Though there are continuing reports of a slowdown in health care costs — despite some disagreement on the actual causes — much more needs to be down in the coming year.
That's the consensus reached by researchers from the Commonwealth Fund.
Last year health care spending rose only moderately for the third straight time, increasing by 0.8 percent per person, slightly less than the rate of growth of gross domestic product per capita. This trend marks a departure from the previous five decades, and could be fueled in part by payment reforms contained within the Patient Protection and Affordable Care Act, analysts said in a new report released this week in the New England Journal of Medicine.
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Others believe a great deal of that slowdown stems from the recession. Researchers pinpointed other potential factors contributing to lower costs, including:
- Technology slowdowns, such as fewer new blockbuster drugs and slower growth in the use of existing technologies such as cardiac procedures
- Higher out-of-pocket costs for patients, which discourage utilization
- Incentives created through PPACA and the private sector for providers to prescribe less care, including penalties for hospital-acquired conditions and preventable hospital readmissions, along with the proliferation of accountable care organizations — in which a carrier and a group of providers share in savings that come from delivering more efficient care — and Medicare bundled payment initiatives in which a single payment covers all treatment required in an episode of care such as a hip replacement.
Either way, analysts said, the United States will need to "reengineer health services to make them more efficient — to go after the one-third of health spending that is estimated to be wasteful."
"Even if spending growth stays low, our current level of expenditures is far higher than we need or can afford," said coauthor and Commonwealth Fund president David Blumenthal.
Analysts said the cost-cutting approaches that need to be taken include:
- Provider payment reform: Discarding current fee-for-service payment models in favor of arrangements such as capitation or partial capitation, global budgeting, or risk-sharing arrangements such as those supported by PPACA's accountable care organization program.
- Reforming the delivery system: Strengthening three areas, in particular, such as the usability of health information technology, care coordination for the sickest and most expensive patients, and primary care services.
- Engaging consumers in making better health care choices: With better information and incentives, patients should be rewarded for choosing providers that have better outcomes and lower costs of care.
- Making health care data more available: Patients should have better information about the prices providers charge as well as the quality and safety of their care.
- Reducing administrative expenses: While standardization of billing and claims forms and processes has begun under PPACA, much more needs to be done.
The authors said though it's too early to say if cost growth will remain slow, given the already high level of current spending and evidence of waste, the private and public sectors will continue to look for strategies to contain costs even if growth stays low.
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