Achieving Better Quality Healthcare by Lowering Cost of Care

Author of this study, David Squires says U.S. has a variable quality of healthcare. It is “better-than-average in cancer survival rates, average in-hospital mortality rates for heart attacks and stroke, and the worst in preventable deaths due to asthma and diabetes-related complications.” The basis of his analysis is data from the Organization for Economic Cooperation and Development and other sources.

Major Causes

Another Kaiser Blog piece states that nation’s efforts to control healthcare costs have not had significant long-term effect. “A major chunk of healthcare spending came from prescription drugs and new medical technologies. Longer lifespan and greater prevalence of chronic illnesses has placed tremendous demands on the healthcare system – as much as 75% of national health expenditure – according to an estimate. Administrative costs account for at least 7% of healthcare expenditures towards government health care programs. Creation of overhead costs and large profits out of the mixed public-private participation is cited as another reason that is fueling healthcare spending,” says the blog.

“The above-average use of diagnostic technologies seems to be the primary driver of cost,” writes Squires in his study. Factors like fee-for-service, the usual method of payment, is another cause that contributes to the high cost because practicing physicians are neither accountable for the number and the costs of resources used in diagnosing and treating a patient nor for costs generated by specialists to whom they refer a patient. In the field of healthcare, when there are no constraints for doing one more additional diagnostic test than what is necessary, costs are bound to gallop away without any specific advantage to the patient, observes Squires.

What Experts Think

“The best way to cut costs is to prevent illness which will build the practices of primary-care physicians and specialists who meet the system’s goals,” says Dr. Mitchell T. Rabkin and John S. Cook, two eminent healthcare professionals (Wall Street Journal, opinion column – 14th October, 2012). An effective step in their opinion is expansion of Medicare pilot programs which would assign accountability for cost, quality of care and patient satisfaction. They think success in Medicare pilot programs will encourage physicians to form groups’ thus generating competition both among groups and others outside it resulting in improved health monitoring. Among several valuable recommendations, Kaisereducation gives more stress to “greater government oversight and regulation of health insurance premiums and practices, increasing competition and price transparency in the sale of insurance policies through Health Insurance Exchanges” to check this malice to some extent.

The study by Squires shows that the large spending on Healthcare does not yield proportionate quality of care. It points towards the need to improve the value of what Americans pay for. And that is possible only through improving outcomes at all levels rather than volume, including rewarding providers.