Getting Better Value in Health Care

Testimony Before the House Committee on the Budget

By Jeanne Lambrew | July 16, 2008

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CAPAF's Jeanne Lambrew testifies before the House Committee on the Budget. Read the full testimony.

Medicare, Medicaid, and other health program spending comprise about one-fourth of the federal budget. Their rapid projected growth accounts for the entire long-run federal fiscal deficit. It is an economic as well as a budget issue. Health spending accounts for 16 percent of our economy—more than housing or food. Its rapid growth poses challenges to businesses and individuals whose income is increasingly devoted to paying for health care. And, despite the enormous investment in health care, the quality of that care and its outcomes fall short by most standards. As the Federal Reserve Board Chair Ben Bernanke recently said, “Improving the performance of our health-care system is without a doubt one of the most important challenges that our nation faces.”

In this testimony, I would like to suggest how value in the health care system can be improved and why the opportunity to do so is on the horizon. “Value” generally describes the perceived quality of care or benefit per dollar spent. Improving value is not necessarily synonymous with improving efficiency. Some aspects of care provision, such as its patient centeredness, are worthwhile to patients but not strictly efficient. Nonetheless, the United States spends an enormous amount on duplicative, low-utility, and even harmful health care, so that a high-value health system would be more efficient overall—and offer significant non-economic advantages as well.

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