• linkedin
  • Increase Font
  • Sharebar

    Here’s how to reduce healthcare costs


    I.               Streamline the current manner in which providers bill insurance companies, Medicare, Medicaid or patients. It is a very convoluted and expensive system. To illustrate simply:  A $100 item is billed out between $1,500 and $2,000 or sometimes more. After months of back and forth and mountains of paperwork, consuming millions of hours of computer time, the bill is settled for $125.32, part of which is paid by the insurance carrier or Medicare and part of it by the patient’s co-pay or deductible. There is a simpler way. 

    President Bill Clinton once said that eliminating this mountain of paperwork could save 30% of the healthcare dollar. To be conservative, simplifying the medical billing system would save at least 20% of the healthcare dollar, bringing relief to both the payers and the providers...a win-win situation. The poor patients would be relieved.

    II.              The surge of hospitals charging very high “facility fees” has exacerbated the skyrocketing cost of healthcare. It is not uncommon that the facility fee is 5 to 10 times the fee charged by the doctor for an office visit, which does not require the use of an operating room, emergency room, intensive care unit or an admission for an overnight stay in the hospital.


    Further reading: Medicaid expansion must remain safe in healthcare reform


    III.            A certain percentage of non-cosmetic elective surgeries, not tests, may be unnecessary. This amount is considered enough not only to raise the cost of healthcare, but also causes pain and suffering, potential complications and absenteeism from work. I realize each surgeon believes that she or he does not perform such unnecessary surgery, it is the other guy. Medical Societies have started to produce evidence-based clinical guidelines to decrease unnecessary surgeries.  Introducing appropriate common sense, non-draconian “pay for value” instead of “pay for volume” reimbursement could be the first step to decrease healthcare costs, or perhaps, a hybrid of the two methods. At the same time, we need to diminish the cumbersome and unnecessary mandates imposed by the government such as Meaningful Use, MACRA and MIPS. As one national leader advocates, too much regulation stifles productivity. There is a simple way to achieve value.

    IV.             A pill produced by the same company is sold in the U.S. at a cost multiple times of the same pill sold in other countries. We understand fully that the cost of developing a new drug is prohibitive. Is there a solution for all parties if we all work together?  We should take a good look at the arduous process of developing a new drug. Will the application of a modified “favorite nation clause” help? We need Solomon’s wisdom to create a win-win for industry and patients.


    In case you missed it: Fight not over to preserve ideal patient care, says ACP


    V.              Expanding Medicare for younger and healthier people to buy into it will help to sustain and stabilize Medicare. We are not proposing free healthcare for all. As it is, Medicare has an adverse selection actuarially of its members. Insurance companies, expert on actuarial science, are needed at the table to decrease healthcare costs.

    VI.            Rather than allocating different budgets for Medicaid, block grants, debating whether it is federally or state funded, could we explore the mechanism for all licensed providers to donate a percentage of their time and resources to take care of the less privileged, the way it was done in the ‘50s and ‘60s? 

    Next: We are all patients, whether in the past, present or in the future

    KJ Lee MD FACS
    K. J. Lee, MD, FACS is Harvard educated and taught at Yale.


    You must be signed in to leave a comment. Registering is fast and free!

    All comments must follow the ModernMedicine Network community rules and terms of use, and will be moderated. ModernMedicine reserves the right to use the comments we receive, in whole or in part,in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

    • [email protected]
      This is one of the few articles that I have read on this subject that acknowledges that these bills are insurance bills and have little to do with actual health care. There is no one solution that is perfect, but you have outlined a number of good steps that would help. Unfortunately, the bills are written by lawyers, and have little input from the people it affects the most.
    • UBM User
      We are all bombarded daily with multiple news stories, correspondence from our medical societies, and editorials describing the "real" solutions to America's health care crisis. Unfortunately, these pundits either really don't have a clue or conveniently choose not to address the real problem and thus are completely off-base with potential solutions. This is the hard truth, from a front-line, solo, private-practice physician from "Mainstream, USA" who cares for the average Joe and Mary every day. The real problem in this country has everything to do with the amount of health care consumed, i.e., we have a consumption problem. Simply put, we require WAY too many health care resources. And Why??? Because we consume far too many calories, burn far too few calories - resulting in self-induced chronic illness and disease that, by far and away, IS THE MAJOR factor in American's health care crisis. Obesity and it's associated co-morbidities is, without a close second, the leading cause of medical expenditures in this country. We can argue whether access to quality health care is an American right - but it is a fact that one is NOT entitled to good health. That largely has to do with personal responsibility, hard work, discipline and making good health a priority. Unfortunately, the importance of these principles in today's society is fading dramatically. As long as the food industry is lining the pockets of the very people who have the ability to affect a change - and the drug companies, insurance giants, and large health care organizations are profiting hugely off the poor health of our country - change is not likely. It really is sad, but I firmly believe health in this country is in a rapid downward descent with no solution in sight. Who agrees? If not, how can this be disputed? 75% of adult Americans are either overweight or obese. At least 30 million Americans have type 2 diabetes. Guess what these numbers were a short 30 years ago? Has human physiology changed? I don't think so...
    • [email protected]
      I agree with what you are saying but one thing that no one seems to be considering is that when you add high costs patients to an insurance plan the shared costs of those patients most be born by other members of the plan. Unless there are a significant number of healthy patients the costs become unaffordable. In example I am a small businessperson who gets insurance for myself, my wife (both in our 50's) and a 25 year old daughter at a cost of over $2,000 a month. This is a plan with a $6,000 individual deductible and a $17,500 out of pocket maximum expense. In the federal employee plan a similar plan costs about $750 a month with a $500 individual deductible, and lower coinsurance rates. Why can't we open up the Federal Insurance Program to all who want to join it. This would raise federal employees rates but the numbers should help to offset the high costs of those currently in the ACA plans.

    Latest Tweets Follow