Question

Many U.S. health care reforms focus on insurance coverage instead of the cost of providing health care. Provide a local or state solution (e.g., efficiency, public health programs, grant options) that addresses health care cost containment without modifying existing insurance programs

Answer 1

Introduction

World over, the cost of health care is increaasing considerably and countries are allocating huge sum in their budgets for the same. Effectiveness and sustainability are at stake. Policies for efficient use of health care related resources are to be formulated.  Strategies for health care cost containment have been discussed widely in many coutries world wide and certain countries in Europe have adopted certain strategies successfully. Those strategies are good guidelines for U.S. in formulating containment actions.

Strategies for Cost Containment

1. Shifting Budget

This can be done in two ways. Cost can be shifted from employment to household or to private insurer. This will reduce pressure on public finanace. Another strategy is to shift the cost to state level or local level from national level. This is done on administrative level and will reduce the spending at national level.

2. Reducing service coverage

Certain items can ne removed from the coverage of financial benefit and lover the coverage span. Benefits has to be precisely defined to avoid new interpretations and refuse the cases with low evidences. For example certain less effective medicines, detal care etc can be removed from benefits and this gives a large impact.

3. Coverage of cost

This strategy speaks about sharing a portion of expenses from the user. A well designed user fee system can make good impact on careless behaviour from the user and reduce public spending. A reasonable user fee can be collected from the user by putting a cap on total spending of a household. A specific percentage can be fixed on the income of household as the cap. Special cases can be exempted.

4. Activity based funding

By this strategy the payment can be routed to hospitals based on the diagonosis related activities. This avoids all peripheral activity inclusion and the spending will be more on essential activities related to diagonosis. This strategy can cut the cost effectively.

5. Provider payment

Here the providers are paid incentives for effective low cost medicines and services. A fee-for-service basis payment can also be considered. Performance based payment to practitioners for first time effectiveness is another strategy thought of. All thesse measures will eliminate waste and reduce the over all cost of health care.

6.Effective price control

By wide and thorough discussions Government can bring in price regulations by law for drugs, other health related hardware and health services to control the overall cost. This will reduce public spending. Using modern tecnology in increasing the evidence based practice will increase overall efficiency and accuracy of the decision making based on clear guidelines. This avoid spill overs.

Conclusion

Activity based funding will increase efficiency, quality, clarity and transparency. This inturn increases the service volume and reduce queuing time. Effective and thorough negotiation with pharma companies for cost, quality, rebates and cost is essential in over all cost control. The above mentioned steps being adopted by certain European nations can be tried in U S also.