Innovative strategies for reducing healthcare costs

WASHINGTON — The cost of healthcare in the U.S. is skyrocketing and employers and lawmakers must play a larger role to reduce the burden on Americans. So far, they aren’t doing enough, experts say.

The U.S. spent $3.6 trillion on healthcare in 2018 and that number is projected to reach nearly $6 trillion by 2027, the Centers for Medicare and Medicaid Services reported. About 30% of that spend is wasteful and could be reduced if adjustments are made to how healthcare is purchased and delivered, said Katy Spangler, principal at Spangler Strategies, a boutique consulting firm based in Washington.

“That is so much money,” she said, speaking at the National Association of Health Underwriters’ Capitol Conference on Monday. “We are not spending it effectively and efficiently.”

Reducing the amount of unnecessary care could lead to cost savings, Spangler said, noting vitamin D tests as an example. Those levels don't always have high clinical value but are regularly tested during routine blood work, she argued. Spangler said there needs to be policies in place that disincentivize care that provides little worth to patients.

“Vitamin D screenings were in a typical bundle of laboratory services that are already provided,” she said. “[It’s] talking directly to LabCorp and Quest Diagnostics, saying ‘take this off your bundle, it’s no longer needed.’”

In response, a spokesperson for Quest Diagnostics said the “company’s vitamin D testing is provided as an individual service and, in some cases, as part of guideline-based disease panels to streamline physician ordering and clinical assessment.”

Employers also need to be a bigger part of the conversation, Spangler said.

While large employers such as Walmart, Boeing, Intel and Google have been innovative with their health plans, it’s typically harder to get small companies on board, she said. Smaller employers may not have the time or the resources to deep dive into their healthcare spend.

Healthcare.Bloomberg.9.14.18.jpg
A medical doctor, right, examines a patient at a health center in Maryland, U.S. Photographer: Andrew Harrer/Bloomberg

New offerings like telemedicine and primary care house calls could help reduce costs by preventing expensive emergency room visits, she said. But this alone will not solve the problem.

“Technology is changing the way that we access healthcare, but I think there’s room for improvement in making it more intuitive in the benefit design and making it easier for employees to access these benefits,” she said.

Spangler also said employers can incentivize their workers to participate in shared decision making programs, which encourage employees to work hand-in-hand with doctors to determine the best route of care. This can sometimes lead to employees considering alternatives to expensive or invasive procedures, she said. For instance, if a doctor wants an employee to have orthopedic surgery, they may want to try physical therapy first before okaying the more invasive procedure, she said.

There also has been an increase in the number of employees who are participating in high deductible health plans and health savings accounts, which can help workers cover out of pocket costs, Spangler said. But HSAs were approved by Congress in 2003 and could use some updating. One change could include expanding the definition of preventive care to include chronic disease prevention.

“We think this could occur through the regulatory realm or legislative realm,” she said.

There also needs to be more transparency surrounding employer health plan data and better pricing information from CMS, she said. This would provide better insight into the cost of care.

While there are several potential solutions on the horizon — adoption from both lawmakers and employers has been slow. But it’s clear that something needs to be done about the high price of healthcare.

“These things are starting to gain traction, but it’s much slower than any of us would want,” she said.

For reprint and licensing requests for this article, click here.