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RCP: You recently said that “We're spending enough on health care. We're just not spending it in the right places.” Where are some of the wrong places that we are spending health care money?

Senator Wyden: One that comes to mind over the last few days is that the people in the individual insurance market are just getting creamed right now, especially with all the layoffs. When those people lose their coverage, they move into the individual market. So probably one of the first things for containing costs is making sure that individuals are in the position to have their funds pooled, so they can be part of a larger group which has more bargaining power in terms of what they get for their health care dollar.

The insurance market is broken. For example, it discriminates against people who are sick. Certainly fixing that so that insurers compete on the basis of price, benefit and quality rather than cherry picking is an opportunity to control costs.

A third area, in terms of health market places, is that most people don’t have a choice. They don’t have a choice of options even if they have employer coverage, and most of the time they don’t have a choice of their packages. So giving them a choice and the ability to benefit financially as a result of a careful selection of their insurance coverage would be a third area where we spend a lot but we don’t spend it in the right places.

For the amount of money that the country is going to spend this year on health care, you can go out and hire a doctor for every seven families in the US and pay the doctor almost $230,000 a year to cover them. Whenever I bring it up with doctors they say “Where do I go to get my seven families?”

RCP: You also recently said that we need to reduce federal spending on procedures that have “little or no value.” But value can be interpreted in different ways. How do you define value?

Senator Wyden: Peter Orszag, the White House budget office director, already is on record saying “About one third of what Americans spend on health care is on procedures of little or no value.” More than $700 billion is wasted on administrative paperwork and health care services that do not help people feel better or prevent future illness.

When you look at one third of $2.5 trillion, which is what we’ll spend this year, you get a sense of what’s at stake. You divide 305 million into $2.5 trillion and it comes out to about $230,000 for a physician.

Full Transcript of the RCP-Wyden Interview