Can We Reduce Health Care Spending?
Searching for Low-Hanging Fruit in the Garden of Health System Reform
Executive Summary
The goal of health care reform is to improve health care quality, efficiency and access to care for
all Americans. To make reform possible many have argued that we must find savings in the
existing system to offset the costs of new programs. Indeed, the US health care system is the
most expensive in the world—whether measured in absolute dollars, as a percentage of GNP, or
in per capita terms. The US uses more care and pays higher prices than other industrialized
counties.1 so, where might policy-makers look to find cost-savings?
We examine the recent literature documenting the major drivers of health care costs in the U.S.
and identify where new policies and initiatives could reduce costs without adversely affecting
quality or access to medically necessary care. Estimates of potential savings are based on the
existing literature. We indicate where the evidence is strong and where it is weak or highly
fragmented. Particularly in the current economic environment, cost savings that occur sooner
are preferred. We comment on the timing of potential savings. Finally, savings that benefit some
stakeholders while disadvantaging others will face more resistance than those that offer “winwin”
scenarios. We reflect on incentives to cut costs and the comment on the distribution of
costs and benefits that may result from actions.
The literature suggests that a large slice of the nation’s $2.4 trillion health care budget is
potentially controllable through political, personal, administrative or clinical actions. We could
cut excess spending by the following amounts if we enacted evidence-based policies in five key
areas:
- Modifying unhealthy behavior: $408 billion per year
- Improving care management and coordination: $111 billion per year
- Streamlining transactions and eliminating fraud: $203 billion per year
- Harnessing competition to reduce medical prices: $148 billion per year
- Removing incentives that promote excess use of care: $151 billion per year
Download the PDF to view the entire article.
This article was prepared for general information purposes only to permit you to learn more about Ingenix Consulting and its services. It is not intended as a basis for decisions in specific situations, may not be current, and is subject to change without notice.
Simply enter keywords to find related Insight Papers.
All words
Exact phrase
Any word
Date Range
All dates
| In the last: |
|