WASHINGTON, D.C. –?On December 17, 2025, the U.S. Congress Joint Economic Committee held a hearing titled?Stop Paying More for Less: Realigning Healthcare Incentives to Improve Outcomes and Reduce Costs. Members engaged with witnesses on how contemporary debates surrounding healthcare have been primarily focused on the financing of healthcare rather than improving healthcare to reduce costs and deliver better health outcomes. The dialogue has focused on who should bear the costs of healthcare rather than how aggregate costs can be reduced. This hearing focused on how realigning incentives, and focusing on making new, innovative technologies and treatments in healthcare available could reduce costs while improving health outcomes.   
 
“The unfortunate truth is, many in Congress are reluctant to acknowledge that we have made healthcare about financial engineering, not about improving health outcomes,” said Chairman David Schweikert. “We live in a world of medical and technological miracles. Advances that would have been science-fiction just a generation ago are now reality. Yet, we have allowed the cost of healthcare to outpace those breakthroughs, and millions of Americans are paying the price. Due to our regulations, we have also stymied the use of new, innovative diagnostics and treatments. We have a moral obligation to make healthcare better for all, and that requires embracing innovation, streamlining regulatory pathways, and unleashing competition.” 
 
Witnesses included Brooks Tingle, CEO, John Hancock Financial; Dr. Ed Clarke, Vice President, Chief Medical Officer of the Insurance Division, Banner Health; Avik Roy, Co-Founder and Chairman, The Foundation for Research on Equal Opportunity; and Matthew Fiedler, Senior Fellow, Brookings Institution Center on Health Policy.  
 
The hearing included the following discussions: 

Chairman Schweikert (R-AZ01): Healthcare Should Be About Improving the Health of the American People, Anything Less is a Failure of Governance 

Watch Chairman Schweikert’s remarks here. 

Chairman Schweikert started by laying out his goal for the discussion to take seriously what the ministers are in healthcare, and not just on the revolving financing mechanisms. He noted that we turned healthcare into financial engineering. Who pays, who gets subsidized, who gets a derivative, who gets a cut on it? What's the retained asset value we have not maniacally fixated on, what do our brothers and sisters pay? What succeeds in making them healthier? Are there tactics, technologies, synthetic biologics, GLP-1s, other things that we can make available to create a revolution of populations being healthier, able to provide, participate in society, and at the same time lowering costs.  

Chairman Schweikert directed his first question to Mr. Tingle, noting he had 10 years of data from his company working to help participants stay healthy. He asked Mr. Tingle what had been his biggest failure and what had been his biggest success.  

Mr. Tingle: the biggest very pleasant surprise to some, not to me, is that behavior change is achievable. There are lots of people that are very cynical about behavior change, and we all know it is hard.  You know, I am not as good at changing certain things about my choices as I should be, right?  

Like change is hard, but you can affect population level behavior change through incentives, rewards, education. We have seen it time and time again. Our program would be far less than we sought out for it to be if all we did was just attract healthy people. We want to meet Americans where they are. You need to lose some weight. You need to lower your A1C, whatever it may be.  

Meet you where you are, and give you the tools, the technology, the support to improve.  And we have seen  time and time again we see people before they join the program and after they join the program, physical activity, adherence to screenings, that can change.  

Chairman Schweikert continued along that same trajectory by asking what had to happen for behavior change to happen.  

Mr. Tingle: By far the biggest surprise is what people value, and honestly just how small of an incentive many of us will respond to favorably. I saw a study by a consulting firm recently that said what the average size and incentive that an American will respond to is $1.       

I don't know if that is true or not, but we have seen in our program, again by far the most popular element of the program is one where people play this game and win, $5 at Amazon, $10 at Starbucks, where they are saving thousands of dollars on their premiums and enjoying all kinds of other rewards. 

The digital engagement, the technology harnessing the power of all this information, the power of the wearable technology and other technology, is when we launched this program, there was no Apple watch. There was no Oura ring. There were not any of these things, and now they are so common. And part of our goal is to make them available to more Americans. We subsidize the cost of those things to reach more people. 

Chairman Schweikert asked about making the delivery system of healthcare more efficient. He outlined the fact that a large population of Arizona is in some form of managed care or capitated managed care model, either public or private. He asked how to model a hyper-efficient delivery system and how to develop the system with health incentives.  

Dr. Clarke: Yes, that is a tough one. Let me build on the scenario you painted of a waiting room of patients there who might have multiple different insurance plans. If I am a delivery system and let us just take Banner Health. I am one of the primary care providers or a specialty provider who's in charge of that waiting room.  

That is my clinic. It is challenging right now when each patient potentially has different insurance plans with different reimbursement rates, different valuebased quality measures that are well intended to do the right thing but also have very short terms. The threeyear term, which is one of the things that we are very keen on in a Medicare pilot. On the questions about prevention and screening and making sure that you have enough time to get to know a member and continuity with them, it is towards the middle or end of year two that you are going to start to see some of these savings.  

Chairman Schweikert also brought up the misalignment, fraud and bad design highlighted in the MedPAC report. He also asked about the change in behavior of providers if they have participants enrolled for longer than one-year intervals. What the change in investment would be to make that person healthier if they are enrolled for say three years instead of one.  

Dr. Clarke: It would dramatically increase the chances of making that investment, because it does take multiple years before you see the return. And it is challenging if members, whether they are Medicare Advantage or otherwise, switch plans every year.  

Not only may your providers not be in that network anymore and may not be able to render care on them too, but it takes a while to develop a relationship, make sure they get those screening tests done, build a relationship with a nurse care manager. Perhaps there are social determinants of health which need to be addressed as well.  

We are absolutely more likely to invest in those things with the longer runway. It is because clinically, sometimes that is how long these things take. Let’s take Medicare Advantage patient, if you control their blood pressure, control their diabetes, we can have a significant impact on lowering the avoidable admissions for those conditions, which contribute to a significant amount of medical costs.  

But it takes frequency and continuity of visits with your primary care team and the coordinating specialists to make that occur. And this could even be up to a visit every three to four weeks with some of the patients who are in the highest risk bands, who might have multiple chronic conditions, and also may just have trouble navigating the health care system.  

We are investing in the data to inform our care teams. You have to have a team with you, and it costs money to set those things up. The last thing I will say about a longer term is it also means we have continuity of the data at minimum over three years.  

Mr. Roy: The one last thing I will say on this topic is it is really important to appreciate that prevention does not necessarily always lead to lower health costs in the long run, because we all have to die of something.  

So maybe that individual does not have diabetes, but they might get cancer later or Alzheimer's disease or break their hip. Mortality is the one certainty. Even if you want to have a cheap health care system, the best way to do that is for everyone to die of tuberculosis at the age of 30, and I promise you, you will have a low cost health care system, but obviously that is not what we are looking for here.  

So, there is a degree to which I want to make sure that we all understand that prevention is good for public health reasons, but sometimes that may also lead to more expenditures and that is okay.  

Chairman Schweikert then asked Mr. Roy how to make the system work.  

Mr. Roy:  My favorite idea for liberating health care and creating the incentives that, Mr. Chairman, you have been talking about for so long is to effectively say that for the top decile of people in the Medicare program, in terms of lifetime earnings, that we say no, you know what, we are not going to ask middle class taxpayers to subsidize your health care cost. Go get your own insurance or get your own health care.  

Because these are older individuals, they consume a lot of health care. But then you have this ability to rethink how we cover and care for those individuals from the ground up using 21st century technology, wearables, artificial intelligence, new modalities of care, you'd be completely freed from the way employersponsored insurances work, and the way Medicare has worked, and the things doctors get paid for or not get paid for. You could completely reimagine healthcare from the ground up and that could lead to a lot of the positive incentives in terms of healthy behavior that you are looking for. 

Chairman Schweikert brought up redefining the definition of prevention to be a revolution in the management of chronic conditions. He said he sees the U.S. healthcare system financing misery instead of doing things that are curative. He brought up that science is on the cusp of having revolutionary cures and changes in cares for hemophilia and diabetes. He then went on to ask Mr. Fiedler his thoughts on a managed care model with the capitation where the incentive is making better health choices. Also, about the graduation, risk-sharing model.  

Dr. Fiedler: I am generally of the view that certainly moving away from pure feeforservice is a good idea. I think the hard question is do you want to go all the way to capitation, or does that end up giving the provider excessively strong incentives to ratchet back utilization?  

I think there is a balance, and I think my view the goal is a sort of partial capitation model, where you have some amount of feeforservice and some amount of capitation.  

On your second question, I think it is absolutely the case. The pure feeforservice is obviously the wrong answer. If you think about an ACO type model where there is a shared savings rate, is that right shared savings rate 50 percent, 75 percent, 100 percent. I think reasonable people can disagree, and I am honestly just uncertain about what the right answer is there.  

Chairman Schweikert moved to the topic of technology. Specifically, wearable technology that provides and tracks a person’s health data such as an Oura ring, an Apple watch, Dexcom, and other technologies. He mentioned the zero-population growth the nation is facing and how that could lead to a lack of healthcare talent. He asked Dr. Clarke, how technology is changing the future of healthcare.  

Dr. Clarke: Great question. Yes, it does work and I think the model's going to depend on it, especially going out longer. To your point, there are not as many doctors who are going into primary care, and we do have an aging population. Therefore, we do need these systems to help scale rendering primary care.  

Figuring out the role of AI, I know there is legislation that prevents us using AI for diagnosis, except maybe in a few cases. And there is certainly risk. We all need to go into that carefully.  

But we absolutely are going to need to depend on those types of technological systems being in place. When I talk about prevention to your point of how we change that, I am generally thinking, did we prevent somebody from an unplanned visit to the ER or the hospital.  

Where technology can send a message seamlessly to a patient specialist or a coordinating PCP team to say there is an arrhythmia or is something going on, that is valuable. We are trying to create that now through phone calls or iPads or other things, where we are asking the patient to reach out to us. It needs to be the other way around, where we reach out and ping them, or the device automatically sends a message to the team and a nurse care manager anytime, day or night, can pick that up and route that to somebody who can then triage that to the next step. We are going to be dependent upon this.  

Chairman Schweikert then followed up with tackling the exorbitant cost of obesity. Over the next decade, obesity will cost the nation an estimated $9.1 trillion dollars in healthcare spending, making it the most expensive health issue in America. He mentioned that GLP-1s will soon be available in an oral tablet form for roughly $145. per month. As obesity can lead to many chronic diseases including diabetes and heart disease, the Chairman asked if by making GLP-1s more widely available to all income levels, and reducing obesity rates across the country, could that dramatically change the price of healthcare.  

Dr. Clarke: I think, yes. The literature shows that if you isolate diabetes and show that you are controlling the blood pressure of those patients, you are improving their A1C control, and you are putting them on statins, that alone has a significant impact. 

It delays blindness, progression of chronic kidney disease, avoidable hospitalizations, dialysis, and more. If we focused on that alone, the benefit that it could have could be amazing. We continue to learn in literature, and it is hard to keep up, because there is so much that comes out about this class of medicines, other protective benefits it has too in other areas. If drugs like that are out there with a favorable side effect profile, where we can go out with them at scale, it could have a wonderful impact on the U.S. health care  

system. And the other thing too, to one of my concerns, we do not have enough primary care doctors to take care of our population in Arizona. We did a survey on our network some time ago and found that a very high percentage of them are going to be over 65 very soon.  

Again, if we do not have to worry about the complications of obesity and diabetes quite as much because it is better managed through these new innovations, that  

demand on the PCP can somewhat be relieved as well. I think there is a lot of benefits there.  

Mr. Roy: I have four bullet points for you on this topic. The first is that the reason we have a primary care physician shortage is the RUPP Committee in Medicare, which basically pays specialists more than primary care physicians due to who has political power within the American Medical Association.  

Number two, there are statutes, the Stark statute and the antikickback statute that basically make it very hard for technology to be interoperable in a way that people can monetize and entrepreneurs and innovators can monetize.  

We have to revisit Stark and antikickback laws and modernize them, so that technology can be more interactive within various health care providers.   

The third thing is AI. Right now, if you have a primary care shortage and you do not want to fix RUPP, the other thing we can do is use AI to enable nurses and other physician extenders to practice to the top of their licenses. We should also reform the licensing laws that unfairly restrict what nurses and extenders can do. That can help address some of the shortages.  

And the final thing I will mention is that when it comes to drug development, one of the real mismatches that we have is that drug companies can basically charge a million dollars per patient per year if they develop a drug for a super rare disease, but they cannot for diabetes because it is a more competitive market.  

On the flip side, the clinical trials for a rare disease are much cheaper than for a large disease like diabetes, because the FDA will make you do a trial with 50,000 patients and five-years of outcomes data that costs you literally $2 billion to run.  

And what do pharmaceutical and biotech companies say? They say well, I do not want to develop a new diabetes drug or a diabetes treatment because I will have to spend $2 billion developing it and if I am wrong at the end, I am out of luck. Whereas if I develop a drug for a super rare disease that only 50 people in America have, I can make the same amount of money, but my upfront risk is lower.  

So that is something we have to revisit if we want to actually create an innovative ecosystem that is addressing common chronic diseases like diabetes and heart disease.  

Chairman Schweikert rounded out the hearing with a discussion on PBMs and pharmaceuticals and new innovations and technology that could change the way we do health management and access to pharmaceuticals.  

Mr. Roy: Here is the biggest problem on the drug side. The biggest problem on the drug side is that we have a completely different statute governing generic competition for what are called small molecule drugs, oldfashioned drugs that you can synthesize in a chemistry lab, and a completely different statute to regulate off patent competition for biologic molecules that are engineered and manufactured in living cells.  

That is Title VII of the Affordable Care Act, which is called the Biologics Price Competition in Innovation Act of 2009. The pharmaceutical industry basically put all sorts of subtle kind of time bombs in that bill, that basically make it a lot harder to develop generic biologics.  

We now call them biosimilars, that would then drive down the price of those drugs when they go off patent. So as a result, we are not seeing cheap generic biologics in the same way that the HatchWaxman Act on the small molecule drug side allows for us to have commodity pricing when a drug goes off patent.  

That is a huge win for public health. When Lipitor goes off patent, suddenly, everyone can basically have free cholesterollowering drugs. That is a huge win for public health. We are not doing that on the biologic side, and the consequence of that is today 54 percent of spending in the U.S. on prescription drugs is for biologic drugs that represent less than four percent of prescriptions.  

In fact, 91 percent of prescriptions are for generic drugs, and then nine percent of prescriptions are for branded drugs, and of those nine percent a very small percentage, less than one percent drive nearly half of all drug spending. That is because Congress made it hard for us to develop generic competitors to those drugs.  

Mr. Tingle: There is amazing stuff coming, the power and potential of regenerative medicine and all kinds of things.  

But we have things in our hands now. You talked about GLP1s. We have early cancer, multicancer early detection tests and we all, private and public, need to be working to get these into the hands of the people that are going to benefit from them.       

Because a few years ago these things were unthinkable. Now we have them. They're amazing tools.   

Senator Eric Schmitt (R-MO): Obamacare has been a Disaster for Working Families 

Watch Senator Schmitt’s remarks here. 

Senator Eric Schmitt led off by highlighting the failures of Obamacare, with premiums up over 200 percent, and insurance profits up over 1,000 percent. His first question touched on how families can apply for Obamacare without verifying immigration status for the whole family. He asked for suggestions on closing that loophole.  

Mr. Roy: There was a recent GAO report that raised a lot of concerns about all sorts of program integrity in the Affordable Care Act (Obamacare) exchanges. That report was about income verification, identification, and social security numbers, but the same goes for immigration status. If you have a robust system for Program Integrity where you're verifying people's social security numbers, that should address immigration status, because those two things go together. But also, what's really important is that one of the design flaws of the ACA is there's this kind of honor system where you're asked to estimate what your future monthly income is, and you get a subsidy based on what you think your future monthly income is. It would be much better for ACA subsidies to be based on your previous year's IRS returns, rather than some honor system of what you think your future income would be. 

Senator Schmitt continued with a question to Dr. Clarke about a third-party payer system and what are some of the incentives that currently exist for over utilization that Congress could address.? 

Dr. Clarke: We own hospitals, we own medical groups, we own insurance plans. We want to take a risk on the overall population. Years ago, hospitals might have been paid more for heads in beds. Someone comes to the ER and they get admitted, there's a payment made there, if we're managing a population. The pilot, which we're proposing, looks at this having us be responsible for, hitting a cost target for that population. It's to our benefit to keep them from getting admitted, especially for avoidable conditions such as heart failure, diabetes related cost, and things that we know upstream primary care and excellent specialty care can prevent. That's better health for the members and the patients.  

Senator Schmitt ended with a question on competition and its importance to lower costs. He asked Mr. Roy why Obamacare has a prohibition for physician owned hospitals and if he though they would be helpful in reducing costs.  

Mr. Roy: The American Hospital Association asked for it as a condition of their support for the bill. That's what happened. But the claimed policy argument was that there would be a conflict of interest if there were physicians owning hospitals, that they would refer people to their own hospitals and therefore steer people away from other hospitals. But what in reality has happened with the ban of physician-owned hospitals is the opposite has occurred. The hospitals buy the physician practices and control the referral volume. That was a terrible mistake and I would argue it should be repealed. 

Congresswoman Nicole Malliotakis (R-NY11): The Affordable Care Act is Not Affordable 

Watch Congresswoman Malliotakis remarks here.? 

Congresswoman Malliotakis opened with remarks on how the Affordable Care Act is not affordable. She noted how insurance company profits have skyrocketed while receiving billions of dollars in taxpayer funded subsidies. At the same time, premiums have also increased almost 100 percent since 2014 and are projected to go even higher. She discussed the need for a bi-partisan solution to prevent steep premium hikes for those relying on the ACA. She also noted the need to rein in insurance companies, brokers, and predatory PBMs. She asked the panel how to incentivize better, healthier lifestyle choices to lower premiums, using car insurance as an example: if you have a good driving record, if you take defensive driving courses, you can lower premiums.  

Mr. Roy: One of the things that the Affordable Care Act does is it actually makes it illegal for insurers to charge a different premium for someone who is healthier relative to sick. The kinds of things you're talking about with car insurance, where, if you're a safer driver and you don't get into accidents, you can get a lower premium. That's illegal in the ACA, the only thing the ACA allows you to do is charge a 50 percent surcharge if you're a smoker. That's it. One thing that they do in Switzerland that I would love for us to learn from is they allow for longer term insurance contracts. So instead of merely having one year of insurance, you could buy a three-year plan or a five-year plan, and that really incentivizes the insurer to invest more in prevention, because they reap the rewards in that third, fourth or fifth year. If you only have one year with that customer, and you put all this effort into prevention, you may not reap the benefit if that customer switches plans later. What the Swiss allow you to do is they say, okay, you can have a five-year insurance plan, and if you meet certain benchmarks, like lowering your hemoglobin, A1C, you lose weight, or you reduce your blood pressure, then we'll refund half the premium. That's something Switzerland allows that is now illegal under the ACA. 

Mr. Tingle: It's a brilliant question in the comparison to safe driving programs is quite fascinating, really. Incentives do work. I'll just give you one quick example. Our customers get points for the number of steps they take each day, and the point thresholds are 5000 steps, 10,000 steps and 15,000 steps. There's a huge spike between 5000 and 10,000 another spike between 10,000 and 15,000. People are trying to hit these targets to get the rewards.  

Congresswoman Malliotakis followed up with a question on vertically integrated insurers with medical practices, but focusing on pharmaceuticals. She noted insurer owned PBMs have driven up drug prices, reducing competition and increasing consumer costs. She asked what steps Congress could take to crack down on predatory PBM practices.  

Mr. Fiedler: I think one of the fundamental challenges we have in the PBM space is that there's just not very much competition. I'm not sure the problem, honestly, is vertical integration, per se, and just the fact that three PBMs control a very large fraction of the market, and that allows them to extract a large payment for their services. I do think there are opportunities, particularly on the employer side, from a transparency perspective, of helping employers better understand the terms and the contracts they're signing and hopefully find ways to get a better deal on behalf of their employees. 

Senator Ashley Moody (R-FL): The Irresponsibility of Maintaining the Status Quo 

Watch Senator Ashley Moody’s Remarks here.  

Senator Moody discussed how irresponsible it was to continue to do things as we have always done. She also pointed out the vast fraud in Obamacare and with the subsidies, along with what has recently been reported with the Medicare and Medicaid state level health programs. She was concerned that the structure doesn’t allow one person to be responsible for instituting better structures across the healthcare systems and asked if it would be beneficial to have a healthcare czar.  

Mr. Roy: As you rightly noted, program integrity is a huge problem across all of these federal programs. The fraud rate in Medicare is about 10 percent, which is $100 billion a year. In Medicaid, it's somewhere between 10 – 30 percent which is another 100 plus billion dollars a year. In the ACA, we don't have good numbers, but it's probably also significant. For the ACA, there are two pieces that allow easily for fraud. One, there's the identity verification, which the GAO report mentioned and highlighted. There's also income verification. That's actually a bigger source of fraud in the ACA, where you are asked to provide your estimated future income in the honor system, and then you get a subsidy based on that amount, as opposed to actual income verification. One of the statutory reforms to focus on is structure. You can have a czar that has a program integrity czar, and there are program integrity divisions within HHS already. But the real question is, how do you design the system. Will it lead to more fraud or less fraud? My argument is that if you have a universal individual market where people are buying health insurance on their own with their own money, and yes, getting some assistance if needed for vulnerable populations, with a look back on your retrospective income rather than prospective income, that creates a lot of the design that limits the ability for fraudsters to take advantage of the taxpayer.  

Congresswoman Victoria Spartz (R-IN05): Consolidation and Lack of Competition in Healthcare is Bad for Americans

Watch Congresswoman Spartz remarks here.? 

Congresswoman Spartz was interested in what can be done to bring back more competition in the provider market.  

Mr. Roy: How do we incentivize healthy behavior for people who are enrolling in the ACA changes, one of the things I addressed earlier today, is the ability to have longer term insurance contracts. If you have a three- or five-year insurance contract, you can actually offer refunds to people who meet certain thresholds, such as lower weight, lower blood pressure or lower A1C hemoglobin. Those are some changes we could do, but they require a statutory change, because right now, it's illegal to charge people different premiums based on their health status. On your point about the broader issue of health care costs, there's a there's a lot we can do. Again, this is a topic that can be very broad, but specifically on the issue of hospital competition, I would raise the Hospital Competition Act, which was introduced in the House by then Representative Jim banks, and it was introduced in the Senate. It's also part of a larger bill called the Fair Care Act that has mechanisms to not only address the consolidation that will occur in the future but also address the consolidation that's happened in the past. We have to create incentives for de-consolidation without using the heavy hand of antitrust. And I would argue that the best way to do that is to limit the market power of hospital monopolies and make sure that they can't overcharge consumers. 

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