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02/18/2021

Dr. Bob Berenson Discusses Healthcare's Pricing Problem and Potential Remedies (February 18th)

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(As explained on the podcast home page, this is the second of eight interviews concerning federal healthcare policy reform.  This discussion with Dr. Berenson was conducted in mid-November.  As you will hear this podcast like all others is introduced by ProMedica's CEO, Randy Oostra.  This series was produced in an effort to interest or persuade federal healthcare officials to pursue substantive healthcare policy reform.)    

US healthcare prices, moreover in commercial markets, have for decades been significantly higher than in comparative countries.   In addition, the US healthcare market suffers wide price heterogeneity or significant price discrepancy.   Total US healthcare spending, per capita spending and spending growth are in multiples of most other rich countries.  While there will remain debate regarding how to best calculate prices or interpret price signals, there is consensus the healthcare industry suffers a significant pricing problem.   As Uwe Rinehardt and his colleagues concluded in a widely referenced 2003 article, “it’s the prices stupid.”  Unlike the US, developed countries throughout the world, control for price via a mix of policies that correct for market failure and constrain price growth.   

During this interview Dr. Berenson begins by explaining what largely explains, or which industry sectors largely explain, healthcare's pricing problem.   He discusses the extent to which stimulating market competition and fielding new payment models can work, explains most comparative countries stimulate competition via regulating prices and explains the opportunity to address providers charging outlier prices, or prices significantly higher than Medicare rates, by placing upper payment limits, setting all payer rates as done in Maryland and as in other states, for example Montana, limiting payments or providing differential payment updates.  He notes the success of rate regulation and competition via the Medicare Advantage program, whether Medicare Advantage should participate in ACA marketplaces and comments on the extent to which more affordable prices paid can be offset for providers by increased utilization.               

Dr. Robert Berenson joined Urban as an Institute fellow in 2003.  In 2012, Dr. Berenson completed a three-year term on the Medicare Payment Advisory Commission, the last two years as vice chair.  From 1998 to 2000, he was in charge of Medicare Berenson-robert_1 payment policy and private health plan contracting at CMS.  Previously, he served as an assistant director of the White House Domestic Policy Staff under President Carter.   Dr. Berenson is a board-certified internist who practiced for 20 years, the last 12 years in a Washington, DC, group practice.  While practicing he helped organize and manage a successful preferred provider organization serving the Washington, DC metropolitan area.  He is coauthor of The Managed Care Blues & How to Cure Them with Walter Zelman, and Medicare Payment Policy and the Shaping of U.S. Health Care, with Rick Mayes.  He publishes frequently in numerous publications, including the New England Journal of Medicine, Health Affairs, New York Times, and New Republic.   Dr. Berenson is a graduate of the Mount Sinai School of Medicine, a fellow of the American College of Physicians and on the faculty at the George Washington University School of Public Health.

For a transcript of this interview go to: https://commissiononhealthcare.org/

The Brookings/Schaeffer two-part healthcare price regulation series noted during this interview is at: https://www.brookings.edu/events/are-u-s-health-care-prices-too-high-too-low-or-some-mix-of-the-two/ and https://www.brookings.edu/events/health-care-price-regulation-and-public-options-assessing-approaches-to-increasing-the-public-role/.  

To read this interview's transcript or to post a comment or question, please go to: https://commissiononhealthcare.org/

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