Government and Health Care

Can health care providers deliver care on a budget?

April 29, 2013
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Want to save $2 trillion in health care spending over the next decade? It could be done without adversely impacting care, if our government used its influence to bring soaring costs into line with economic growth.

Rather than simply reacting to rising costs, major purchasers, including our government, could force health care providers to go on a budget.

Government programs and private insurers could jointly encourage providers to adopt more cost-effective care.

After all, government programs like Medicare, Medicaid and Tricare for the military already are the largest purchasers of health care in the country.

They certainly can provide incentives for better and more cost-effective care in the way they pay. If they would line up with what private payers pay for, the effects could be mind-boggling.

Because families, employers and government budgets all could get relief from growing financial health care burdens, this could find bipartisan support in deficit talks as an alternative to cutting popular entitlement programs like Medicare.

Face it, the U.S. has the world's most expensive health care system — which forecasters say will cost more than $9,200 this year for every man, woman and child in the nation.

Although spending growth has slowed in recent years, it still outpaces general inflation each year and has a dampening effect on overall economic growth.

Also, despite our rate of spending, research shows that Americans die earlier and experience higher rates of some diseases than people in other countries — regardless of age, education, income, healthy behaviors or whether they have health insurance.

We need targets for overall health care spending growth.

Changes already are taking place in some parts of the country, including financial rewards for physicians and hospitals that participate in coordinated team based treatment strategies.

Also, Medicare's 50 million beneficiaries need better assurances against catastrophic illness and incentives aimed at better outcomes at lower costs, rather than the current fee-for-service structure that has not resulted in the kinds of care that are needed.

We can free up resources for physicians and hospitals by reducing administrative costs by bringing payers into line with each other. 

Because no one likes to be put on an allowance, it takes a strong will to do it.

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