News and Insights
Strategies for Competing on Value
With healthcare costs for America’s aging population projected to rise dramatically over the next several decades, the pressure for controlling them will become enormous. Consumer-directed healthcare plans (such as high-deductible plans linked to HSAs) represent one of the latest initiatives targeting cost management, but they weren’t the first (remember HMOs?) and they won’t be the last. Looming in the not-too-distant future is a battle over how to keep CMS solvent, with its projected deficit of $11.6 trillion (in today’s dollars) ensuring that all options remain on the table.
One of those options is the issuance of treatment guidelines based on some measure of cost-effectiveness, and it seems almost certain that such guidelines will form part of the solution. Physicians will continue to resist what they see as an intrusion on their prerogative to determine the course of care for their patients, but their position will be weakened over time as costs continue to rise — they do tend to decrease costs, and outcomes produced by guideline-oriented systems like the UK’s NHS are similar (at least at the level of the entire population) to those in the US. Further strengthening the payers’ hand is the evidence-based medicine
movement — guidelines won’t be based on the (presumably invalid) opinions of the insurers themselves, but rather on the (presumably valid) outcomes of research.
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