Observations on Managing Health Care Costs

I've been finishing up lectures for the final classes in a health care management program over the last week- and so I'm behind on blogging.  I'll do some catching up this coming week.

In the meantime, I've posted the final slides from the Fall course, Managing Health Care Costs, at Harvard School of Public Health.  Here are my eighteen observations - the slides contain substantially more detail.

Observation One: Sick people are expensive to care for!

Observation Two: The problem in the US is cost per unit, NOT utilization

Observation Three: We are too sedentary, too fat, and smoke less than we used to, but still too much.

Observation Four: We don’t like to make tradeoffs!

Observation Five: There is HUGE Variation

Observation Six: Fee for service is toxic (but everything else is difficult)

Observation Seven : There is a cultural clash between those seeking to preserve the “art” of medicine, and those looking to create more reliability and cost effectiveness through industrial redesign

Observation Eight: We pay a heavy economic and noneconomic price in our effort to banish uncertainty

Observation Nine: We often promote competition that does not generate new value for patients, and reject competition that could create such new value.

Observation Ten: We “medicalize” many conditions, driving up cost
Observation Eleven: Many see a primary care shortage

Observation Twelve: We are reluctant to regulate prices (and when we do, we often do it poorly by design)

Observation Thirteen: Providers must consolidate to allow for more integrated payment; however, provider consolidation increases the cost per unit

Observation Fourteen: We often mistakenly think that we can measure the cost of health care by medical claims alone

Observation Fifteen: You can’t ‘reform’ an industry representing 17% of the GDP without angering many, and without unintended consequences

Observation Sixteen: Americans will pay for a larger portion of their health care out of pocket over the coming years, and this is likely to lower utilization

Observation Seventeen: Physicians are more likely to prescribe treatment associated with high margins for their practices

Observation Eighteen: There are no magic bullets

1/14/12 Addendum:  Here's the OECD list of out of pocket payments.  Remember that the total cost of health care is so much higher in the US than elsewhere that a lower percent of health care spending still means a higher portion of personal income.  Thanks to Vegncook for comments.
Click on image to enlarge. Source