The nation's medical costs will continue to rise at an unsustainable rate, threatening America's fiscal stability, unless its broken healthcare model is revamped through both federal regulation and free-market competition, a prominent national economist told a Buffalo audience today.
Alice Rivlin, a former U.S. Cabinet official and Federal Reserve vice chair, said experts and industry leaders across the spectrum generally agree that the country has to move away from the long-standing fee-for-service model.
That system, particularly in Medicare and Medicaid, encourages more spending and volume of treatment by doctors and hospitals, but not necessarily more efficient, coordinated and better care for the patients.
"When you bring the experts in and the people doing it on the ground, it seems the most effective way to stem the growth of Medicare is to get away from fee-for-service," said Rivlin, an expert on the federal budget who is now a senior fellow in economics at the Brookings Institution. "There's not a lot of disagreement that that is the direction to go."
The challenge comes in determining the best way to get there, she said, as politicians have been unable to move beyond the ideological split that has defined healthcare reform into those who support leveraging the heft of Medicare to force change and those who support relying on competition instead. In fact, that's a false perception.
"It isn't really a choice. It's a question of both," said Rivlin, who spoke to an audience of about 60 healthcare and business leaders at a forum sponsored by Independent Health Association.
The forum, held at the Darwin Martin House, was the first in what the Williamsville-based health insurer hopes will be quarterly programs as part of its "Conversations for a Healthy Tomorrow" series.
