Post-Event Summary
The high costs of U.S. health care impose an ever-increasing burden on families and businesses and threaten the country's fiscal stability. At an AEI event Thursday afternoon, health policy experts joined Joseph Antos and Norman Ornstein of AEI to discuss proposals to bend the health cost curve.

Antos and Gail Wilensky, who oversaw Medicare and Medicaid in the George H.W. Bush administration, began with a discussion of their just-published paper "Bending the Cost Curve through Market-Based Incentives," which was co-authored by Mark Pauly. The paper proposes replacing the current defined-benefit approach to federal health subsidies with a defined contribution system for Medicare and employer-sponsored insurance, Wilensky explained. Antos clarified that unlike arbitrary federal limits on spending, a defined contribution approach fixes the underlying financial incentives that drive high health spending.

Paul Ginsburg of the Center for Studying Health System Change stressed the importance of using many approaches to cost containment at the same time. Yet, the polarization that dominates American politics, Ornstein explained, has made enacting such proposals a near political impossibility.


Event Description
Health insurance costs are climbing to unaffordable levels and threatening the country’s fiscal stability. Health experts Joseph Antos, Mark Pauly and Gail Wilensky propose a competitive market approach that would correct the current health care system’s underlying financial incentives, which are driving up costs.

The current Affordable Care Act relies heavily on regulatory approaches and mandates to finance health coverage, and recent proposals offer alternatives — but they have not met the market test. Antos, Pauly and Wilensky’s proposal would allow consumers and providers — rather than Washington, D.C., policymakers — to make decisions about what coverage to purchase, what services to produce and how to optimize value.