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World & Nation

Editorial:  Reality check: There’s no easy way to put a lid on healthcare costs

Emergency room waiting area
A mother and her son sit in the emergency room waiting area at the L.A. County-USC Medical Center in Los Angeles last year.
(Los Angeles Times)

Critics of the 2010 Affordable Care Act complain that it doesn’t do much to control the healthcare costs that are becoming unsustainable for families and businesses. In fact, the law does many small things; the latest is the grant program announced last week to teach Medicare and Medicaid doctors new ways to offer higher-quality, better-coordinated, more cost-effective care. The four-year goal is to turn $840 million in grants into $5 billion in savings — a number that sounds big until it’s compared with the nearly $4 trillion in annual healthcare spending in the United States. The modesty of the effort reflects the reality that there’s just no easy way to put a lid on healthcare costs.

The Congressional Budget Office projects that major federal health programs could cost 85% more in 10 years than they do today. That’s because multiple forces are driving up healthcare expenditures, including new technologies and medications, the prevalence of chronic disease, and payment systems that give doctors and hospitals incentives to perform ever-more procedures.

Those forces can’t be counteracted by simply slapping a limit on how much people spend on healthcare or how much doctors and hospitals charge. Such approaches would ration care, directly or indirectly. Instead, any effort to slow the growth in spending has to shift the incentives in the system so that doctors and patients alike are motivated to reduce the demand for care.

The 2010 law starts that process, but it’s no mean feat to change the economics of the healthcare system. Part of the challenge is figuring out how doctors can prosper by delivering better care at lower cost. The grant program announced Thursday, which is funded by the 2010 law, aims to identify those techniques and spread them to roughly 150,000 doctors across America. To guard against waste, the program requires grantees to set explicit numerical goals and track their progress. Such statistics won’t be the ultimate measure of the program or of the act’s other cost-control initiatives, however. It will be whether doctors fundamentally change the way they do business, so the savings continue after the federal dollars expire.

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