Strategies, actions to cut costs
Biggest costs


Prioritize the order of biggest expense and payoff areas.
Automatize as much as possible
Educate but have reference easily and immediately available
Make people responsible for their exercising informed choice


Personal responsibililty of patient

For patients with high blood pressure, high cholesterol, and/or high weight, charge extra until they come down.
Have a health care refund for each company if health care costs are below a set %, half of the difference back to the patient.
If the cost is not affordable by the insured, then, for those who can work, the difference is charged to the personal loan account with the government. 

Reduce use of highest cost resources:

Use nurse advice, nurse practitioners, provide advice with a checklist and reading.

Communicate by email, give ability for patient to say ok for nurse or assistant.

Use remote communication by internet, so a doctor can be more places (where he doesn't "have to" see the patient in person).

Complete systematization of information resources

Checklists, instructions, and informational reading is standardized for easy use.
Video instruction for classes
Complete education system on overall health
Nurses available over the phone.

Order of effectiveness list/compilation for medical procedures, for drugs 

Most of costs in end of life.  Educate people much, much etter on the tradeoffs and effectivness or ineffectiveness.  Charge the costs to the person's estate, so that a decision has consequences. 

Reduce excessive tests and overtreatment, by changing Medical Liability Court Costs

Of course, an excessively high insurance cost for doctors against medical malpractice increases the cost of the physician who must pass on some of the cost.  But the greatest effect is the causation of 'defensive medicine' where excessive tests and unneeded treatments are recommended to protect themselves against lawsuits.  There are huge costs involved.  Cleaning this up will make a huge difference.

Tax items that have costly consequences, so cost is covered

People who smoke, besides paying higher health premiums, will have extremely high tobacco taxes
For example, the lifetime costs for smokers, despite their shorter lives, are higher than those for nonsmokers22,25 by approximately one third
No snack foods when on food stamps

Require health care directive (living will and end of life directives) or charge a tax of $500 each year not done and on file.

Require specification of organ donor permission or denial or charge a tax of $500 each year not done and on file.


Smoking and obesity overwhelm all of the other preventables.

For much of this century, the decrease in acute illness and the proportional increase in chronic disease have fueled inflation in medical costs


A White House statement supporting the bill, which awaits action in the Senate, echoed the argument by contending that tobacco use "accounts for over a $100 billion annually in financial costs to the economy."

However, smokers die some 10 years earlier than nonsmokers, according to the CDC, and those premature deaths provide a savings to Medicare, Social Security, private pensions and other programs.

A recent trend, the emergence of “retail clinics” in big box stores and drug chains, can be your budget’s friend, especially for routine care.  Going to the ER is almost always going to be the most expensive way that you can seek care, with the next most expensive being an urgent care, followed by a scheduled doctor’s appointment, followed by a retail clinic.  For common ailments – sore throats, ear infections – the retail clinic will probably suffice and will cost a fraction of the other alternatives.  If you need to see a doctor, scheduling an appointment (if it can wait) will likely cost half of what an ER visit would.

For example, if a healthy, 41-year-old woman raises her deductible from $500 to $1,500, she will save $1,428 per year. She could set the $1,428 aside and use it to cover the $1,000 difference, and still have money left over.
use independent agent

the Affordable Care Act already provides for the formation of health care choice compacts that would do just that, with interstate policies subject to some minimal regulation
Without the consumer protections afforded by the health care reform law, simply allowing insurance companies to sell policies across state lines would drive companies to states with the least consumer protection, allowing them to sell cheap, minimal policies to those who are young and healthy, but resulting in wildly expensive plans for those who need more comprehensive coverage.

If insurers can sell beyond state lines, the concern is that consumers would be attracted to the least comprehensive policies because they'd be cheapest.
group plans
As of 2008, your plan needs to have a deductible of at least $1,100 for you to open a Health Savings Account.

Component A = Size of the problem

Component B = Seriousness of the problem

Component C = Estimated effectiveness of the solution

Component D = PEARL factors (propriety, economic feasibility, acceptability, resource availability, legality)


a new national entity to evaluate and compare the safety, efficacy, and cost effectiveness of new and existing health care treatments and technologies, including prescription drugs and medical devices.” As part of a national strategy to improve safety and quality, AHIP said that work in “comparative effectiveness” should set “a national research agenda that addresses known gaps in evidence and makes communication regarding ongoing research studies a national priority.”

cost effectivenessresource allocation

have to educate in alternatives that will work, so people can do itl  incentives - measures of results.

extreme in disease life threatening

Reports documenting the resources wasted on medical procedures of questionable effectiveness are prompting industry leaders and policymakers to address these inefficiencies in the nation’s health care system with new urgency. In many cases, information about which treatments are most effective simply does not exist.

most significant measures of health 

Mechanism to identify future National Health

Priority Areas

• Identifying acceptable practice

• Identifying appropriate points of interventions

• Designing suitable indicators some value on priorities short as 6 minutes...time for rewiing the brain,solifies memories   from working memore to long term memory , processed remembered or not , putting it into units that are useful...constntly reconsolidating our learning to useful

simplifed undersandable health explanations

maximym hiring of privaate firms... government employess without rigorous education in business and/or statitica l analysis.


Public health is "the science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals"
Simple examples of preventive medicine include hand washing and immunizations. Preventive care may include examinations and screening tests tailored to an individual's age, health, and family history. For example, a person with a family history of certain cancers or other diseases would begin screening at an earlier age

Universal prevention addresses the entire population (national, local community, school, district) and aim to prevent or delay the abuse of alcohol, tobacco, and other drugs. All individuals, without screening, are provided with information and skills necessary to prevent the problem.
Selective prevention focuses on groups whose risk of developing problems of alcohol abuse or dependence is above average. The subgroups may be distinguished by characteristics such as age, gender, family history, or economic status. For example, drug campaigns in recreational settings.
Indicated prevention involves a screening process, and aims to identify individuals who exhibit early signs of substance abuse and other problem behaviours. Identifiers may include falling grades among students, known problem consumption or conduct disorders, alienation from parents, school, and positive peer groups etc.

Cause Number of deaths resulting (millions per year)
Hypertension 7.8
Smoking 5.0
High cholesterol 3.9
Malnutrition 3.8
Sexually transmitted infections 3.0
Poor diet 2.8
Overweight and obesity 2.5
Physical inactivity 2.0
Alcohol 1.9
Indoor air pollution from solid fuels 1.8
Unsafe water and poor sanitation 1.6
The delivery of modern health care depends on an expanding group of trained professionals coming together as an interdisciplinary team

The scope of health economics is neatly encapsulated by Alan William's "plumbing diagram"[12] dividing the discipline into eight distinct topics:

What influences health? (other than health care)
What is health and what is its value
The demand for health care
The supply of health care
Micro-economic evaluation at treatment level
Market equilibrium
Evaluation at whole system level; and,
Planning, budgeting and monitoring mechanisms.
In Grossman's model, the optimal level of investment in health occurs where the marginal cost of health capital is equal to the marginal benefit.

use behavioral incentives!
greater amount of nurse practitioner s for items not requiring docotr or where doctor can give inputs.

drive doctors out of the market

Economic equilibrium occurs in most industries when supply equals demand. Everyone is satisfied. However, in health care, equilibrium cannot occur. Demand in health care can never be satisfied. No country--none--can ever meet its population's need for medical services. Another person will always need treatment, after supply of goods and services is exhausted.

Because unlimited demand will always exceed limited supply, resources needed to treat some patients will be exhausted too quickly, leaving some patients without treatment. Nations must choose which resources to make available and how those will be utilized.

Among the seldom challenged axioms of U.S. health care policy are that the aging of the population will drive up health care costs, and that hospitals have too much capacity and need to shrink their operations.

good resource

if demand goes up, we've got to cut something
If 46 million more people are added to the demand side of the health care equation without optimistic productivity gains in the administration side, we likely will see a tradeoff between quantity and quality, particularly as it relates to rationing. Increased caseloads will no doubt reduce quality

A "market price" is lacking, i.e., no feedback mechanism exists that reflects the value of the resources used in health care.

v\coe\ver certin priority prevative items and give negative incentive to other factors.
Increasing Supply:

1. Increase the number of medical professionals. Unemployment among healthcare professionals remains near 1%, far lower than any other field. Increasing the number of medical, dental, and nursing school seats in the US will increase supply over time, creating more balance in the healthcare work force and driving down wage increases.

2. Shorten the length of medical school. Doctors in the UK and other countries finish their medical education in six years or less before going on to training programs (residency), while US doctors spend eight years between college and medical school. Accelerated six year medical programs exist in the US, and there is no evidence that their doctors’ education suffers as a result. Shortening medical, dental, and pharmaceutical programs to six years will increase the supply of practitioners, and decrease the starting salaries they demand since their schooling and debt burden are lower.

3. Doctors aren’t needed for routine healthcare. Nurse practicioners, midwives, pharmacists, and other medical providers can provide much of the routine care needed. National laws (or at least guidelines) making it easier for these practitioners to do their jobs will further increase the supply of qualified medical professionals, driving down prices.

4. Warranties on Medical Care. While pay for quality has been heavily discussed, it is quite difficult to measure and implement in practice. It’s far easier to require warranties on procedures, so that medical providers must provide care free of charge when issues as a result of mistakes during a procedure. Medicare could put this in place, incentivizing the industry to move towards higher quality.

Decreasing Demand:

1. Measure cost effectiveness of treatments within Medicare. As long as Medicare pays for healthcare by quantity, without any regard for cost-effectiveness, expensive and marginally effective treatments will continue to drive health care inflation. Patients should be given the option to pay for treatments that are not cost-effective, should they desire.

2. End employer health care tax deduction. As I’ve previously discussed, this $250B+ subsidy inflates demand, causing price increases for all, including those without insurance. Removing this subsidy would decrease health care spending by up to 10% [1], and could provide funding for other initiatives including universal health care or deficit reduction.

3. End tax breaks on medical goods and services. Sales taxes are generally not levied on healthcare products like the $285B pharmaceutical industry, providing them with a $20B subsidy relative to other goods [2]. Property taxes and income taxes are not collected on many not-for-profit hospitals, though some generate significant income and serve very few uninsured patients. Ending these subsidies would further reduce demand and prices.

4. Enact consistent end-of-life guidelines for Medicare. 27% of Medicare spending (almost $100B) is incurred for patients in their last year of life. While higher costs towards the end of life are expected, there are wide variations in spending in different regions of the US. Enacting a consistent set of guidelines which emphasizes palliative care would help decrease end-of-life healthcare demand.

avoid bubble - when extraoraindary price increases, intervene, see if

banks, some government guarantee  

These results are consistent with the fact that universal health care in Canada is viewed as more than a mere payment mechanism but rather reflects the larger societal values -- where health care is viewed as every individual's right and prudent use of services as every individual's responsibility

Self-Management Can Result in Savings
Multiple studies have demonstrated that providing medical consumers with information and guidelines about self-management can lower rates of use of services, often by 7 to 17 percent, in association with modest interventions37-41. These interventions offer objective guidelines to help a person decide whether medical assistance is required for a particular problem and provide information about home treatment when appropriate. They appear to work through two mechanisms: better information and increased confidence that much illness can be self-limited. Education that increases confidence about health decisions has been shown to reduce the costs of long-term health care, even in people with chronic disease

Seventy percent of people request no life-sustaining treatments for themselves when they are dying, and 89 percent desire living wills and other advance directives. Yet only 9 percent have made such directives
Health Promotion at Work Has Successfully Reduced Costs
A growing literature documents the potential of well-formulated health-promotion programs to decrease health care costs in the workplace38-41,52_69. Multiple studies of such programs have shown substantial decreases in the number of sick days,52-54,56,59,60,65,68,69 outpatient costs,52,57,58,61,64-66,68,69 and hospitalization costs




One of the most controversial parts of the new federal healthcare law is the redistribution of funding from Medicare to other programs. If Obamacare is left unchanged, it will take $500 billion from Medicare over the next 10 years.

Medicare beneficiaries will see higher premiums; doctors, nurses, hospitals and medical suppliers will get lower payments. The Medicare reductions will be used to subsidize expanded Medicaid to low-income recipients and to fund insurance for the uninsured.

For the 78 million baby boomers eligible for Medicare over the next decade, this is more than a redistribution of wealth. It is a redistribution of health and wellness. They will get less healthcare; others will get more.

Obamacare ignores Medicare’s biggest financial issue: the “doctor-fix.” Beginning this month, Medicare doctors face a 20 percent reduction in fees. On Jan. 1, 2011, doctors face another 6.5 percent reduction. The price tag to make a one-time permanent correction is about $250 billion.

But this is not about Obamacare. It’s about honesty

The Congressional Budget Office said Friday that rolling back a programmed cut in Medicare fees to doctors would cost $208 billion over 10 years. If added back to the health care overhaul bill, it would wipe out all the deficit reduction, leaving the legislation $59 billion in the red.

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allows for details