Fed chair says 'eclectic' overhaul of healthcare system needed

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Higher taxes, service cuts in various government programs, or more deficit spending will be necessary to achieve needed improvements in the healthcare system, according to Federal Reserve Board Chairman Ben Bernanke.

"Taking on these challenges will be daunting," Bernanke said, adding that the public "should not expect a single set of reforms to address all concerns. Rather, an eclectic approach will probably be needed."

Current healthcare spending comprises about 16% of the U.S. economy, Bernanke noted. The portion will rise to 22% of gross domestic product by 2020 if changes are not made, he added.

"[I]mproving access and quality of care may increase, rather than reduce, total costs," he noted. "Whether we are getting our money's worth" will be a core question to answer, he added.

He did not embrace the idea of some sort of independent policy-making board, saying he was "skeptical" that politics could be kept out of any healthcare reform process. He also said that "the public and their elected representatives" should deal with proposed changes to the healthcare system.

The nation's top economist, Bernanke made his comments Monday at a "Health Reform Summit" sponsored by the Senate Finance Committee at the Library of Congress.