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Editorial: Cutting Health Costs Easier Said Than Done

A report from a panel of prominent health care experts identifies about $750 billion in annual savings the group claims could be achieved by adjusting current practices. The implication is that rooting out waste and fraud in a bloated system could mean deep cuts in the nation’s health care bill are possible without rationing and with better quality health care.

The Institute of Medicine report claims the health care system squanders about 30 cents of every medical dollar. It identifies six major areas of waste: unnecessary services ($210 billion annually), excess administrative costs ($190 billion), inefficient delivery of care ($130 billion), inflated prices ($105 billion), fraud ($75 billion), and prevention failures ($55 billion).

The report’s recommendations include payment reforms to reward quality results instead of reimbursing for each procedure; improving coordination among providers; leveraging technology to reinforce sound clinical decisions; and educating patients to become more savvy consumers.

The reforms will require action by all. For employers that could mean starting to demand more accountability from providers and perhaps from their employees by giving breaks to those who adopt healthy lifestyles; for doctors, it could mean more collaboration with peers; and for consumers, it might mean expecting to hear the word “no” more often to their demands for tests and services.


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Of course, the system needs to root out waste wherever it occurs, and the report provides a blueprint of where to start. But it won’t be easy for Americans who like to have what they want when they want it.

It will mean change. And anyone looking for an easy solution should look elsewhere.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.