Reducing healthcare costs a slow battle, experts say

stethoscope on money
Rising drug prices and the burdens placed on providers are among the major drivers of healthcare costs, experts say. (Getty/Maudib)

WASHINGTON, D.C.—The American healthcare system is expensive and inefficient, says Alice M. Rivlin, Ph.D., senior fellow in economic studies in the Center for Health Policy at the Brookings Institution. And although payment reforms and other programs could address high costs, there's still a lot of work to be done to get everyone on board.

“We’re not there yet,” Rivlin said. “And we won’t get there very quickly.”

RELATED: When it comes to healthcare, U.S. once again ranks last in quality of care compared to other wealthy nations

Rivlin was part of a panel discussion on Wednesday morning that focused on healthcare costs. She was joined by Richard Bankowitz, M.D., executive vice president of clinical affairs for America’s Health Insurance Plans; Katherine Hayes, director of health policy for the Bipartisan Policy Center; and Richard A. Deem, senior vice president for advocacy at the American Medical Association.

All four detailed key drivers of healthcare cost increases and what’s working—and what’s not—to address these issues. The panel was hosted by Bloomberg Government.

RELATED: 3 traits of good value-based payment programs

Advanced payment models and experiments from the Centers for Medicare and Medicaid Innovation (CMMI) are at the center of this debate, Hayes said, but many are too quick to declare such efforts a failure. What works in one region may not work in another, she said, as there is no “silver bullet” for healthcare reform.

“But don’t write off CMMI just yet,” she said.

Rivlin added that many APMs have been small-scale and complicated, requiring providers to do a lot of work for minimal financial gain. Bankowitz said that part of the issue, too, is that these models narrowly focus on payments without tackling delivery reform in tandem, when both should be looked at simultaneously.

Key cost drivers: Drug prices, administrative burdens

Deem said that providers face extremely high administrative costs, which can drive up costs of care while hindering quality improvement. He noted an AMA study that found doctors spend two hours on clerical work, including inputting data into electronic health records, for each hour spent treating patients.

EHR programs are often designed without the end user, the physician, in mind, making them “clunky” to use despite benefits, Deem said. If these programs fit a bit better into what doctors need, administrative costs would likely go down and it would improve data collecting and sharing.

RELATED: Regulatory burdens on physicians increase costs, hurt care quality, Johns Hopkins economist says

Two other major factors, according to the panel: a lack of emphasis on the social determinants of health and the rising cost of drugs. Bankowitz said that payers often see pharmaceutical costs that are higher than those for inpatient care and other physician reimbursements, and it’s “getting worse.”

Health reform efforts, he said, must be addressed beyond discount programs like 340B and should challenge how the system views costs and patents that give drugmakers monopolies over certain products.

Preventive care and programs that address patients’ social needs can also reduce the costs of care and keep them out of the hospital, though there are barriers to wider adoption. For one, many payers won’t cover things that aren’t directly related to care, and providers don’t necessarily view it as their job to help people outside of a hospital walls.

RELATED: AMIA sees internet access as a social determinant of health

But, Deem said, the chronic care burden can be eased when programs help patients secure safe housing, focus on nutrition and offer wellness guidelines. Preventing diabetes, for example, through promoting weight loss and nutrition is less expensive than caring for a patient who is diabetic or prediabetic.

Rivlin said an example of success in this area is treating children with asthma. Many successful interventions occur in the home, like sending staff to check for mold or effective air conditioning or training parents to make sure children follow medication guidelines, and can prevent costly emergency care visits.