Subscribe to our blog
Where Do the Savings Go When Waste is Removed?
Recently, I spoke on a panel at a NEHI (New England Health Institute) Roundtable Discussion in Washington, DC on bending the cost curve. NEHI had released a list of actions that could reduce costs by more than $700 million and improve quality of care. Their recommendations included reducing medication errors, reducing antibiotic use, improving patient medication adherence and increasing vaccine use. In a poignant moment, a member of the audience asked what will happen to the savings from these actions – who benefits?
The question brought to mind an article written by Troyen Brennan, MD, Executive Vice President and Chief Medical Officer of CVS/Caremark, and Christine Cassel, MD, CEO of the American Board of Internal Medicine and the ABIM Foundation, entitled “Managing Medical Resources: Return to the Commons?”. They put forth the case that physicians are more apt to be engaged in achieving savings when they believe there is an identified patient community of interest (e.g., prepaid group practices, accountable care organizations). They counter Norm Daniels’ argument that “the fee-for-service model does not allow physicians to affect where savings go, so why would they try to avoid cost with interventions in the name of helping other patients?”
So where do the savings go? My simple and maybe naive answer is that savings should go to the patients and consumers. If a test or procedure is not performed according to the best evidence, the patient immediately benefits by not paying for a copayment and coinsurance. When claims go down, most employers and employees will see that reflected in their premiums (particularly self-insured groups). When less is paid in premiums, wages of employees will not be adversely impacted and there will be more taxable income for cities, counties and states. Theoretically, that yields more money for things such as infrastructure, education and research. But somehow, I think this is beside the point.
For me, it’s less about where the savings go and more about a social imperative. How can we hesitate in removing waste from the system when it improves quality and potentially prevents harm of patients? We certainly need structural reform of the health care system but in the meantime, I can only hope professionalism will trump marketplace forces and doing what is in the best interest of patients will stop this insanity of overuse and unnecessary care.
Leave a Reply
Required fields are BOLD