Making Health Care More Efficient

A registered nurse scans a barcode before dispensing medication to a patient in Romney, WV. In her testimony, Lambrew stressed the need for increased health information technology as a way to increase health care efficiency.

SOURCE: AP/Don Wright

July 18, 2008

Read Jeanne Lambrew's full testimony to the House Committee on the Budget (CAPAF)

“Health care contains the largest inefficiencies in our economy,” said Peter Orszag, Congressional Budget Office Director at Wednesday’s House Committee on the Budget hearing entitled, “Getting Better Value in Health Care.” Testimony, including that of Jeanne Lambrew, Senior Fellow at the Center for American Progress Action Fund, offered solutions to the high cost and low efficiency in the current health care system.

Those testifying agreed that, as of now, the $2 trillion spent yearly on health care feeds into an inefficient, unstable, and convoluted system. To address this problem, Orszag, Lambrew, and David Gratzer, a Senior Fellow at the Manhattan Institute for Policy Research, pushed for some similar initiatives, like a high-quality health information technology system and increased transparency of costs and outcomes.

Orszag pointed out that by looking at varying health care costs in different states, it becomes clear that higher spending is not linked to better outcomes. Not only did he encourage universal information technology, he also stressed the formation of a comparative effectiveness research entity and a shift in priorities.

“We are not going to get better care unless we create incentives for that,” he said, suggesting rewards for better care rather than more care.

Lambrew agreed that comparative effectiveness research was essential, but she also urged the creation of a Federal Reserve-like board and regional offshoots to set and to maintain higher standards in health care. She suggested dissemination as key to spreading the standards and information technology, and that incentives would be needed for the use of high-value care. Moreover, Lambrew stressed that these components for a strong infrastructure should be combined with coverage in a seamless system supported by sustainable financing to achieve the potential of a high-value system.

“No single simple plan can increase value,” Lambrew said. “Knowledge is necessary but not sufficient.”

Gratzer contributed his own personal experience when his wife hurt her back and needed a special medical procedure. Although he praised the actual medicine, he cited the unnecessarily long and complicated bill as a failure of the health care system. While Gratzer commended the emphasis on the doctor-patient relationship, he warned that “not everything is about dollars and cents.”

“The best way to spend money is to keep people out of the health care system,” he said. “We need to move decisions closer to families.”

The committee members were receptive to increased health information technology, and Rep. Allyson Schwartz (D-PA) spoke of it as a tool to “actually force a better integrated system.” Orszag warned that the system would have to change as well and an “isolated setting” would provide fewer benefits for health care.

Lambrew said that this information sharing could eliminate duplication and increase coordination by shaving off time and unnecessary expense. Those testifying thought health care technology updates could improve efficiency, but they cautioned that more efforts would be needed to lay the groundwork for such a system, such as tax reform.

“It’s a step in the right direction,” Gratzer said. “I don’t think anyone would argue that it’s a panacea.”

Read Jeanne Lambrew's full testimony to the House Committee on the Budget (CAPAF)