Reducing Costs And Improving The Quality Of Healthcare – The goal of health care reform is to increase access. A major goal of the ACA is to increase insurance coverage through Medicaid expansion, public health exchanges, and individual mandates. However, a possible unintended consequence of expanding coverage is that the lack of primary care physicians will worsen as a result of an increase in the number of people trying to get help (demand) without increasing the already insufficient number of PHCs (supply). In addition, by reaching more people, there will be an increase in visits to the doctor and an increase in overall health care costs.
The hope is that increased coverage will improve population health, but will it save money in the long run? This is unclear. Massachusetts began the health care reform process several years before the ACA. The first phase focused on increasing access (health insurance coverage). Now more people are covered and it costs more. The next step in Massachusetts is to contain spending, but it’s too early to know if that will work.
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Reducing Costs And Improving The Quality Of Healthcare
“Perhaps the most difficult long-term challenge facing Obamacare is controlling spending. The ACA does provide substantial savings in Medicare, but limits on other spending are less robust. The law initiates a wide range of experiments in health care delivery and payment reform whose success is highly uncertain.”
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“The costs associated with current system inefficiencies highlight the urgent need for a large-scale transformation of the system. The committee estimated that about 30 percent of health care spending in 2009—about $750 billion—was wasted on unnecessary services, excessive administrative costs, fraud and other problems. In addition, inefficiency causes unnecessary suffering. According to one estimate, approximately 75,000 deaths could have been prevented in 2005 if each state provided health care at the level of quality of the best state.”
“62.1% of all bankruptcies are caused by medical reasons. Most of the debtors for medical facilities were well educated and belonged to the middle class; three-quarters had health insurance. The proportion of bankruptcies related to medical problems increased by 50% between 2001 and 2007.”
“Just as the patient safety movement has helped caregivers think about how to prevent unintended harm, a new movement is needed to help caregivers think about unintended financial loss as well.”
Costs of Care is a nonprofit group dedicated to “transforming the delivery of health care in the United States by enabling patients and their caregivers to reduce their health care bills.” Valuable healthcare solutions should benefit patients’ health, their finances and reduce system costs.
Cost Of Health Care
Health economist Yu E. Reinhardt writes in the Journal of the American Medical Association (2013) that “the idea that American patients should have ‘more skin in the game’ through greater cost-sharing is often advanced, prompting them to seek cost-effective health care, for now it was about as smart as blindfolding shoppers entering a department store in the hope that inside they could and would intelligently buy the products they were looking for.”
Would any other business survive if it behaved like a hospital? Watch this video for an example of a customer service model that won’t survive in a competitive hotel environment.
The health care model is not acceptable, but the provisions of the ACA require greater uniformity and transparency of out-of-pocket cost information for consumers. During the presidential campaign, Americans will be bombarded with proposals for major improvements to the US health care system. and small ones that would build on or radically update the Affordable Care Act (ACA). All will claim to reduce costs and improve quality. To achieve this, the proposals would mostly focus on what is called “wasteful spending” on health care, costs not related to quality improvement, which some estimate account for more than one-quarter of total health care spending.
But as Michael Porter and Robert Kaplan of Harvard Business School have argued, we need to examine costs at a more granular level where clinical outcomes are aligned with business and administrative processes. Although challenging, experts have recently gotten better at measuring the effectiveness of many interventions, from demand-side options such as consumer-directed health plans to supply-side options such as alternative payment methods for health care providers. These interventions are beneficial because they largely eliminate waste in the system, avoiding hard trade-offs between cost, quality, and access to care.
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To assess what we already know, what we can save in our system, and what politicians, entrepreneurs, investors, and health managers should focus on, we categorized expert-measured interventions by different strategies put forward by different candidates in presidents, and analyzed their overall potential savings. We considered four strategies: the current trajectory of the health care system; comprehensive demand reform; aggressive supply reform; and a mix of supply-side and demand-side reforms.
Before considering what can and should be done, it is important to note that the public and private sectors have already made significant progress in reducing rising health care costs and improving quality. As a result, between 2009 and 2013, the United States saw the slowest growth in health care spending in five years, although the pace of growth in 2014 raises questions about what will need to be done to contain costs at a steady pace. basis
Notably, the adoption of private sector payment-based reforms such as the Massachusetts Blue Cross Blue Shield Alternative Quality Contract, combined with public sector reforms such as accountable care organizations and bundled payment initiatives, appear to be changing how the system delivers services organized and, importantly, making money. Progress has also been made in implementing demand-side measures to encourage consumers to make smarter purchasing choices. These include the widespread adoption of health plans, such as Silver plans, on state exchanges that require subscribers to contribute at least 30% of costs up to a specified limit, and the adoption of technology that allows consumers to make informed decisions, such as rate Castlight Health. means of transparency. These trends are likely to lead to increased market share for suppliers that provide high quality at lower costs.
Although only 20% of health care spending is going to new value-based payment models and only 20% of people with employer-sponsored insurance have high cost-sharing plans, both shares are expected to grow rapidly. The US Department of Health and Human Services has said it plans to transition at least 50% of all its payments to these new payment models by 2018. Since supplier margins are incredibly thin and fixed costs are very high, small changes in incentives or market share should have a significant impact.
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We believe that the current set of public and private sector interventions will continue to work and generate annual savings of $140 billion (over five years), roughly 5% of 2014 health care spending. the annual savings generated by these programs are more than five times the average annual federal savings that the Congressional Budget Office estimates the Affordable Care Act (ACA) will provide this decade.
It changes the way providers are paid, so their earnings are closely linked to results and efficiency rather than the volume of services provided. We believe that the United States should pursue both strategies.
Complex reforms from the demand side. Accelerate the growth of consumer-directed health plans, combined with other reforms to encourage consumers to be more price-sensitive. These reforms should include increased regulation to promote price and quality transparency and innovation for payers to implement price-referenced insurance plans. With this strategy, the country could achieve an additional $110 billion in savings on top of the $140 billion it is already on track to achieve, representing an additional 3% of health care spending. However, this approach would not be entirely positive: evidence suggests that some of the cost reductions will result from patients not seeking the care they need due to increased price sensitivity. Innovations in insurance products, such as value-based insurance schemes that reduce the cost-sharing of high-performing clinical services, can help address these issues.
Aggressive reform proposals. Accelerate the transition from fee-for-service to alternative payment methods, such as bundled payments or capitation budgets for individuals, which will also encourage providers to reorganize their care delivery models. This strategy would save an amount similar to the demand-side strategy, and early implementation evidence suggests that it will not reduce the quality or use of ‘necessary’ care.
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The choice between demand-side reforms and supply-side reforms is artificial. We can pursue both together. This would result in an additional $170 billion in savings (rather than $220 billion each) due to some overlap. By also taking advantage of other specific opportunities (such as reducing administrative complexity to that of other service industries), which would yield $130 billion, the United States could save a total of $440 billion annually, or 14% of total health care costs. If achieved within five years, it would halve projected growth in health care costs, reducing the average annual growth rate from 5.5% to 2.4%.
However, this only accounts for 40% of waste in the health care system, leaving another 60% of waste, or 20% of total health care costs, that could be eliminated. About a third of this remaining $600 billion opportunity comes from wasteful clinical goods and services, illegal fraud and abuse
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