9 Ways to Curb Healthcare Costs

Tuesday, November 17th, 2009
This post was written by Melanie Matthews

While we wait for healthcare reform to clear its next legislative hurdle, the Business Roundtable, an association of CEOs of leading U.S. companies, identifies nine bolder aspects of healthcare reform that could slow the growth of healthcare costs and offer real savings for companies and their employees — by as much as $3,000 per employee in 2019. Their advice shouldn’t be taken lightly; as a group, Business Roundtable’s member companies employ more than 12 million employees, provide health coverage to more than 35 million Americans and report annual revenues of more than $5 trillion.

These top business leaders suggest nine reforms to the U.S. healthcare system that would help curb costs:

  1. Delivery system reforms, such as value-based purchasing;
  2. Innovation centers that identify alternative methods of provider reimbursement;
  3. Accountable care organizations that realign financial incentives to improve the quality and the value of the care delivered;
  4. Financial penalties for failing to avoid preventable hospital readmissions;
  5. Increased individual accountability for healthcare spending decisions, including health reimbursement arrangements and health savings accounts;
  6. Cost and quality of care data that is easier for patients and providers to access and use;
  7. Elimination of sharp regional variations in practice patterns;
  8. Promote wellness and prevention programs and expand financial incentives to participate in specific programs to reduce lifestyle-related illness; and
  9. Insurance market reforms that promote competition and choice.

A featured story in this week’s Healthcare Business Weekly Update provides an example of realigned financial incentives. Baptist Health System explains its rationale for participating in a CMS pilot of bundled payments, in which savings are shared with providers and patients.

Conversely, the Business Roundtable identified several conditions that could increase healthcare costs: delayed or watered-down
cost-saving efforts; failure to implement a strong individual mandate to minimize cost increases in health insurance exchange plans; increases in cost of healthcare to individuals from changes to consumer spending accounts or other actions that discourage consumer-engaged decision-making; and cost-shifting to the private sector.

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