How the Healthcare Industry is Trying to Reduce Patient Spending

As we mentioned in a recent blog, healthcare in the United States is very costly and continues to grow. National spending is about $3.3 trillion, a number that is projected to grow an average of 5.5 percent per year through 2026. Americans are estimated to spend more than $400,000 on healthcare in their lifetime.

Unfortunately, this high spending has a negative effect on a lot of U.S. residents. The following statistics highlight the problem:

• Multiple new studies show that Americans struggle with paying for patient care and the rising healthcare costs.
• Approximately 22 percent of Americans say themselves or a close family member have avoided healthcare services because of the cost.
• In 2017, 46.4 percent of people in fair or poor health were uninsured or had affordability issues while having healthcare coverage.

Provider Contributions

Two organizations working to reduce healthcare spending are the National Physicians Alliance (NPA) and MNHealthScores. Funded by the American Board of Internal Medicine Foundation, the NPA’s “Promoting Good Stewardship in Medicine” project created lists for primary care physicians in internal, family and pediatric medicine that detail what each can do to provide quality patient care while conserving healthcare resources.

MNHealthScores, a website developed by MN Community Measurement to “accelerate the improvement of health by publicly reporting healthcare information,” provides costs for various procedures. Its goal is to enable healthcare consumers in Minnesota and surrounding states to “compare and choose clinics based on quality, patient experience and cost ratings” and learn how to save money on their care.

There are a number of other ways the industry can achieve the same goal. Here are a few:

Elimination of Unnecessary Tests and Procedures

As noted in our Unnecessary Medical Treatment: Costly for Patients blog, the Congressional Budget Office estimates that up to 30 percent of the costs of medical care delivered in the U.S pays for unnecessary tests, procedures, doctor visits, hospital stays and other services. Surveyed physicians report that more than 20 percent of overall medical care is not needed, including 25 percent of tests, 22 percent of prescriptions and 11 percent of procedures.

The reasons most often given by physicians for overtreatment are fear of malpractice, patient pressure and difficulty accessing medical records. Despite these reasons, providers aim to reduce the number of unnecessary tests and procedures by ensuring processes and guidelines are in place to promote easy access to patient records and collaboration with others involved in the patient’s care.

Application of Technology

Electronic healthcare information is designed to help reduce the overall cost of healthcare and improve patient quality. According to an article in Healthcare Weekly, technology can help reduce healthcare costs with these five applications:

• Automate administrative tasks for more efficient use of physicians’ time
• Lower staffing costs with scheduling apps
• Reach more patients with targeted digital marketing
• Improve claims processing and collections
• Optimize the supply chain for value-based care

Patient Engagement and Education

Patients have shown a desire to become more involved in their care and more informed about their health. In addition to lower healthcare costs, research has linked higher levels of patient engagement to the following:

• Greater use of preventive care
• Less smoking and obesity
• Less delay in seeking care
• More positive ratings of relationships with providers
• Greater awareness of treatment guidelines
• Improved clinical indicators (e.g., cholesterol levels, triglycerides, depression)
• Reduced number of hospital and emergency visits and lower hospital readmission rates

Providers can also work to reduce healthcare costs for patients through a combination of population health management and the study of social determinants of health (SDOH), through which they can better mitigate higher costs. Many healthcare organizations in the United States are expanding their focus on SDOH and its effect on patient care, especially in the shift to value-based care.

It’s imperative for providers to begin a discussion with patients about specific costs of healthcare. When patients are more educated on unavoidable costs and options to reduce healthcare spending, they can make decisions accordingly instead of receiving a bill they might not be able to afford.

For more information on the latest hot topics in healthcare, subscribe to the AMR blog.