Question

Explain cost containment. Why is this an important concept to look at in health care? Identify one initiative in the U.S. health care system that is helping with cost containment.

please help I am having difficulty with understanding this question and how to answer it. thx

Answer 1

Ans) Health reform’s three major goals—insurance reform, affordable coverage, and slower cost growth—are all critical. But effective cost containment is key to achieving the other two. Health insurance that offers meaningful protection and is affordable hinges on getting ever-rising health costs under control.

- Opponents of health reform and cost containment enthusiasts continually criticize evolving health reform legislation as insufficiently aggressive in achieving the cost slowdown everyone knows is critical.

- Opponents are often downright misleading, claiming that the legislation is unaffordable, while ignoring official Congressional Budget Office documentation that the bill more than pays for itself—and actually reduces the deficit. Similarly, cost containment advocates place such particular emphasis on one aspect of the bill—the new tax on the most costly health insurance plans—that they’ve given short shrift to the legislation’s underlying emphasis on improving efficiency in the health care system.

- Improving efficiency, of course, is not a magic bullet. Effective implementation will require extraordinary public leadership and a commitment by the public and private sectors that surpasses anything we’ve previously seen. But if we’re really committed to cost containment, then it’s time to look at the legislation with a clear eye, enact the reforms, and provide the analytical and political support that will be sorely needed to make the law’s tools and authorities effective in the shortest possible time frame.

- No one disputes that the key to reform is to shift our health payment system from fee for service, which rewards the volume of medical services without regard to health outcomes or efficient, effective care. The first steps toward this goal are improving the current system’s fee structure. If current fees are set too high, as some are, then health care providers will continue to generate more income from highly compensated, inefficient care than from efficient and appropriate care. Any new incentives will have little impact.

- That’s why the health reform legislation now before Congress grants the Department of Health and Human Services the secretarial authority to review and alter “misvalued” fees without first requiring congressional action. Accompanied by specific deterrents to clearly undesirable behavior—such as hospital-acquired infections, inappropriate hospital readmissions, and, even more egregious, outright fraud—this new HHS authority mitigates the rewards for too much of the wrong kind of service that propel health care costs ever higher.

- Alongside this “stick” to change the behavior of health care providers is a set of essential “carrots,” or payment rewards for more effective and efficient care. At the most basic level, these rewards are extra payments to providers for doing “good” things—say, meeting a set of efficiency standards. But more importantly, these rewards reside in alternative payment mechanisms to replace fee-for-service payment with quality-driven payments such as “bundling” separate fees into a single payment for services associated with a specific condition, or providing extra payments for primary care and chronic care management in newly created “medical homes.”