Bernanke: Improving health care is critical challenge

WASHINGTON — Bolstering the performance of the U.S. health care system is one of the biggest challenges facing the country, Federal Reserve Chairman Ben Bernanke said Monday.

New medical technologies and treatments are allowing people to live healthier, longer and more productive lives. However, the aging of millions of baby boomers coupled with rapidly rising heath care costs are accounting for an ever-growing share of both personal and government budgets — strains that will become increasingly burdensome unless changes are made, the Fed chief said.

Challenges, he said, fall into three major areas: improving access to health care for the 47 million Americans — or about 16 percent of the population — who lack health insurance; bolstering the quality of care; and controlling costs.

"Improving the performance of our health care system is without a doubt one of the most important challenges our nation faces," Bernanke said in remarks to summit on health care reform organized by a Senate panel on Capitol Hill.

The Fed chief didn't talk about the Fed's next move on interest rates or the state of the U.S. economy in his speech or during a brief question and answer session afterward.

Many economists believe the Fed will hold a key interest rate steady at 2 percent, a four-year low, when it meets next week. Bernanke and other Fed officials have sent strong signals that the Fed's rate-cutting campaign, started last September to shore up the ailing economy, was probably over because of mounting concerns about inflation.

Wall Street investors and some other believe that the Fed might be forced to raise rates later this year to thwart a dangerous inflation flare-up. Others, however, still think the Fed will be able to hold rate steady through the rest of this year.

It's a difficult spot for Fed policymakers. They are trying to aid an economy that has been badly bruised by the blows of a housing, credit and financial debacles. At the same time, they don't want inflation to take off. If the Fed were to start boosting rates too soon to fend off inflation, that could deal a set back to already fragile economic growth.

On the health care front, Bernanke didn't recommend specific solutions, saying the difficult choices involved with improving access and quality and controlling costs were best left to policymakers in Congress, the White House and elsewhere.