The Bay Area Council, which represents more than 275 of the largest employers in the San Francisco Bay Area, today released a new report entitled “Roadmap to a High-Value Health System”. In the report, the Council lays out a four concrete steps policymakers can take to improve quality while lowering costs. The steps include:
1. Financially Rewarding High-Value Care
2. Building a Successful Health Benefit Exchange
3. Focusing on Health Outcomes
4. Effectively Engaging Consumers
The report also examines the reasons behind higher health care costs. Here are some critical lines:
- If we are interested in holding healthcare cost growth down, we must understand the factors that drive costs up.
- High healthcare costs are the result of the high price of healthcare.
- A McKinsey Global Institute report4 is one among many analyses showing that in the United States the answer is not primarily higher administrative costs. These costs account for only 7% of all healthcare spending in our country and explain only 14% of our excess spending as compared to the rest of the world.
- Costs are higher in the United States because we pay more for healthcare. We pay more for physician visits, hospitals stays, pharmaceuticals, medical devices and most other healthcare services.
- Controlling healthcare costs, therefore, will primarily involve paying less over time to some providers for some services and more over time to providers who deliver high-value care consistently.