Health care costs could be cut by some $250 billion annually through the adoption of a five-step cost containment strategy, says the Health Insurance Association of America in a new report.
“There is a path to significant savings if we have the political will and the commitment of all parties in interest,” said Donald Young, president of the Washington-based HIAA, at a press briefing.
Everyone involved in the health care financing and delivery system, he said, including patients, providers, purchasers, payers and policymakers, has an essential role to play in getting health care costs back under control.
According to HIAA, reducing legislative and regulatory burdens on health insurance could save between $20 billion to $25 billion, annually. The report says cumbersome government regulation includes benefit mandates, onerous prompt payment rules and a wide range of administrative requirements.
In particular, HIAA says, some 1,400 state benefit mandates now exist, a 40-fold increase over the last several decades. These mandates, HIAA says, increase the cost of health care, making it disproportionately more expensive for small employers.
Mandates also stifle innovation and hinder the ability of insurers to respond to consumers, HIAA says.
Second, HIAA says, medical malpractice reform could save between $78 billion and $133 billion annually.
In addition to rising medical malpractice insurance rates, concerns about being sued permeate the practice of medicine today, HIAA says, encouraging defensive medicine. HIAA says a nationwide academic study found defensive medicine by itself costs $50 billion yearly.
Third, HIAA says, the nation could save up to $100 billion annually by increased development and dissemination of scientific medical standards and by independently evaluating the effectiveness of emerging technologies.
HIAA says that in the current information age, commonly accepted medical practice standards can become questionable or obsolete very quickly.