ARIANNA NEVAREZ
Staff Writer
Although there is disagreement regarding how much the government should involve itself in medical costs, Matthew Fiedler, a senior fellow with the Center on Health Policy at Brookings Institution, said there is a fairly strong view that Americans across the board want to pay less for healthcare.
At 10:45 a.m. Tuesday in the Amphitheater, Fiedler and James C. Capretta, senior fellow at the American Enterprise Institute, engaged in a conversation spanning topics such as the current healthcare system, the future of health insurance and strategies for Medicare reform.
Before joining Brookings, Fiedler served as chief economist for the Council of Economic Advisers, where he oversaw the Council’s work on healthcare policy, including implementation of the Affordable Care Act’s health insurance and healthcare payment reforms. Now, Fiedler’s research at Brookings examines a range of topics in healthcare economics and healthcare policy.
In Capretta’s role at AEI, he studies and comments on U.S. healthcare, entitlement and fiscal policy. He also serves as a senior adviser to the Bipartisan Policy Center and has previously held senior staff positions at the Office of Management and Budget and in Congress, primarily at the Senate Budget Committee.
Before providing his input on the direction toward which America should go, Capretta said that, in the big picture, parties tend to divide and accentuate their differences over public versus private elements of the U.S. healthcare system; he said the U.S. has a very messy, complex, large public-private hybrid, and he described “momentum and inertia” surrounding large-scale existing institutions.
“It’s a big system. It’s sensitive. We all rely on it, so abrupt change — one way or the other — tends to be resisted,” Capretta said. “… I think we tend to realize there are these constraints, and then, ‘What are the ideas that can fit within those constraints to make it work a little bit better?’”
Capretta said there is an issue of premium costs becoming too expensive for citizens. However, if the government controls costs without efficiency improvement, it could diminish healthcare quality or access. He also said there is a fiscal problem in America that directly affects Medicare and Medicaid.
Regarding prospective solutions, Capretta said a big market for biosimilars — similar versions of previously approved medications — can bring down the cost of patented products, allowing for much cheaper use of these therapies across the board. He also said hospital contracting practices have made treatment and care more expensive due to their centralization.
To bring costs down, Capretta said the government needs to break up contracts; this dissolution would allow people to work around routine high-volume services at major legacy systems that are often double the price one could get through a local clinic.
“They’re pushing more and more services into the bigger systems, which have advantages, but there’s a lot of opportunity to just do routine, lower-cost things in small operations that don’t cost much to run,” Capretta said. “So, as a country, we have to decide: Are we going to allow those [smaller operations] to spring up more and operationalize them as alternatives to running everybody through big legacy systems in certain metro areas? There’s competition in some parts of the country, but in many parts of the country, it’s still overly consolidable.”
The conversation shifted to discuss the current and future role of health insurance in the U.S. Fiedler believes it is a “legitimate role” of the public sector to aim to ensure that everyone has health insurance and that tax dollars should be used to subsidize health insurance for people.
Fiedler said Medicaid expansion is a move in the right direction, but 10 states have not adopted this, leaving adults below the poverty line with no source of plausibly affordable coverage available to them. He also said changes to eligibility have created new barriers to healthcare due to longer processes or confusing paperwork.
“In many cases, the barrier to enrollment is not always the financial cost associated with enrolling coverage, but the fact that the public processes that we use to get people from the point of saying ‘I’m interested in enrolling’ to actually being covered have a lot of places where things can go wrong, where you can mess up paperwork, where you can get fatigued and give up,” Fiedler said. “Thinking about how we streamline those processes is probably the next frontier.”
Capretta also said the need to advertise and provide clarity for individuals applying for healthcare programs is vital.
“Part of our issue is to rationalize the system, set up an enrollment and eligibility system that everybody understands how it works, control those final states to cover the remaining elements below the poverty line through Medicaid,” Capretta said. “Then, we are within closing distance of an objective I think we could all share: which is everybody in the country, if they take some responsibility for themselves and their families, can find a pathway to insurance. If they have to pay a little, that might be part of it, but it can calibrate to their income and they can get health insurance.”
To close, both talked about the future of Medicare reform.
Fiedler said there is a need for improvements to the design of traditional Medicare benefits; specifically, he mentioned a lack of an annual limit on out-of-pocket spending, which can leave people exposed to unlimited costs.
Capretta said the country needs to think of Medicare as a viable, sustainable program that doesn’t overburden the younger generation. He said the benefit package is fragmented into three parts, which doesn’t make sense in a modern health insurance system. He pitched a singular insurance package for hospitalization services, ambulatory care and prescription drugs that are bid on in one unit — a more simplified insurance arrangement.
“We need to look at Medicare going forward in a more integrated way than it’s been done in the past,” Capretta said. “It’s too fragmented today.”
