NEJM: How to save $640 billion in healthcare costs

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If U.S. physicians adopted the practices of providers that deliver high-quality care at a cost 20 percent lower than the average, the country could save $640 billion in healthcare costs, according to a Perspective published online May 18 in New England Journal of Medicine.

Diffusing cost-effective care requires strong physician leadership and the translation of the Physician Charter, which commits physicians to “the wise and cost-effective management of limited clinical resources,” into practice, argued Victor R. Fuchs, PhD, and Arnold Milstein, MD, MPH, of Stanford University Medical Center in Stanford, Calif.

Fuchs and Milstein espoused two solutions to bending the cost curve: tax-supported universal coverage and disciplined managed competition among health insurers with national comparisons of providers. They admitted that neither reform option is politically palatable “without robust physician support,” and called on physicians to endorse “policies to accelerate diffusion of cost-effective care.”

The authors cited multiple barriers to more rapid dissemination of cost-effective care, including:

  • Opposition from insurers that claim standardization will bring additional costs without providing competitive advantages.
  • Employer resistance to using sponsorship of health insurance to spur competition among large health plans. Specifically, Fuchs and Milstein noted that 20 percent of large companies require employees to pay cost differentials between various health plans options, while 80 percent do not.
  • Public misunderstanding about who pays for healthcare.
  • Media emphasis on small, relative benefits of clinical interventions, which encourages patients to request expensive therapies or tests. “The public reflexively mistrusts any apparent withholding of widely touted diagnostic or therapeutic interventions, even when they might do more harm than good,” wrote Fuchs and Milstein.
  • Legislative malaise, stemming from politicians’ reliance on campaign contributions from health industry stakeholders.
  • Hospital administrators’ reluctance to trim occupancy and the related unwillingness to encourage providers to control costs.
  • Physicians are hesitant to embrace cost-effective strategies such as standardized care and outcome measurements or accept capitation or value-based remuneration payment models.
  • Academic health centers “rarely prioritize teaching cost-effective clinical practice,” wrote Fuchs and Milstein, inhibiting new physicians from learning such approaches.
  • Medical manufacturers’ preference for the profitable status quo, supported by heavy spending on federal lobbying.

Due to the public's trust in U.S. physicians, the editorialists said they are the "only plausible catalyst" of policies to accelerate diffusion of cost-effective care. However, they asked: "Are U.S. physicians sufficiently visionary, public-minded, and well led to respond to this national fiscal and ethical imperative? It’s a $640 billion question."