of the discussion on Capitol Hill focused on the idea of a Federal Reserve-like board for healthcare, which would operate independently of Congress to help shape policy and payment rules. Orszag told lawmakers that the CBO is studying the idea and would release a report on the topic later this year.
Jeanne Lambrew, a senior fellow at the Center for American Progress, said that another key underpinning for reform is for Congress to accelerate the use of health information technology, such as electronic health records. She said that reductions in Medicare reimbursement could be used as a way to prod providers into using the widely available technology, but added that loans and grants would likely also be needed. -- by Matthew DoBias