By How Much do Costs Need to be Reduced to Leverage True Health Transformation?
by Bobby Milstein, PhD, MPH
Proposals abound for improving regional health: some call for initiatives to enhance clinical care and reduce costs, some focus on payment reform, others combine clinical and population-level interventions, and many more. In this increasingly complicated environment, it is challenging to determine which interventions will have the greatest impact and how to finance them over time.
While there is broad agreement that we need to reduce clinical care costs and expand investments in population health, many leaders struggle to answer a practical, economic question: by how much would we have to reduce costs to have enough financial resources to invest in longer-term strategies that drive population health? Because this question is so central to advancing health transformation (not simply health improvement), my colleagues Jack Homer, Gary Hirsch, Elliott Fisher and I set out to see if we could generate some concrete answers using our ReThink Health Dynamics Model, which simulates a regional health system. (Read more)