The Bipartisan Policy Center (BPC) on Monday launched a new initiative aimed at addressing the fundamental drivers of rising U.S. healthcare costs, moving away from strategies that merely shift financial burdens between payers.
The “Health Care Affordability Initiative” arrives as Congress and the administration face mounting fiscal pressure and consumer frustration over healthcare spending. High costs are currently eroding household budgets, forcing families to delay care, and contributing significantly to rising federal deficits.
The initiative will focus on several key areas where spending is particularly acute: prescription drug pricing, hospital and physician costs, and the design of the Medicare Advantage insurance market.
Retail prescription drug spending now accounts for 9% of federal healthcare spending, nearly double its share in the 1990s. The BPC plans to examine policy levers to increase competition and align pricing incentives, including reforms for pharmacy benefit managers and patent exclusivity.
Federal spending on hospital and physician services has also seen significant growth, reaching a combined $2.7 trillion in 2024. The BPC stated it will investigate opportunities to increase transparency and reduce price variation across care settings, seeking to align payment incentives for “value over volume.”
The initiative also targets the Medicare Advantage (MA) program, where federal spending more than doubled between 2015 and 2021. Researchers will study potential reforms to the MA bidding and payment structures, as well as the Star Ratings system.
Additionally, the BPC highlighted that administrative complexity is estimated to account for 15-30% of total U.S. healthcare spending. This inefficiency is driven by payer fragmentation, billing complexity, and excessive regulatory reporting burdens.
Over the coming year, the BPC intends to engage with stakeholders to develop pragmatic, bipartisan recommendations. The organization emphasized that its goal is not a “single policy fix,” but rather a coherent framework to improve the long-term sustainability of the nation’s healthcare system.
The initiative will look for areas where consensus already exists while developing new solutions for emerging challenges in the healthcare landscape.