U.S. could save $2 trillion on health costs - study

WASHINGTON Thu Jan 10, 2013 11:05am IST

Paula, who asked to have her last name withheld, holds a membership card to the DC Health Care Alliance, as she is interviewed near the waiting room of the La Clinica Del Pueblo community health clinic in Washington, August 2, 2012. REUTERS/Gary Cameron/Files

Paula, who asked to have her last name withheld, holds a membership card to the DC Health Care Alliance, as she is interviewed near the waiting room of the La Clinica Del Pueblo community health clinic in Washington, August 2, 2012.

Credit: Reuters/Gary Cameron/Files

Related Topics

WASHINGTON (Reuters) - The United States could save $2 trillion in healthcare spending over the next decade, if the U.S. government used its influence in the public and private sectors to nudge soaring costs into line with economic growth, a study released on Thursday said.

Compiled by the nonpartisan Commonwealth Fund, the study recommends holding the $2.8 trillion U.S. healthcare system to an annual spending target by having Medicare, Medicaid, other government programs and private insurers encourage providers to accelerate adoption of more cost-effective care.

Such a plan would require new legislation from a bitterly divided U.S. Congress, where Republicans would likely oppose new government controls, despite claims by the study's authors that families, employers and government budgets would receive long-sought relief from their growing financial healthcare burdens if the changes were enacted.

But Commonwealth Fund President Dr. David Blumenthal, a former healthcare adviser to President Barack Obama, said the approach could find bipartisan support in upcoming deficit talks as an alternative to cutting so-called entitlement programs including Medicare, the popular healthcare program for the elderly and disabled.

"In comparison with what some of those proposals advocate, we think that some of what we're proposing will look like an escape valve," Blumenthal told reporters in a conference call.

The United States has the world's most expensive healthcare system, which government forecasters say will cost more than $9,200 this year for every man, woman and child. Spending growth has slowed in recent years, but costs continue to outpace inflation and restrain overall economic growth.

Despite the nation's massive healthcare bill, research shows that Americans die earlier and experience higher rates of disease than people in other countries - regardless of age, education, income, healthy behaviors or whether they have health insurance.

Obama has said he is willing to address the underlying rise in healthcare costs as a way to pare back spending on Medicare without resorting to deep cuts or fundamental changes.

Commonwealth Fund, a private foundation dedicated to improving the U.S. healthcare system, is one of a number of groups working to develop policy proposals at the federal and state levels as the country prepares for tens of millions of uninsured Americans to enter the healthcare system on January 1 next year, under Obama's healthcare reform law.

The study calls for the federal government to set gross domestic product per capita as a target for overall healthcare spending growth.

In 2007, before the current slump in growth, healthcare spending rose 7.6 percent, while GDP per capita gained only 4.1 percent, according to the U.S. Centers for Medicare and Medicaid Services.

The Commonwealth Fund study advocates accelerated acceptance of changes that are already taking place, including financial rewards for physicians and hospitals that participate in coordinated team-based treatment strategies.

It also would offer Medicare's 50 million beneficiaries a new plan with better protections against catastrophic illness and incentives aimed at better outcomes for lower costs rather than the current fee-for-service structure.

The study's authors said the plan would free up resources for physicians and hospitals by reducing administrative costs. It also would eliminate permanently a long-standing Medicare pay cut for physicians that Congress has repeatedly delayed.

Many of the innovations are experimental and unlikely to achieve savings that could be measured by the Congressional Budget Office.

But according to the Commonwealth Fund, the federal government would save $1 trillion on healthcare spending over 10 years as a result of its recommendations. State and local governments would save $242 billion, employers $189 billion and consumers $537 billion.

(Reporting by David Morgan; Editing by Tim Dobbyn)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared
Sensex up over 300 points on energy reform, elections

Sensex up over 300 points on energy reform, elections

The BSE Sensex surges over 300 points and the Nifty gains more than 100 points after the government's energy reforms lead to a rally in energy firms, while wins by Prime Minister Narendra Modi's party in two state elections raise expectations for additional reforms.  Full Article 

REUTERS SHOWCASE

State Elections

State Elections

Modi's BJP makes big gains in state polls.  Full Article 

POSCO Plant

POSCO Plant

India delays decision on iron ore licence for POSCO's $12 bln plant.  Full Article 

HCL Tech Results

HCL Tech Results

Quarterly profit up 32 percent, shares fall   Full Article 

Ebola Vaccine

Ebola Vaccine

GSK says Ebola vaccine development progressing at "unprecedented rate".  Full Article 

Health Check

Health Check

Credibility meets compromise in Europe's bank stress test.  Full Article 

Photo

Legal Reforms

Companies look for more fairness as China eyes legal reforms at key meeting.  Full Article 

Gold Smuggling

Gold Smuggling

With seizures up, Indian gold smuggling loses its shine  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage