Report: 8 ways to cut healthcare costs

stethoscope, coins and calculator
The center based the 24-page report on a recent forum that featured a panel of healthcare policy luminaries at the Texas Medical Center in Houston. (Getty/mckare)

The nation could cut wasteful healthcare spending by following a set of recommendations from leading health policy experts, according to a Texas think tank. 

The Texas Medical Center Health Policy Institute recently published a report (PDF) that features numerous and often radical ways the United States could trim its ever-increasing healthcare costs.

The center based the 24-page report on a recent forum that featured a panel of healthcare policy luminaries at the Texas Medical Center (TMC) in Houston. Among the participants were Mark McClellan, M.D., and Marilyn Tavenner, both former directors of the Centers for Medicare & Medicaid Services, and Frederick Isasi, executive director of Families USA.

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“There is no question that healthcare spending in this country has spiraled out of control, and it is affecting the day-to-day lives of the people that work hard to earn a living in this country,” TMC Executive Director Tim Garson, M.D., who served on the panel and wrote the report, said in an emailed announcement about the white paper. 

The TMC report proposes that the industry:

  • Eliminate fee-for-service payments entirely and move to value-based payments

  • Expand the use of cost-effectiveness for Medicare and other payers to make coverage decisions

  • Standardize quality-of-care metrics

  • Cut costs and improve care coordination by having more physician assistants, nurse practitioners and other allied healthcare professionals deliver care, a process known as “task-shifting.” For example, nurse practitioners bill at rates on average 29% below physicians for the same services.

  • Empower patients to be more responsible for their own healthcare through processes such as charging smokers and others engaged in unhealthy lifestyles considerably more for insurance. Physicians also need to better communicate personal responsibility issues at language levels patients can understand. “Leaders must learn to do better than simply providing patients with the right information," the report said. "They must provide the right information, in the right format, at the right time, through the right medium.”

  • Develop more specific processes to deliver care to patients at the end of their lives

  • Reduce emergency department visits for routine care, such as treating strep throat or other minor infections or injuries.

  • More forcefully address traumatic childhood experiences, which are linked to higher rates of morbidity and mortality in adulthood.

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Whether such radical changes could be made anytime soon is a matter for debate. More than 70% of physician revenue is still fee-for-service, and their powerful lobbies make that unlikely to change soon. Physician lobbies are also often opposed to expanding the scopes of practice for professionals such as nurse practitioners.

The TMC report cited data from another former CMS administrator, Donald Berwick, M.D., that $1 trillion a year is wasted on healthcare expenditures, particularly in the realm of overtreatment.

“We can lower healthcare costs for everyone if we work towards reducing that $1 trillion in waste,” the report said. “Doing so would have major implications on our country’s ability to provide healthcare for those who struggle to afford it. For example, two of the foundations of the Affordable Care Act—subsidies to insurance companies that make healthcare more affordable to Obamacare enrollees, and the expansion of Medicaid—cost the U.S. $110 billion in 2016. If we just cut overtreatment—doing too many things to patients that they don’t need—in half, we could pay for that.”