Washington, D.C. — The Joint Economic Committee held a hearing December 17 titled “Stop Paying More for Less: Realigning Healthcare Incentives to Improve Outcomes and Reduce Costs,” focusing on shifting healthcare policy away from financing debates and toward improving health outcomes while reducing overall costs.
Committee members and witnesses discussed how current healthcare debates often center on who pays for care rather than how to reduce aggregate costs through innovation, competition, and better incentive structures. Lawmakers argued that misaligned payment systems and regulatory barriers have limited the adoption of new technologies and treatments capable of improving population health.
Committee Chairman David Schweikert said Congress has allowed healthcare to become “financial engineering” rather than a system focused on making Americans healthier. Schweikert emphasized the need to embrace innovation, streamline regulatory pathways, and expand competition to lower costs and improve outcomes.
Witnesses included Brooks Tingle, CEO of John Hancock Financial; Dr. Ed Clarke, Vice President and Chief Medical Officer for the insurance division at Banner Health; Avik Roy, co-founder and chairman of Foundation for Research on Equal Opportunity; and Matthew Fiedler, senior fellow at the Brookings Institution Center on Health Policy.
Tingle testified that population-level behavior change is achievable through incentives, education, and technology, noting that relatively small rewards can drive measurable improvements in physical activity and preventive care. He highlighted the growing role of digital engagement and wearable technologies in improving health outcomes.
Clarke addressed inefficiencies in healthcare delivery caused by fragmented insurance models and short enrollment periods. He argued that longer-term enrollment and continuity of care would encourage providers to invest in prevention, chronic disease management, and care coordination, leading to fewer hospitalizations and lower costs over time.
Roy cautioned that while prevention improves public health, it does not always reduce lifetime healthcare spending. He advocated for structural reforms to Medicare, modernizing fraud-prone regulations, expanding the use of artificial intelligence and technology, and revisiting laws that limit competition and innovation in drug development and healthcare delivery.
Fiedler said moving away from fee-for-service models is essential but warned that full capitation could incentivize underutilization. He suggested hybrid payment models that balance fee-for-service with shared savings and risk-sharing to encourage better outcomes without reducing necessary care.
Lawmakers also discussed rising obesity-related costs, the potential impact of new GLP-1 medications, workforce shortages in primary care, prescription drug pricing, pharmacy benefit managers, and barriers to competition in hospital markets.
Members concluded that realigning incentives toward long-term health improvement, expanding access to innovation, and addressing regulatory and market distortions are critical steps to reducing healthcare costs while improving care for Americans.
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