Policymakers call for large-scale spending targets to cut costs

To slow healthcare costs, the industry needs state spending targets, competitive bidding for all commodities and an accelerated move toward bundled and global payments, according to a spending strategy developed by 23 experts and published yesterday in the New England Journal of Medicine.

The group, assembled by the liberal think tank, Center for American Progress (CAP), included Ezekiel Emanuel, former Administrator of the Centers for Medicare & Medicaid Services Donald Berwick, former Director of the Office of Management and Budget Peter Orszag and CAP President Neera Tanden, according to an announcement.

As part of their 11 "large-scale solutions," they recommend creating a team of payers and providers tasked with setting spending targets and monitoring them.

They also focus on administrative costs that don't improve health status or outcomes, urging payers and providers to electronically share eligibility and claims information.

Successful cost-containment must involve complete price transparency, according to the authors, as it would enable consumers to choose lower-cost providers, which could prompt high-cost providers to reduce their prices.

The strategy also calls for empowering nonphysician providers, like advanced-practice nurses, to perform to the full extent of their training. Doing so would increase the workforce supply and, in turn, increase competition and lower prices, the authors noted.

Although some of the tactics might only hold up in blue states, other aspects like competitive bidding could appeal to more conservative states as well, noted Topher Spiro, CAP's managing director of health policy, Kaiser Health News reported.

Meanwhile, Massachusetts is putting its own cost-containment strategy into practice, passing the nation's first state cap on healthcare spending. The legislation aims to cut healthcare expenses by as much as $200 billion over the next 15 years.

To learn more:
- read the NEJM article
- read the CAP announcement
- here's the KHN article