Cost Savings

There are potential savings to be found in the current health care system, especially in producing and using better information. Using projections offered by the Commonwealth Fund, it is estimated that there will be savings of $88 billion dollars over 10 years by using health information technology. Practicing evidence-based medicine would save $368 billion dollars over the same period. Promoting health and disease prevention could reduce obesity, saving $283 billion dollars. It could reduce tobacco use, saving $191 billion dollars, and positive incentives for health could save $9 billion dollars, all in 10 years. That means there is a projected $939 billion dollar savings to be gained in only the first 10 years of the program by using better information.

Aligning incentives with quality and efficiency by initiating hospital pay-for-performance principles would save a projected $34 billion dollars over 10 years. By simply strengthening primary care and care coordination, we project a savings of $194 billion over 10 years. By eliminating federal tax exemptions for premium contributions when CAUSE is enacted will bring a savings of $200 billion per year. This is a $228 billion dollar savings in 10 years, plus $200 billion each year. By correcting price signals in the health care market, we could save money in another area. Resetting benchmarks for Medicare Advantage would save $50 billion over 10 years. By negotiating prescription drug prices, we could potentially save $43 billion to $100 billion over 10 years. Lastly, limiting payment updates in high-cost areas could save $158 billion over 10 years. Altogether, the proposed reforms can result in savings of about $2 trillion dollars by improving national health status, reducing administrative costs, aligning incentives, and fixing price signals in the healthcare market.