Dean CoddingtonThere is perhaps no more important question for those concerned about federal deficits than bending the Medicare cost curve while, at the same time, maintaining quality of care and access. What is the potential for bending the curve, and where are the prime opportunities?

What drives high costs?  We have asked this question in speeches before healthcare groups over the past 20 years. We often use a list of factors compiled from articles and speeches by "experts" who in each instance were focused on the single most important factor driving healthcare costs.

One could easily write a paper on each of these cost drivers. For example, many physicians believe that unrealistic patient expectations are the main driver of increasing costs. With the expected implementation of the Affordable Care Act, there is concern over the supply of primary care physicians; newly covered patients may be forced to use more expensive alternatives, such as hospital emergency departments. The building boom in hospital and outpatient facilities (the only construction cranes in many communities these days) has people's attention as a cost driver.

Of course, it seems unlikely that any one of these factors-or other factors you might add-is the most important factor. What this list suggests is that there are multiple factors driving healthcare costs and, thus, there is no silver bullet. For example, one leading academic medical center in New England has identified 20 different areas it needs to attack to lower its costs. 

The key important questions remain to be answered: What are the most important drivers of healthcare costs? Are there some not on our list? And how should those listed be weighted? What should be the priorities?

 Coddington exhibit 120312

Dean is a senior consultant, McManis Consulting, Denver, and a member of HFMA's Colorado Chapter.

Publication Date: Monday, December 03, 2012