We are approaching the election year, and again, the health care, particularly its cost, is the focus of the public’s intense attention. There are myriads of publications on this subject with “justifications” of entirely opposing points of view.
Instead of taking sides in these endless debates, let’s recall just a few essential facts about the state of U.S health-care preceding the Affordable Care Act:
1. Millions of people lacked health insurance.
2. People with preexisting conditions were excluded from insurance coverage, and some young people were unable to be covered by their parents’ insurance.
3. Health-care costs were increasingly high, despite the spread of Health Maintenance Organizations (HMOs).
The first two problems were addressed by the ACA (although the first one not entirely). The third remains a considerable challenge. If the cost of health care were affordable, few would oppose the first two items. Retaining the first two elements requires substantial financial investments.
The main options for funding them include mandatory insurance requirements, high deductible plans, and high costs of insurance policies, higher taxes, or increased national debt.
None of these options are appealing or politically palatable, and in the general public, there is no appetite for either of these solutions. It appears that the goal of preserving those two attractive features of the ACA while lowering health-care costs is not feasible.
Today’s annual U.S. health-care cost is over $3.6 trillion, and it is the most significant component of the economy — over one-sixth of the U.S. Gross Domestic Product (GDP).
For this money, the U.S, in return, gets 400,000 avoidable deaths. It is reasonable to expect for over $3.6 trillion per year; we could do significantly better.
According to the study “Best Care at Lower Cost,” published by in 2012 by the Institute of Medicine (IOM, currently, the Academy of Medicine), “the committee estimates $750 billion in unnecessary health spending in 2009 alone.” There is no affordable way to provide high-quality care unless we address this waste.
Can any proposed solution hope to gain bipartisan support? Yes. In their 2012 “Journal of American Medical Association” article, “Innovations in Care Delivery to Slow Growth of U.S. Health Spending,” two leading U.S. health policy experts, Drs. Arnold Milstein and Stephen Shortell quoted a potential solution.
They estimated that the national adoption of patient flow optimization practices — the optimal matching patient demand with health-care capacity— has the potential to reduce total U.S. per capita spending “by 4 percent — 5 percent”, which amounts to $140 to $180 billion a year.
This tested intervention does not require capital investments. Quite to the contrary: every hospital that implemented this approach has saved millions of dollars and many human lives. For example, Cincinnati Children’s Hospital documented $100 million in avoided capital costs and even more significant amounts in their annual margin improvement.
Even more importantly, this intervention has been proven to reduce medical errors and patient mortality, as well as Emergency Room waiting times and hospital overcrowding.
A federally funded New Jersey Hospital Association collaboration with 14 participating hospitals increased access to care for thousands of additional patients, while significantly improving quality of care, staff satisfaction, and saving millions of dollars.
There are many more successes. However, this proven money-saving and health-care improvement initiative have mainly been ignored due to a hospital culture habituated to the wasteful status quo.
“Direct and indirect savings from smoother patient flow could give Medicare a new lease on life, underwrite biomedical research, reduce the national debt, support schools, and serve many other private and public purposes,” wrote IOM former President Dr. Harvey Fineberg in a New England Journal of Medicine article “Smoothing the Way to High Quality, Safety, and Economy” that I co-authored. “At the same time, properly managed patient flow can reduce medical errors and enhance the quality of care. We owe these improvements to our patients, to the health-care community, and the next generation.”
There is an urgent need to redirect the national focus of health reform debates towards recapturing hundreds of billions in health-care waste, and thus toward tested health-care cost reduction programs.
If consumers of either political stripe are informed of the potential savings and quality improvements in their care, they will demand them as policy priorities.
As discussed above, it has been practically proven also to preserve popular aspects of the ACA while reducing health-care costs.
The alternative offers only a “Sophie’s choice” between health-care quality and its cost.
Eugene Litvak is president of the non-profit Institute for Healthcare Optimization and an adjunct professor at the Harvard School of Public Health.