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How to Stop Rising Healthcare Costs

Janice Simmons, for HealthLeaders Media, September 2, 2009

The usual short term measures to address rising healthcare costs, such as reducing prices, will not be sufficient to "bend" downward long-term healthcare spending. Instead, President Obama and Congress should use more aggressive reforms that will slow spending growth—while improving quality, a group of 10 national health policy experts is recommending.

The group's effort was convened by the Engelberg Center for Health Care Reform at Brookings, with support from the Robert Wood Johnson Foundation. In their plan, called "Bending the Curve: Effective Steps to Address Long Term Health Care Spending Growth," they call for transitioning to a "system of greater accountability," which will provide greater flexibility for private and public stakeholders "to experiment with programs and measure results—to see what works best."

As a foundation for improving value, all stakeholders in the system need better information and tools to be more effective, they propose. Provider payments then should be "redirected toward rewarding" all improvements in quality and reductions in cost growth.

In addition, they call for health insurance markets to be reformed and government subsidies restructured "to create competition and improve incentives around value improvement rather than risk selection." And they suggest that individual patients be "given greater support for improving their health and lowering overall health care costs."

To get there, they are calling for a series of steps to accomplish those goals:

Building a foundation for cost containment and value based care. Holding spending growth while improving value will require information and tools, such as health information technology (IT) systems, they said. However, providing these tools is not enough—stakeholders will also need better incentives to use them.

  • Efforts should be made to ensure that investments in health IT are effective by linking "meaningful use" health IT bonuses to achieve better results; creating interoperability and provider communication; and funding technical support programs to ensure providers adopting health IT have access to comprehensive support for overcoming implementation challenges.
  • The best use of comparative effectiveness research (CER) should be sought by creating an entity to allocate CER funding based on the expected value of the evidence to be developed, while protecting providers and insurers from liability when they follow best practices identified by evidence.
  • The healthcare workforce should be improved through creating incentives for states to amend the scope of practice laws to allow for greater use of nurse practitioners, pharmacists, physician assistants, and community health workers. Also, graduate medical education payments should be amended to promote the teaching of high value care practices.

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