Bending the cost curve in health care

Leonard Schaeffer, founding chairman and CEO of WellPoint, the nation’s largest health insurer, writes about a recent effort to develop a consensus on strategies to contain costs and improve value in health care.

My first involvement with national health care reform was in the 1970s when I served as administrator of the Health Care Financing Administration (now the Centers for Medicare & Medicaid Services).  Since then, the academic community has made great progress in defining the health care cost problem and analyzing techniques to deal with it. And we now have technology to capture data to create the feedback loops necessary for a true health care system. The real challenge is to convince elected officials that practical solutions exist and should be enacted into law.

As the health care reform debate intensified this summer, RWJF and the Brookings Institution brought together a diverse group of health policy experts, economists and executives to identify practical and feasible steps to slow health care cost growth while improving value.  Our group’s effort was a microcosm of what needs to happen more broadly: Strong ideological biases were set aside to reach consensus on a list of practical strategies to reduce the rate of increase in health care costs. 

Our paper, “Bending the Cost Curve; Practical, Realistic Strategies to Contain Costs and Improve Value,” describes the consensus list.  We recommend that policies be implemented in a series of steps that link short-term foundation-building with longer-term systemic change.  Over time, these policies will create new incentives to change the behaviors of critical stakeholders.  Our recommendations would reform payment systems, regulations and institutions through four interrelated sets of activities:

• Investing in better information and tools as a foundation to guide and support a reformed health care system;
• Transitioning to accountable payment systems that reward providers for providing lower-cost, high-quality care;
• Restructuring the health insurance system to lower the rate of premium cost growth; and
• Supporting better individual choices to enhance the patient role in improving health and lowering costs.

We will disseminate our consensus document widely to demonstrate that feasible strategies do exist to lower the rate of growth in Medicare and national health care spending.  We can begin to bend the cost curve now in ways that link lowering costs with improved quality and greater value for every health care dollar we spend. 

Comments

[Eric Dishman]

It’s refreshing to hear someone particularly in your position prioritizing the necessary investment in tools and information systems, the foundation of our health care system, along side the need for reformed health insurance. Controlling costs needs to reach beyond the insurance debate and we need to focus instead on driving a new vision of personal health that improves care and saves costs by shifting the focus from institution to individual and hospital to home. Especially when discussing Medicare and the costs associated with caring for the elderly and those with chronic conditions, there is a different prioritization that needs to take place and you have hit it right on the head!

My Health Reform blog:
blogs.intel.com/healthcare

[Mary B]

Rewarding providers for lower cost high quality care is code for lowering standards of care. Supporting better individual choices to enhance the patients role is code for governmental control over people. How is this not akin to communism? The reason health care escalates out of control is that everyone receives health care but can not afford to pay for it, those costs are passed on to others. No one has discussed the truth about lowering costs. The truth about cost is that the government wants to put a price on health care and that means lowering providers income. Obama's plan merely passes additional costs on to you as a direct tax to those with health care. And that means for every person in the US citizen or not, they will receive health care on the backs of responsible Americans who work and pay for their own care instead of spending their income on other goods and services. The government constantly rewards the irresponsible acts of this country. Government supported irresponsibility.