The health care systems most commonly put into practice in developed nations aren’t necessarily broken or beyond repair. But they do need to be redirected. In fact, among certain health care providers and users, health care models are in place that, if adopted more widely, could save hundreds of billions and dollars and improve peoples’ health along the way.
This message, and the data to support it, were presented by consultant Oliver Wyman at the 2014 World Economic Forum Annual Meeting in Davos, Switzerland. Oliver Wyman is a unit of Marsh & McLellan.
“Health care costs are rising rapidly all over the world,” says Dr. Jim Bonnette, Oliver Wyman’s chief medical officer. “Many health care systems are trying to keep them down through reducing what they pay for a given procedure or through rationing, an approach in the long run that forces trade-offs between quality, access, and sustainability. But there is another way.”
Oliver Wyman extrapolated the effect of three basic care models on health care costs in the 34 nations of the Organization for Economic Cooperation and Development (OECD). Although it identified other efficacious models, it chose the three it believed would have the broadest impact on both individual health and the cost of medical care.
The models were:
- Advanced Primary Care model, which is designed to provide preventive care to the relatively healthy efficiently and inexpensively, and provides considerable caregiving support to the primary care physician from nurse practitioners and physician assistants;
- Intensive Outpatient Care Program for patients with late stage or multiple chronic diseases;
- “Extensivist care” program that focuses on coordinating and simplifying the care of the sickest, most complex patients by surrounding them with such professionals as social workers and nutritionists to support the primary care physician.
After running the numbers based upon their experience with these three innovative care models, Oliver Wyman offered the following conclusions:
- The three innovations together could save the nations of the OECD $440 billion dollars, or approximately 13 percent of total health care costs.
- Roughly half of the impact came from IOCP, which accounted for $209 billion in savings. The Extensivist program (which treats a much smaller number of patients with much higher costs) followed close behind at $177 billion.
- The United States had the largest potential savings: $253 billion, or 14.4 percent of total health care spend. The non-U.S., non-U.K. OECD nations had the lowest potential savings as a percent of health care spend: 12 percent, or $170 billion.
While the projected savings are, of course, rough estimates, Oliver Wyman said it adjusted for demographics, country-by-country health status, and existing reforms.
What is it that these health care models have in common? Oliver Wyman identified three critical elements:
- Coordination of care to ensure that patients actually receive the care they need and to eliminate waste and duplication.
- Standardized care to drive consistency and high quality while leveraging incentive systems that encourage physicians to find the most cost-effective solutions to patient needs.
- Matching patient needs with the right care model and physician skills.
“By most estimates, 40 percent of what the developed world spends on health care is wasted,” Bonnette says. “The 14 percent savings from these three reforms would give us a good start on eliminating waste and put us in the enviable situation of spending less to get better care. We shouldn’t stop there though,” Bonnette adds. “Our research finds that surgical factory models and other advances can make inroads on the remaining 26 percent of waste while improving outcomes.”