Budget Chief: For Health Care, More Is Not Better

Peter Orszag, the director of the White House Office of Management and Budget, projects that a year from now, the country will be on a path toward a much more efficient health care system.

"When you go to see your doctor, that doctor will have much more information about what specifically is likely to work for your diagnosis, and will have better incentives to be providing high-quality care to you, rather than just more care. And, in addition to that, the number of uninsured people in the United States will be dramatically lower than it is today," Orszag tells NPR's Steve Inskeep.

Insuring tens of millions of people who are currently left out of the system, Orszag says, is part of a "package" of changes by the Obama administration aimed at constraining costs and increasing efficiency.

To get the cost of health care down dramatically — by half, Orszag says — requires changes in what is considered "quality" care.

"Estimates suggest that as much as $700 billion a year in health care costs do not improve health outcomes. It occurs because we pay for more care rather than better care," Orszag says. "We need to be moving towards a system in which doctors and hospitals have incentives to provide the care that makes you better, rather than the care that just results in more tests and more days in [the] hospital."

The new system will not necessarily encourage doctors to do less for patients, Orszag says, but rather, improve quality across an uneven field.

Depending on location, "the care that's delivered to you is going to be dramatically different for reasons that can't be explained by medical science," he says. "And the difficulty is that the places that do more tests and [require] more time in the hospital and have you visit lots more specialists don't seem to generate better outcomes. More is not always better in health care, and we're wasting a lot of money because we have not transformed the system to take into account that realization."

Given a hypothetical case of a parent who wants a doctor to perform every test on a child, regardless of cost, Orszag responds, "In most cases, we tend to appropriately defer to the doctor. That's why I think it's so important to make sure that doctor has the best possible information and also does not have distorted incentives to be tilting, perhaps, towards more intense approaches that don't actually yield better outcomes."

Orszag says that typically, when people are given a choice between a more intense health care approach and a less intense one, they tend to choose the latter. "Yet, the irony is, our current health care system has all of the incentives towards that more intense alternative," he says.

Looking back at President Clinton's failed attempt to reform health care in the 1990s, Orszag says that a lot has changed since then, including legislative strategy.

"We're not marching up to the Hill with a huge binder and saying, 'Here's the plan,' " he says. "Instead, we're saying, 'Here are some ideas, and we want to work with you.' "

Also, he says, health care costs have continued to rise since the 1990s and are now a larger share of the economy. And Congress appears to want to tackle health care this year, he says.

Asked about the political risks in health care reform, Orszag says, "Well, we have to, again, compare it to the alternative. We are on a path that is fundamentally unsustainable. Even if things are not perfect this year, if we get 50 percent of the changes or 75 percent of the changes, that will be dramatically different than not doing anything at all. But let's hope that we get everything."

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