August 2, 2012 | 10:48 AM |

Heavyweights Propose Top Health Care Cost-Saving Strategies

FILED UNDER: Insurance, Medicine/Science, Money, ACA, health cost, medicare

(Tax Credits/flickr)

Frankly, I’d prefer crashing a dinner party with these guys to reading their insightful, timely (but, let’s face it, a little dry) paper in the August 1 issue of The New England Journal of Medicine titled “A Systematic Approach To Containing Health Care Spending.”

Still, the piece by these health policy luminaries (including Ezekiel Emanuel, M.D., Ph.D., Stuart Altman, Ph.D., Donald Berwick, M.D., M.P.P., David Cutler, Ph.D., Tom Daschle, B.A., Arnold Milstein, M.D., M.P.H., John D. Podesta, J.D., Uwe Reinhardt, Ph.D., Meredith Rosenthal, Ph.D., Joshua Sharfstein, M.D., and Peter R. Orszag, Ph.D., among others) is worth reading, as it lays out numerous smart strategies for cost-saving and quality improvement as part of the medical journal’s election 2012 coverage. The piece also comes, coincidentally, as Massachusetts approves its own first-in-the-nation health cost savings plan, with many similar strategies.

The author’s write:

Although the Affordable Care Act (ACA) will significantly reduce Medicare spending over the next decade, health costs remain a major challenge. To effectively contain costs, solutions must target the drivers of both the level of costs and the growth in costs — and both medical prices and the quantity of services play important roles. Solutions will need to reduce costs not only for public payers but also for private payers. Finally, solutions will need to root out administrative costs that do not improve health status and outcomes.

Among their suggestions:

– Promote payment rates within global targets

– Accelerate the use of alternatives to fee-for-service payments

– Use competitive bidding for all commodities

– Require exchanges to offered tiered products

– Simplify administrative systems for payers and providers

– Require full transparency of prices

– Make better use of non-physician providers

– Expand the Medicare ban on physician self-referrals

– Leverage the federal employees program to drive reform

– Reduce the cost of defensive medicine

About the author

Blogger, CommonHealth Rachel Zimmerman worked as a staff reporter for The Wall Street Journal for 10 years, most recently covering health and medicine out of the paper’s Boston bureau. Rachel has also written for The New York Times, the (now-defunct) Seattle Post-Intelligencer and the alternative newspaper Willamette Week, in Portland, Ore., among other publications. Rachel co-wrote a book about birth, published by Bantam/Random House, and spent 2008 as a Knight Science Journalism Fellow at MIT. Rachel lives in Cambridge with her husband and two daughters. View all posts by Rachel Zimmerman →

  • http://twitter.com/josharchambault Josh Archambault

    As a friend wrote to me on the report (and edited here for length):

    The paper states that “the only sustainable
    solution [to entitlements] is to control overall growth in costs.”  The only problem is that, over the next 25 years, demographics count for at least
    half – and as much as three-quarters – of projected increases in spending on
    Medicare, Medicaid, Social Security, and ACA’s insurance subsidies.
    These changes make existing entitlements untenable over the long
    term.  Yet the solutions they put forward seem only focused on containing
    health costs, the paper presumes a status quo of existing
    entitlement structures that is fundamentally unsustainable.

    There are some good market-based solutions in their paper with competitive bidding in Medicare:
    “Instead
    of the government setting prices, market forces should be used to allow
    manufacturers and suppliers to compete to offer the lowest price.  In
    2011, such competitive bidding reduced Medicare spending on medical equipment
    such as wheelchairs by more than 42%….We suggest that Medicare immediately
    expand the current program nationwide.  As soon as possible, Medicare
    should extend competitive bidding to medical devices, laboratory tests,
    radiologic diagnostic services, and all other commodities.”

    Given that strong
    endorsement of competitive bidding for some of Medicare, the real
    question is why the authors don’t believe in competitive bidding for all
    of Medicare

  • Christine

    “Restrictive state scope-of-practice laws prevent nonphysician providers from practicing to the full extent of their training. For instance, 34 states do not allow advanced-practice nurses to practice without physician supervision.23 Making greater use of these providers would expand the workforce supply, which would increase competition and thereby lower prices.”

    So what happened with that midwifery law? Can CPMs now practice legally? Can CNMs do homebirths?