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Putting brakes on runaway health care costs
Written by Ardena L. Flippin, MD, MBA   
Barack Obama’s Plan For A Healthy America is comprehensive and ambitious. The Plan addresses universal health care, modernizing the U.S. Health care system and public health/disease presentation. Unfortunately his plan like many others does not give priority to the “c” words that no one wants to talk about: cost containment.

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Though everyone agrees that health care costs are spiraling out of control, actual strategies to contain these costs are buried in Mr. Obama’s Plan. 

Cost containment involves making tough decisions.

At its root, cost containment means ensuring that health care premiums are actually spent on the health care costs of medical technology and pharmaceuticals (which can also be considered technology).

Cost containment means designing and achieving measurable quality and efficiencies, and identifying groups and agencies that will be accountable (read not reimbursed) when those qualities and efficiencies are not achieved.

Mr. Obama is not alone in being vague about this pertinent issue, and he finds it much easier to tout his design that ensures various means of coverage for uninsured, underinsured and children rather than suggest that the time has come to research and identify where and how to lower health care costs.

The question is not where are we spending too little, but rather where are we spending too much?

The Obama Plan alludes to containing costs by redesigning our health system using health information technology to improve efficiency, and points out that a significant portion of health care dollars (30%) do not contribute to patient outcomes.

The Plan doesn’t emphasize that our failure to identify runaway costs is the basis for failure to solve the health care cost dilemma.

An impressive graph from the Kaiser Family Foundation (see "The Sad History of Health Care Cost Containment As Told In One Chart") demonstrates that certain events  have motivated decreases in health care spending. These events - Medicare/Medicaid, wage & price controls, voluntary efforts, and managed care & threat of health reform - produced the only four periods (1-2 years each) in which per-capita spending on health care decreased in the 40 years from 1961-2001.

This says that the health care “runaway train” is not an inevitability, and that we can change behaviors that need to be changed.

Importantly, though, the Kaiser Family Foundation analysis also says that we seem to be unable to sustain the behavioral change that will decrease health care spending.

According to Paul B Ginsburg, Ph.D., there are four basic options for slowing the trends in health care spending (Controlling Health Care Costs, NEJM 351:16, 2004):

  1. Increase the efficiency of health care delivery.
  2. Increase the financial incentives for patients to limit their use of medical services.
  3. Increase the administrative controls on the use of these services.
  4. Limit the resources available to the health care system.

What these four options describe is another word that we really don’t like to even think about, and that word is “rationing” - again, the Obama campaign is not alone in staying away from that word and concept.

All of the candidates quote statistics and lament the state of health care and the direction in which it is going. But none of the leadership candidates seem capable of admitting that the real issues involve hard and unpopular questions and answers.


The Sad History of Health Care Cost Containment As Told In One Chart, Health Affairs The Policy Journal of the Health Sphere, 23 January 2002.

Controlling Health Care Costs, NEJM, 351; 16, October 14, 2004.

About the Author

Health care cost containment
Ardena Flippin, MD, MBA

Dr. Flippin brings a wealth of experience, starting with her long tenure as an attending physician at the Cook County Hospital Emergency Department. She is currently Corporate Compliance and HIPAA Privacy Officer at major Chicago hospital.  

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