Broader, systems-level changes may help reduce healthcare costs

Many providers focus on high-cost patients when looking at ways to reduce growing healthcare costs, but taking a broader approach may be more effective.

This is especially true for those who are involved in alternative payment models, like accountable care organizations, said J. Michael McWilliams, M.D., a professor of health policy and medicine at Harvard Medical School, and Aaron L. Schwartz, Ph.D., a health economist at Harvard, in an article for the New England Journal of Medicine.

“The notion that focusing on high-cost patients is the key to reining in runaway spending encourages acceptance of expansive organizational structures that halt providers who are hesitant, with one foot dipped in payment reform and the other planted on the fee-for-service dock,” they wrote.

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Instead, McWilliams and Schwartz argued that broader, system-level changes can better facilitate cost reduction. Clinicians may not consider these options, though, because they’re so involved in the day-to-day of patient care that they may have narrow vision for what’s possible or may work.

The authors offered three reasons why a patient-centered approach to cost reduction may not be the most effective method to cut spending:

  • A focus on high-cost patients may not target truly wasteful spending
  • Investment in patient care is necessary to move certain innovations forward in a value-based care world, notably to improve care coordination
  • System-wide changes may have different cost structures, so honing in on a specific patient group won’t effectively drive change

McWilliams and Schwartz suggested a few examples of areas for cost-cutting that don’t involve a patient-centered view. As providers move toward a more coordinated approach, for instance, they could develop a clear, preferred network of specialists or e-consulting systems that reduce unneeded referrals, both options that would cut waste. Providers could adopt decision-support programs that reduce use of unneeded tests or prescriptions, or update their approach to triage to divert patients from emergency care to outpatient clinics.