Value-Based Care News

Top 3 Ways to Reduce Healthcare Spending Across Industry

There a few key takeaways from recent legislation and ongoing digital innovations that could make a real dent in rising healthcare costs.

By Vera Gruessner

- What new innovations and healthcare reforms are making a real benefit to cutting unnecessary healthcare spending associated with duplicative tests, hospital-acquired infections, and medical errors?

Bundled Payment System

While there are a wide number of transformations happening in the medical field, there a few key takeaways from recent legislation and ongoing digital innovations that could make a real dent in rising healthcare costs. Below we outline three ways in which healthcare spending could be reduced.

Adopt the bundled payment system

Currently, health insurers and payers are gaining significant cost savings due to the bundled payment system. This is especially true for more complicated forms of healthcare services such as cancer screening and treatment.

When it comes to bundled payments among breast and colon cancer treatment costs, one health payer found a 33 percent decrease in spending. Bundled payments seem to keep these costs low despite the fact that projected spending for cancer care was supposed to hit $207 billion in the next five years.

Additionally, the bundled payment system provides more flexibility and pushes forward care coordination in a way that aims to reduce the amount of time patients spend in an in-patient hospital setting.

Healthcare providers participating in bundled payment systems aim to cut hospital readmission rates, prevent disease like diabetes or heart failure, and end duplicative, unnecessary testing. All of these methods are meant to cut spending across the board.

Utilize new technologies and digital tools

With many policymakers focused on legislation like the Patient Protection and Affordable Care Act as a means to slashing costs, the real innovators that are making a difference in improving care and stabilizing hospital spending come from the technology space.

Experts from the Institute for Policy Innovation wrote about health IT, digital technologies, mHealth apps, and even telemedicine as methods for making a real difference in medical care.

Telemedicine, for example, can cut costs and increase flexibility by allowing doctors to meet with more patients remotely through virtual care means. This also expands care to those living in more rural locations and those unable to travel long distances to meet with medical specialists.

Reaching out through mobile devices is also an important way to engage patients. With at least 90 percent of people living with a mobile phone in the United States, it is an effective way for doctors to communicate quickly with their patient base.

It is expected that patient engagement can also help cut costs by having the patients themselves invest in adhering to their medications, coming to appointments, sticking to a healthy diet, and maintaining an exercise routine.

Certain mobile apps can also help individuals better track their health whether they are diagnosed with diabetes, heart disease, a neurological condition, or another medical issue. Some have even helped cut the number of emergency room visits and hospital admission rates.

“The innovation and competition that have been the hallmarks of the technology industry will help drive lower costs,” the authors from the Institute for Policy Innovation wrote. “In healthcare, once a drug or device is invented, it seems the prices only go up. In technology, once a product or software is invented, the prices only seem to go down. Fortunately, technology is driving this new healthcare revolution. Letting engineers and entrepreneurs invent and compete is the best way to change the old health system paradigm.”

Another type of technology that is making a big splash in reducing hospitalizations and slashing healthcare spending is the remote patient monitoring system. mHealthIntelligence.com interviewed Deb Harpin, Director of Admissions at Bedford Nursing & Rehabilitation Center (BNRC), this past spring to find out more about how remote monitoring reduces costs.

“Ultimately in everything we’re doing right now, we want to be able to provide the highest quality of care possible at the lowest cost,” Harpin explained.

“The remote monitoring coupled with the analytics platform gives us a powerful tool to lay a strong foundation for the focus of highest possible quality care at lowest cost for our residents,” Harpin continued.  “It gives us a lot more opportunity to manage both our short-term and long-term population that are admitted into the facility. We’re seeing a lot more with our chronic diseases, congestive heart failure, diabetes and the comorbidities that go with these conditions. The monitoring is allowing us to intervene earlier and ultimately prevent costly hospitalizations.”

Participate in long-term accountable care

While there has been talk about whether or not Accountable Care Organizations truly reduce medical spending, it is vital to realize that these programs have only been around for a few years and healthcare providers may need to invest in accountable care over the long-term in order to see true cost savings.

HealthPayerIntelligence.com recently interviewed Ted Schwab, ‎Managing Director at Huron Healthcare, to learn whether Accountable Care Organizations will make an impact on healthcare spending.

“I think that there has been some question to date because of the failure of Pioneer ACOs and the regular MSSP ACOs to show much cost savings but what folks have overlooked is that the ACO movement has been an organizing force throughout the healthcare industry and it’s got hospitals and doctors for once under the same umbrella talking about efficiencies, clinical protocols, and ways to save costs,” he explained.

“There are now north of 700 of these organizations in the United States of America. If you think about where the industry has been for the last 100 years, it’s been a mom-and-pop fragmented industry. Now you have 700 organizations with folks at least talking to each other. It’s going to take a while.”

“We’re at the very beginning of this movement and I could not be any more encouraged.”