"It's Complicated": Marrying the Evidence on Health Spending to Health Policy Reform

For several decades, researchers at Dartmouth College have compiled mounting evidence that notable differences in the levels of health spending and utilization across the United States are not correlated with better health outcomes or increased patient satisfaction. In recent years, some leading health policymakers have recommended using such cost and quality measures to reward health providers on the basis of their "relative efficiency."

However, critics such as pulmonary physician Peter B. Bach, M.D., of the Memorial Sloan-Kettering Cancer Center have cautioned that the current approaches used in hospital efficiency rankings are unsound and fail to accurately identify high-performing providers. Other researchers, such as Andrew Rettenmaier of the Private Enterprise Research Center at Texas A&M University, have observed that different indicators of geographic variation in health spending related to types of insurance coverage show less potential for cost savings. On the other hand, Amitabh Chandra of Harvard University has argued that there is tremendous variation in the efficiency of local health delivery systems, and that we could reduce the rate of growth in health spending by rewarding those systems that successfully keep costs in check while delivering quality health care.

This forum examined what we have learned from research on geographic variation in health spending and which health policy reforms are more likely to succeed in strengthening incentives to improve the efficiency of health providers' performance.

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About the Author

 

Thomas P.
Miller
  • Thomas Miller is a former senior health economist for the Joint Economic Committee (JEC). He studies health care policy and regulation. A former trial attorney, journalist, and sports broadcaster, Mr. Miller is the co-author of Why ObamaCare Is Wrong For America (HarperCollins 2011) and heads AEI's "Beyond Repeal & Replace" health reform project. He has testified before Congress on issues including the uninsured, health care costs, Medicare prescription drug benefits, health insurance tax credits, genetic information, Social Security, and federal reinsurance of catastrophic events. While at the JEC, he organized a number of hearings that focused on reforms in private health care markets, such as information transparency and consumer-driven health care.
  • Phone: 202-862-5886
    Email: tmiller@aei.org
  • Assistant Info

    Name: Neil McCray
    Phone: 202-862-5826
    Email: Neil.McCray@aei.org

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