Report: As Health Care Costs Soar, Market-Driven Reforms Offer the Best Rx

02 December 2025 | Press Release

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The US health care system stands at a crossroads: Rising costs, workforce shortages, and a disjointed system are threatening access to high-quality care. Recent federal policy changes, including tighter eligibility requirements, have only intensified the urgency for reform.

A new report from the Committee for Economic Development (CED), the public policy center of The Conference Board, calls for a shift towards a comprehensive, cost-responsible, and market-driven system. The proposed approach is anchored in value-based, transparent pricing and stronger primary and preventive care, aimed at improving health outcomes while constraining costs and improving efficiency.

The study comes at a time when health care accounts for nearly one-fifth of US GDP and is on track to increase further. In 2023, total spending rose by 7.5%—outpacing economic growth. These rising costs are straining household budgets, public programs, and employers alike.

“A strong health system doesn’t just promote individual well-being, it drives innovation and economic resilience by keeping Americans healthy, productive, and engaged in the workforce. This is the moment to rethink the fundamentals and commit to a system that focuses on value-based care,” said David K. Young, President of CED.

Policy Recommendations

To ensure quality, access, and cost-effectiveness in the health care system, policymakers and business leaders should recognize that:

Well-functioning competition among private health plans and strong, accessible primary care set the conditions for high-quality care and improved outcomes.

Prevention and coordinated primary care are fiscal imperatives that strengthen the workforce, improve outcomes, and constrain long-term costs.

Modernizing eligibility and verification systems can minimize unnecessary disenrollment and preserve coverage for eligible individuals, automating data matching, improving performance management to strengthen program integrity and improve outreach and communication with enrollees while preserving program integrity and fiscal accountability.

Interoperable, privacy-protected systems should verify eligibility, track outcomes, and reduce administrative waste through transparent data standards and governance.

Predictable, inflation-adjusted reimbursement tied to quality and outcomes and the use of alternative payment models supports stability for providers and long-term efficiency.

New investments in rural health can demonstrate how public funding and private-sector partnership—through telehealth, data integration, and workforce investment—expand access, strengthen provider solvency, and translate fiscal responsibility into sustainable modernization. The Rural Health Transformation (RHT) Program should serve as a catalyst for modernization to strengthen access and solvency in rural communities.

Budget savings should be linked to measurable outcomes in efficiency, access, and quality through outcome-based budgeting and transparent performance audits.

Competition drives affordability and consumer choice. Site-neutral payments, stronger transparency standards, and limits on facility-fee differentials can help contain prices and promote market competition.

Prevention is also a fiscal strategy. Aligning Federal and state programs to embed chronic-disease reduction and other prevention efforts into performance measures will yield fiscal benefits as well as improved outcomes.

About The Conference Board

The Conference Board is the member-driven think tank that delivers Trusted Insights for What’s Ahead^®®. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. TCB.org

The Committee for Economic Development (CED) is the public policy center of The Conference Board. The nonprofit, nonpartisan, business-led organization delivers well-researched analysis and reasoned solutions in the nation’s interest. CED Trustees are chief executive officers and key executives of leading US companies who bring their unique experience to address today’s pressing policy issues. Collectively, they represent 30+ industries and over 4 million employees. TCB.org/us/Committee-Economic-Development