The president of the National Taxpayers Union (NTU) said rising health care costs are being driven by incentives embedded throughout the U.S. health care system, affecting hospitals, insurers and pharmaceutical companies alike.
“There are bad incentives, frankly, baked into the entire system,” NTU President Pete Sepp told the Health Policy Podcast.
Sepp said patients often encounter dramatically different prices for the same medical service depending on where they receive treatment.
“It’s just one of the problems we see in the system: high costs, unpredictable costs, and opaque costs,” Sepp said. “It is very difficult for a patient or even a doctor to figure out why a certain charge is being levied for a given service.”
According to Sepp, hospitals are incentivized to consolidate physician practices, while government reimbursement programs and other policies can contribute to distorted pricing throughout the system.
“Hospitals have bad incentives. Pharmaceutical companies have bad incentives. Insurers have bad incentives as well,” he said.
Sepp also pointed to administrative complexity as a major cost driver.
“All the time I hear from doctors, nurse practitioners, and others who say they work in practices of, say, 10 employees, where three of them, even four of them, do almost nothing all day but file insurance and other reimbursement paperwork,” he said.
“That is an incredible amount of bureaucratic overhead that has little to do with oversight.”
Rather than focusing on a single reform, Sepp said policymakers should pursue changes across multiple parts of the health care system.
“We are not necessarily focusing on the wrong problems, but we focus in too closely on one problem rather than numerous problems,” he said.
“If you wanna do things incrementally, you can solve a bunch of them at once, make gradual, modest changes everywhere.”
NTU is a nonprofit, nonpartisan organization that advocates for lower taxes, limited government spending and increased accountability from public officials.
