Why are healthcare costs out of control?

Each year, 5,000 babies are born at Broward Health facilities. For new parents, we offer a "Babytalk" series that discusses infant development. Parents arrive at these sessions loaded with questions. They want to know what the best, but most affordable, car seat is.

Raising a child is expensive – about $250,000 without college tuition – and over the next 18 years these parents will face many "cost-benefit" choices. Whether it's a decision about a crib or college, they'll make detailed comparisons to arrive at the best – and most fiscally sound – option for their child.

Hospital administrators face a similar struggle. Like parents, we must also determine how to manage daunting and growing costs without sacrificing the care and safety of those who depend on us. The temptation is to cut expenses – and we certainly face significant pressure from insurers and government to make cuts – but like a loving parent anxious about long-term outcomes, we can't be indiscriminate. We certainly can't use hatchets, but scalpels are also insufficient. We need the steadiness and precision of a neurosurgeon.

Unfortunately, there's much that goes into the price of medical care that we can't control. To address those costs, we must rely on policymakers.

First, there's the cost of innovation. The United States spends more on healthcare than other nations because we innovate more, and innovation is expensive. According to a 2014 Tufts Center for the Study of Drug Development report, it costs $2.6 billion to bring a drug to market. Life-saving and sustaining drugs save future healthcare dollars, so we can't cut R&D, but we can improve the process. The RAND Corporation has offered some ideas, including expediting FDA reviews and reforming Medicare payment and coverage policies.

Next, there's the high price of defensive medicine. A 2014 Harvard School of Public Health study estimated medical malpractice issues total 2.4 percent of U.S. healthcare expenditures. The study's authors noted medical malpractice reform won't fully address the high price of healthcare, but that these costs are not "trivial" either. Our policymakers can't ignore them.

Policymakers should also revisit prescription drug advertising regulations. I'm a strong defender of the drug industry's right to generate profits – profits that can be poured back into R&D – but over-advertisement encourages consumers to make an appointment with their physician to pursue products that might not work for them. This "drug experimentation" drives up costs.

Fourth, lawmakers must improve private insurer and government reimbursement policies. Privately-insured patients are 32 percent of the typical hospital's patient volume, but insurance company reimbursement policies vary widely. For example, in an effort to appease shareholders and keep money in their pockets for as long as possible, some healthcare insurers draw out the reimbursement process. This problem, combined with Medicare and Medicaid underpayments totaling $51 billion, severely inhibits practitioners' ability to provide safe, quality medical care.

Next, we must address how uninsured and underinsured populations access medical care. American hospitals have provided more than $459 billion in uncompensated care since 2000. A good portion of these costs come directly from hospital ERs, and despite the fact the Affordable Care Act has reduced the number of uninsured, today more patients are using the ER as their primary care doctor. According to the Advisory Board, patient education, financial incentives and managed care interventions are the best ways to address ER overuse, but policymakers must also continue to evaluate how our current system encourages unnecessary visits.

Finally, our medical provider shortage also contributes to higher hospital costs. A University of Virginia study estimated reforms to increase the number of international medical graduates who practice in the United States would reduce the number of preventable hospitalizations and save an estimated $37.4 billion over six years. It's time we discuss real solutions to our provider shortage.

According to the Office of Economic and Demographic Research, Florida's healthcare costs will rise 5.3 percent this year. This pace is well above inflation and is unsustainable.

Providers, patients and policymakers must work together to address this issue. We should remember that Consumer Reports doesn't evaluate the best car seats without consulting safety experts. The magazine also determines ease of use – in other words, what is the safest seat, but also the one parents are most likely to use and use correctly.

Healthcare policymakers must design a similarly inclusive process. A patient-centric approach that doesn't encourage indiscriminate provider cuts and includes consumers concerned about their ability to pay for care and clinicians who know how to balance budgets without sacrificing safety and quality, is the only intellectually honest path forward.

The mission of Broward Health is to provide quality health care to the people we serve and support the needs of all physicians and employees.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.​

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