Increase in US healthcare costs should be no more than growth rate of economy, report says

BMJ 2013; 346 doi: (Published 14 January 2013) Cite this as: BMJ 2013;346:f233
  1. Bob Roehr
  1. 1Washington, DC

Major changes in the way healthcare is delivered and paid for in the United States can improve the quality of care, result in better outcomes, and generate savings of more than $2 trillion over the next decade, concludes a report from the Commonwealth Fund, released on 10 January.1

Problems had arisen from a fragmented healthcare system that was expensive and didn’t deliver high quality care, said David Blumenthal, the fund’s president. The report’s 10 recommendations fall into three broad categories, with the goal of reining in annual increases in healthcare spending to no greater than the rate of growth of gross domestic product.

The largest group of savings, $1.3 trillion (£0.8 trillion; €1 trillion), would come from reform of payments to providers, to promote value and accelerate innovation in healthcare delivery, said Cathy Schoen, the report’s senior author. But this would “rule out cuts in ineligibility or benefits that would simply shift costs to patients and their families,” she added.

Changes to Medicare and Medicaid would lead the way in this area, with a shift from reimbursement of fees for services to a greater emphasis on primary care and reliance on a primary care physician and a coordinator to provide a “medical home” (coordinated care). There would also be greater bundling of payments. These changes would also apply to patients who obtained insurance coverage through the state health insurance exchanges set up under the Affordable Care Act 2010.

Education of consumers and incentives to those making healthcare decisions to make high value choices would yield an additional $189m in savings.

“Streamlining and unifying practices” would save an estimated $481bn, Schoen said. Reporting forms would be standardized and simplified. Offering more comprehensive Medicare programs would eliminate the need to purchase supplemental policies, which carry a high administrative cost.

“The bulk of those savings would accrue to providers—doctors and hospitals—freeing up time and resources to care for patients,” she said.

Underpinning all this would be greater reliance on technology, including electronic health records. Schoen said, “When you pay differently, particularly emphasizing team care, information systems become critical, and they get used in an efficient and effective way because people want to avoid duplication—they want real time information.”

Organization and payment changes “are liberating for physicians,” said Blumenthal. “Bundled payments, pay for value . . . allow physicians to do things that are valuable,” rather than what is billable under reimbursement of fees for services.

A report earlier in the week by actuaries from the Center for Medicare and Medicaid Services noted that total healthcare spending in the US as a percentage of gross domestic product had held steady at around 18% for the past three years.2 The BMJ asked whether that might be because some of these recommendations were starting to be implemented.

Schoen thought that that might account for part of the stabilization in spending growth but also that “people have been cutting back in use” because of the recession. “As we come out of the recession some of the underlying factors are going to take hold,” she said, and she expected to see increased pressure on spending.

“Our rate of growth [in healthcare spending] still exceeds that of Europe, at least during the first two years of the recession,” Blumenthal added.

Most of the changes envisaged in the report will require Congressional action to allow for implementation. Blumenthal believed that the government’s fiscal pressures and a growing understanding that containing rises in healthcare costs must be a part of the solution had created a more favorable political environment for enacting these types of reform.


Cite this as: BMJ 2013;346:f233