At separate party retreats in Hershey, PA and Baltimore, MD this month, lawmakers will make decisions about health care that could impact millions of American families. 

Those decisions won’t be about whether Republicans will push to roll back Obamacare or whether Democrats will rise to the law’s defense.  It’s a foregone conclusion that the parties will be battling over the ACA well into 2017 and beyond.


Rather, the question is whether Republicans and Democrats will forego any serious, cooperative effort on health care affordability for two more years or whether this Congress will make more pragmatic efforts to curb health care costs a priority.

The stakes are high.

Every year, health care consumes a greater and greater share of middle class incomes and employer balance sheets.  A 2011 Health Affairs study found that rising health costs had wiped out a decade’s worth of income gains and more recently, a December 2014 Wall Street Journal analysis found that health spending was still squeezing out other consumer spending.  The Journal goes on to argue that this crowd–out “helps illuminate why the consumer-led U.S. economy has been so slow to rebound from the financial crisis.”

Once you compare the health sector to the rest of our economy, it’s little wonder that costs are going up.

In health care, consumers are simply not in the driver’s seat.  Even the best transparency tools on offer from health plans today are based on incomplete provider performance data, because the biggest payer for health care, the federal government, has only recently begun to free up its data. In addition, most consumers don’t have the value-based benefit designs that would encourage them to seek out the best care at the best price.

On the provider side, most physicians have to struggle to practice good medicine amidst today’s health care system.-  because physicians that keep patients healthy, avoid costly tests and procedures, and lower costs are penalized financially under the dominant fee-for-service reimbursement system.

The lack of consumer engagement and backwards provider incentives then combine to stymie cost-saving innovation. When a leading health system or plan develops an innovation that keeps patients out of the hospital or the nursing home, their peers often lack adequate market incentive to embrace these innovations. Patients and consumers who need lower cost or higher quality care then can wait years to see the benefit.

Fortunately, a few small but powerful policy changes could breathe some life into the health care marketplace, and finally offer a little relief to the consumers and businesses paying the bills.

First, consumers deserve access to reliable provider quality information and an estimate of their costs before receiving care (excepting emergencies). And when they use such information to seek out more effective, less-costly care, they should get a break on their out-of-pocket costs. Policymakers could go a long way toward making this happen by enabling private-sector transparency tools to draw on Medicare’s vast trove of cost and quality data and by allowing Medicare Advantage plans to pilot-test value-based insurance designs.

Second, the physicians and other health professionals who manage to keep patients healthy should not be penalized financially - as they are under today’s fee-for-service payment paradigm. Instead, physicians need positive incentives to embrace proven alternative payment models that focus on the health of patient populations. Ideally, these incentives would come as part of legislation permanently repealing the Medicare Sustainable Growth Rate's (SGR) automatic provider cuts. But if permanent repeal remains out of reach for now, lawmakers should pair these reforms with a temporary SGR patch.

Finally, when a new innovation saves money while improving care, it cannot stay on the shelf.  Take the example of episodic bundled payment. Dating back to the Clinton and Bush administrations, repeated demonstration projects have shown substantial cost savings and quality gains when hospitals are offered a single payment for certain common orthopedic and heart procedures- in both Medicare and the private sector. With the right patient protections in place, there’s no good reason that Medicare and other payers should wait to scale up successes like these.

Now these changes are not as thrilling as the left’s hopes for a single payer system or the right’s aspiration for premium support in Medicare. 

But if consumers had the information and the incentive to seek out the best providers for them, and  providers had a clear business case for embracing higher quality, lower-cost models of care, consumers and businesses would soon see the difference in their bills

Maybe, just maybe, that’s something that the politicians gathering in both Hershey and Baltimore could support.

Rother serves as President and CEO of the National Coalition on Health Care, a non-profit, nonpartisan organization that brings together more than 80 provider, consumer, payer and purchaser organizations in support of healthcare affordability.