Rising health costs: A Harvard analysis


This is kind of wonky, but here goes. One of the links posted earlier this week was to a Harvard School of Public Health slide series on managing health care costs. It’s a great analysis from a medical and business perspective on why things cost so much and what actions might be taken to effect change, written by Jeff Levin-Scherz, MD MBA.

The slide reproduced below describes “non-intervenable” things, or stuff that won’t change: inflation will continue at some level, and the population of the U.S. will continue to age. Also, technology will advance, bringing new treatments that are probably more expensive and perhaps more effective.

But many things are “intervenable,” or could change: if prices were regulated, for example, some cost containment would be expected. There’s not been much appetite in this country for price regulation, though. If costs were shared more by the patient-consumer, some price variation might be expected (although it’s possible that the price would continue to go up, with more being borne by the patient-consumer).

Utilization looks ripe as a source of cost containment: Improved prevention? Specialist distribution, suggesting fewer pricey specialists competing for patients, and more primary-care providers making high-value but low-dollar medical decisions? Provider process redesign? Transparency? The last one is a favorite of ours.

Finally, we vote for administrative simplification: If you knew how many people look at a bill for anything other than a routine office visit, you’d be horrified.