Bob Laszewski has a great posts on 5 false “solutions” to reduce health care costs. These are:
- EMR: Making electronic medical records universal will greatly improve health care quality, but the impact on cost will be minor. Better quality care can reduce iatrogenic injuries and reduce cost, but the cost reduction–if any–will likely be small in magnitude.
- Prevention. From the CBO: any gains from reducing obesity would be concentrated in the short and intermediate period “because some of the savings will be offset by increased longevity and the cost of disease that are most prevalent during old age.”
- Outcomes Research: Laszewski claims that “inefficient use of technology is the key driver in health care spending accounting for an estimated 38% to 65% of spending growth. The problem…with the suggestions that more outcomes research will save us money is that more than twenty years of outstanding outcomes research, Dartmouth for example, has not kept our health care costs under control.” Outcomes research is important; it is imperative for physicians to prescribe cost effective treatment. However, I agree with Laszewski that if financial incentives are not aligned to promote physician use of evidence-based medicine, then health outcomes research will have little impact.
- P4P: Laszewski doesn’t like pay-for-performance because in order for it to save money, it must lead to a reduction in physician payment on average. Another reason why P4P won’t work is that paying individuals to check a diabetic’s A1C level may increase the frequency the physician monitors this metric, but it also may compel the physician to substitute their time away from other necessary medical services.
- Universal Coverage. Universal coverage should reduce the percentage of individual who go to the emergency room for primary care needs;. Nevertheless, providing universal health insurance coverage will certainly increase healthcare spending due to the moral hazard problem as well as supplier-induced demand.