Costs have been rising faster than inflation for decades with no end in sight, and payers, especially government and employers, which account for 45 percent and 21 percent of healthcare spending, are nearing the end of their ability to pay. In a recent survey by Oliver Wyman’s Health & Life Sciences practice, more than half of employers said they couldn’t continue to pay for health insurance for their employees even if medical inflation was cut by five percentage points—though they wanted to.
Some obvious steps can be taken to control costs and improve the quality of care. But most of them entail their own risks. Prevention, early treatment, and health management can help keep patients out of hospitals and emergency rooms. But too aggressive a transition to a new model could damage some facilities financially. New team-based and data-driven care models can improve the effectiveness and efficiency of care. But they call for training and skills that are not yet sufficiently available. Patient accountability can help introduce financial discipline into the system—or it might lead to massive resistance.
There are many great ideas out there on how to fix healthcare. But we need to do things the right way, in the right order, and with the right timing.