The Future of U.S. Health Care: Replace or Revise the Affordable Care Act?  | RAND

Health care Reform Part 2

Pre-Covid, health care reform was a huge concern for all Americans. Those in their 50s or 60s were some of the hardest hit by health care costs.  For so many, one severe illness could mean financial ruin or even bankruptcy.  Now in the age of Covid, 14 million have lost their jobs and have joined the millions of citizens who had no insurance before the pandemic.  Covid has exposed the inadequacies of America’s patched together health care system.  While the pandemic will create unimaginable debt for our country for many years to come, there are some sound strategies to achieve cost savings in health care.


1. Increase access to preventive care.

Preventive Care has been proven to drive health care costs down.   Medically indigent people use the emergency room for primary care because, without insurance, they cannot afford preventive care.   This practice clogs emergency rooms and drives up costs.  Treatment of chronic diseases accounts for 90% of health care costs.   Routine preventive care helps many people avoid hospitalization.  

2. Treat hospitals as last resort providers

Every procedure (mammography, MRI, x-rays, etc) performed in a hospital costs more than if it had been performed in an outpatient setting. Of every healthcare dollar spent in the United States, 33 cents go to hospitals. Another 20 cents go to physicians and clinics, while 27 cents pay for non-physician providers such as nurse practitioners, optometrists, chiropractor, and speech and occupational therapists. When hospital-owned physicians and clinics are taken-into-account, it’s fair to say that hospitals control more than half of all healthcare spending.


3.  Let Medicare negotiate prescription drug costs for consumers.

Many physicians are calling for allowing Medicare to negotiate prescription drugs for Americans 65 and older.  There is growing consensus negotiation may help cut drug costs.

4.  Lower the number of medical tests for patients.

Dr. Atul Gawande cites a 2015 study of more than 1 million Medicare patients, asking how often they received one of the 26 tests or treatments that were “widely recognized to be of no benefit or to, in fact, be of outright harm.” Up to 42% of patients received unnecessary tests in one year.

5. Switch to value-based healthcare.

End the health care system’s dominant fee-for-service payment practices (which reward providers for their quantity of services, not the quality or efficiency) and move to a patient-focused, cost-effective, value-based care (where providers are compensated based on effectiveness).   Value-based care that engages patients where they are is more cost effective and provides better outcomes.

6. Improve healthcare price transparency.

It’s not transparency around a list of a few hundred fee for service prices, but transparency around some bigger decisions or touchpoints that really matter to people: “Where should I go to get my primary care? What can I expect about the total cost that I’ll have to pay for that care and the quality that the people like me get? If I think I need a joint replacement or major procedure, what are the costs to me and what kind of outcomes can I expect?” Doctors need better prescription drug pricing information to provide more transparency to patients, giving doctors “cost-decision support” with information about other drugs that could provide similar outcomes, what they’ll cost the patient, and what the total savings cost would be.

There is also the political side to driving down healthcare costs.  In this next election we need to see We the patients, We the voters, taking it back.  Health care is about life and death.  It is time to transform our health care system and meet the needs of all Americans.  It is time to push politics aside and advance smart policy, not because it is Democratic or Republican but because it is the right thing to do.