NCPA - National Center for Policy Analysis


May 20, 2009

One week ago, health care executives trekked to the White House to say they would save $2 trillion over the next decade by curbing costs 1.5 percent a year.  Has the supply side of our health care economy stepped up with a plan to save the day, asks the Dallas Morning News?

"We've seen those promises before, under Nixon and Carter," says John C. Goodman, president and CEO of the National Center for Policy Analysis Goodman.  "It involves lots of people saying, 'We are not going to do things that are in our self-interest.' " 

Even so, Goodman argues health care providers offer the best hope for cutting costs:

  • Companies he calls "islands of excellence" such as the Geisinger Health System in Pennsylvania, Intermountain Healthcare in Utah and the Mayo Clinic system have found pathways to savings while delivering quality medical services.
  • Meanwhile, government programs like Medicare stifle such innovations and create incentives to maximize the cost of care.

Goodman advocates an overhaul of Medicare's payment system so that health care providers who can save the government money should share in those savings.  He would set three ground rules:

  • The providers would have to promise that their costs per patient would not increase.
  • The quality of service cannot go down.
  • And the providers would have to satisfy the government six months in advance that they have acceptable ways to measure costs and quality.

"Then, let them do it, but not by telling the doctors how to perform," says Goodman.

Source: Jim Landers, "Reducing retirees' health care costs may be up to you," Dallas Morning News, May 19, 2009.


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