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Health IT Key to $530 Billion Savings Opportunity for Health Care Reform, Says Report



January 16, 2009 By

Health care information technology; comparative effectiveness; coordination of care; and consumerism provide the opportunity to achieve a $530 billion savings opportunity based on a $220 billion upfront investment over three years.

As the White House changes guard next week, a new series of reports released today by the Deloitte Center for Health Solutions identifies $530 billion in opportunities to reduce costs while improving the U.S. health care system over the next 10 years.

"Against the backdrop of a national financial crisis and fierce competition for shrinking federal funds, transforming the health care system to address major cost, quality and access issues has never been more imperative," said Paul Keckley, Ph.D., executive director of the Deloitte Center for Health Solutions. "As unemployment rolls increase leading to an upturn in the uninsured, our analysis demonstrates encouraging potential for the new administration to make a significant impact on improving both the cost and quality of health care."

The Deloitte Center for Health Solutions, part of Deloitte LLP, reports provide a comprehensive understanding of what consumers want and need in their medical care, providing two important perspectives. The first, "Health Care and Public Policy: What Americans Want," offers results from a survey of 4,000 U.S. adults about their opinions of key health care reform efforts. Americans across the demographic spectrum embrace the gravity of the situation. A vast majority of respondents say they are ill-equipped to handle the financial burdens of a serious medical emergency -- only 6 percent describe themselves as fully ready for such a contingency, and less than 25 percent overall believe that their financial preparation is adequate. Families increasingly are so beset by medical costs that they have less to spend on other essentials. Many are falling behind in their medical payments; 84 percent of respondents believe that the economic challenges will now make it even harder for people to pay their medical bills.

The second report, "Reducing Costs While Improving Care in the U.S. Health System: The Health Reform Pyramid,"outlines the impact on investment and potential savings that might be realized by key reforms based on four interdependent areas of focus: health care information technology; comparative effectiveness; coordination of care; and consumerism. Taken together, these four areas provide the opportunity to achieve a $530 billion savings opportunity based on a $220 billion upfront investment over three years, with net savings realized beginning in year six. Thereafter, compound annual growth rate health costs may decline to 4 percent if implementation of the plan proceeds without delay, with adequate investment and proper oversight.

Additional findings from the Deloitte reports found:

  • Two in three respondents say health care is an important policy consideration in the new president's first term.
  • Only one in five gives the system an above-average report card grade, and more than half of respondents say 50 percent or more of the amount spent on health care in the United States is wasted.
  • Nearly 75 percent of respondents outright oppose or are lukewarm to tax increases to cover the uninsured, and 63 percent express concern about forcing individuals to have health insurance. Requiring employers to provide insurance for employees wins more support (53 percent are in favor). 
  • Asked if they would support the "medical home" -- the concept of assigning a primary care practitioner to coordinate care and referrals for an individual -- 73 percent express opposition or mixed feelings, likely due to concerns about protecting personal choice and uncertainty about how the process would work. 
  • Only four in 10 favor increased government funding and incentives to support adoption of electronic medical records by doctors, hospitals and health plans.
  • Seventy-seven percent favor improved benefits


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