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Health costs: What works?

Posted: April 30, 2012 at 4:14 pm

Prepare for some health care policy wonkery. It looks like the state Senate is going to take up Gov. Patricks health care cost containment bill and an alternative, yet to be unveiled by Sen. Richard Moore.

The Times offered up some interesting context for this discussion in an article Sunday that cites real progress on health costs:

In 2009 and 2010, total nationwide health care spending grew less than 4 percent per year, the slowest annual pace in more than five decades, according to the latest numbers from the Centers for Medicaid and Medicare Services. After years of taking up a growing share of economic activity, health spending held steady in 2010, at 17.9 percent of the gross domestic product.

A lot of it is because of the recession: People lost their insurance, or chose not to seek health care to save money. Some of the savings is from people with higher deductibles and co-pays moderating their use of health care. But some of it appears to be from actions government, insurance companies and health care providers have taken to stop health care inflation everyone now realizes is unsustainable. The Times writer takes a deeper look at the things Boston Childrens Hospital:

All in all, the hospital made more than 100 changes and cut tens of millions of dollars in costs, Ms. Fenwick said. It not only reoriented itself to focus on quality, rather than quantity. It has started renegotiating its contracts with insurers to move away from fee-for-service medicine.

Most of the people in the Times piece are encouraged by what seems to be happening, but some are careful to note that its hard to yet exactly whats working and if it will continue, but theres a nice formulation that points out (as Ive long said) how important this effort is on many fronts:

If the growth in Medicare were to come down to a rate of only 1 percentage point a year faster than the economys growth, the projected long-term deficit would fall by more than one-third.

Of special interest is how the expansion of accountable care organizations bend the cost curve. That part of it that which replaces fee-for-service will probably be at the heart of the debate over Massachusetts next act of health reform leadership.

Read the rest here:
Health costs: What works?

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