What would it take to bring health care costs under control?
Kaiser Family Foundation has released an analysis of health care expenditure growth. The “snapshot” report identifies a variety of approaches that are being implemented or proposed to reduce costs or reduce the rate of growth. These comprise the usual suspects: health care IT, disease management, predictive modeling, wellness programs, pay for performance, payment rate reductions, cost-sharing, consumer directed plans, limitations on medical malpractice awards. But despite all these initiatives, the news isn’t good:
Although many of these efforts may lead to efficiency and quality gains, none would appear to be of a scale to have any meaningful impact on the overall cost picture.
So what would it take if we were serious about cost reduction? The report doesn’t offer any ideas, but here are some of mine. (Note, that I don’t necessarily advocate these measures. I’m just pointing out what it would take.)
- Restricting the number of health care providers and facilities
- Reference pricing for pharmaceuticals
- Sending patients offshore for treatment
- An explicit decision not to pay for everything
- A single payer system
Considering the paucity of support for these measures, don’t expect the health care expenditure curve to flatten out any time soon.May 3, 2006