Modernizing the antiquated way healthcare is currently delivered will generate enough savings to pay for universal healthcare coverage for all Americans, according to Harvard economics professor David Cutler in the report Health System Modernization Will Reduce the Deficit. The report has been sent to Congress by the two groups sponsoring the research, the Center for American Progress and the Democratic Leadership Council. Cutler maintains that eliminating waste, lowering costs, and finding more efficient ways to provide care could increase productivity growth in healthcare by 1.5 to 2.0 percentage points annually. The savings in health spending to the U.S. government would be $600 billion over the next 10 years and $9 trillion over 25 years.
Cutler notes that the –0.2-percent productivity growth rate of healthcare is very low compared to industries like information technology, which has productivity growth of 5.7 percent. He says that medicine can adapt strategies from other industries to improve productivity, such as the efficiency management used by Wal-Mart. “Health care could reduce layers of back office personnel through the same type of billing system harmonization used in retail sales” and reassign tasks from physicians to nurses and physician assistants, he writes. And comparative effectiveness research could achieve the same reduction of waste and error that made Toyota legendary. “Health care modernization involves four broad steps: investing in infrastructure; measuring what is done and how well it is performed; rewarding high-value care, not just high-volume care; and realigning consumer incentives to encourage better health behavior,” says Cutler.
