No. of Recommendations: 2
The simplest and easiest way to cut our spending a bit would be to have slight pressure on what government pays for health care services, such as Medicare and Medicaid reimbursement rates. Most of our health care spending, and the overwhelming majority of insured health care spending, is done in government programs. In 2023 (most recent data), total health care expenditures within insurance programs were about $3.6 trillion - of which about $2.1 trillion was government health insurance programs (including direct care like the VA), compared to only $1.4 trillion in private health insurance.
That's one way, but would likely cause more problems that it would solve.
If you really want to cut medical spending, then there has to be a functioning market with 100% price transparency...forcing health care providers to compete for patients' business. What we have right now is the exact opposite of that.
I've been banging this drum for years. Finally it's getting some notice:
https://www.ajronline.org/doi/10.2214/AJR.22.27326Price Transparency
Medical care in the United States is an opaque marketplace in which the price is often unknown to both the consumer (patient) and provider (physician or facility) at the time of service. In radiology, prices and reimbursement rates vary for the same examination, even in the same hospital, across payers [61, 62]. ...which is ridiculous. The price for a service should be the price for a service. HOW someone pays is step #2.
In the first Trump administration, he issued guidelines on price transparency:
Since January 2021, CMS has required that hospitals make public—in an online single digital file in a machine-readable format—their gross and payer-specific negotiated rates, deidentified minimum and maximum negotiated rates, and discounted cash prices for all services [63]. The goals are to allow patients to shop for lower-cost care and to encourage high-cost systems to lower prices [64, 65].The authors note some problems...
Even well-intentioned transparency tools may not be effective in altering patient behavior for numerous reasons, including low health care financial literacy, lack of quality measures, missing or variable Current Procedural Terminology codes for describing imaging services, a focus on charges and negotiated prices as opposed to patient-specific out-of-pocket costs, and a lack of financial incentives for patients [70, 75–77]. ...but these are easily solved as the insurers themselves will provide incentives for patients to educate themselves on pricing. Just as they have for prescription drugs.
