So now the hard work comes- reducing costs.

First, let’s acknowledge the incredible victory in passing and then having confirmed by the Supreme Court the health care reform law.  It’s a great thing that millions will gain access to health insurance.

But this is only the beginning…

First, let’s face it, costs will rise in the short term.  With insurers covering millions who have previously gone without, many with pre-existing conditions, costs will rise.  The real challenge is in reducing costs, not so much of the insurance, but of the basic care services that the insurance must pay for- doctor visits, hospital stays and drugs.

The core problem underlying our runaway costs is that our system is designed, at nearly every stage, to deliver the highest cost service possible, and as many services as possible.  Reasons for this include:

  •             Fee for Service pay structure
  •             Defensive medicine and the fear of litigation
  •             Overcapacity of some service lines (supplier induced demand)
  •             A huge medical complex that can and does influence regulations

Until we focus on costs, and change key structural aspects of the health care industry to support a lower cost model, health care itself, whether accessed through insurance or not, will remain out of reach for many.

 

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