Yale economists: These 1% steps can reform healthcare

A series of 1 percent solutions could collectively lower healthcare costs by hundreds of billions of dollars, according to an article published in Health Affairs

The article, written by Zack Cooper, PhD, an associate professor at the Yale School of Public Health in New Haven, Conn., and Fiona Scott Morton, PhD, the Theodore Nierenberg Professor of Economics at the Yale University School of Management, examined what incremental healthcare reform could look like.

"Rather than speaking about health spending via abstractions, we should view high U.S. health care costs as the result of a series of discrete problems that each incrementally raises health spending by a percent or two — so-called 'one percent problems,'" the authors wrote. "While each problem is unremarkable in isolation, the collective impact of a series of one percent problems can help explain why the U.S. spends more than other nations."

The authors said economists and policymakers should reframe healthcare spending as a series of 1 percent problems, and use those problems as a road map for cost reduction. They outlined 16 steps that, if implemented, would decrease overall annual healthcare spending by 8.87 percent.

Here are the 16 steps, ranked by their projected annual savings as a share of national health spending:

1. Regulating healthcare provider prices: 1.89 percent
2. Addressing surprise medical bills: 1.67 percent
3. Increasing the efficiency of claims adjudication: 1.25 percent
4. Addressing vertical integration of hospitals and physicians: 0.91 percent
5. Introducing smart provider networks: 0.83 percent
6. Addressing hospital consolidation: 0.69 percent
7. Improving health insurance plan choice: 0.63 percent
8. Improving plan auto-assignment in Medicaid managed care: 0.24 percent
9. Reforming how Medicare reimburses biosimilars: 0.21 percent
10. Addressing orphan drugs: 0.15 percent 
11. Reducing fraud in home health: 0.12 percent
12. Reforming the payments for long-term care hospitals: 0.11 percent
13. Decrease cost barriers for living kidney donations: 0.08 percent 
14. Expanding preferred pharmacy networks: 0.04 percent
15. Eliminating prescription copay coupons: 0.03 percent
16. Expanding kidney exchanges: 0.02 percent 

Read more here.

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