Reducing health care costs: You can’t improve what you don’t measure

Aug. 16, 2021 / By L. Gordon Moore, MD

U.S. health care costs are too high and are continually getting worse. This is especially galling considering the ongoing decline in life expectancy, the low ranking of the U.S. compared to Organisation for Economic Co-operation and Development (OECD) countries on maternal mortality, infant mortality, chronic disease outcomes and more. Forty-four percent of Americans say they can’t afford needed care and 60 percent of bankruptcies are due to out-of-pocket medical costs.

This is in spite of the U.S. spending twice as much on health care per person than any other OECD country. We read news reports about people being charged more than $700,000 for neck surgery, and charges for a cesarean section range, for no discernible reason, from $6,000-$60,000 within one hospital.

Health care spending is such a drain on the economy that Warren Buffet called it the “…tapeworm of American economic competitiveness.”

No wonder more than 90 percent of CEOs said in a recent survey that they would welcome U.S. government intervention to address costs.

We might topple the entire system of private insurance and monopolistic health care delivery systems but that’s politically unlikely. A more likely pathway to improved health outcomes at lower cost can be achieved by setting reasonable payment rates, requiring that a greater proportion of health care spending go to primary care, and linking rate increases to GDP.

The complex work of adjusting payments based on the needs of people can be accomplished by using known methodologies.

It is possible then to set reasonable payment rates, adjust for academic medical education and other factors, to increase payment rates to public health and primary care so that we may reduce downstream suffering and expenses.

Christopher Koller is president of the Milbank Memorial Fund and past commissioner of insurance for the state of Rhode Island. He delves into these issues and more on the 3M Inside Angle podcast.

If we want different results, we must make different choices. We can choose to have better outcomes for people and populations that are more affordable and equitable.

Dr. Gordon Moore is Senior Medical Director, Clinical Strategy and Value-based Care for 3M Health Information Systems.

Providing an accurate, consistent measure to evaluate inpatient care.