Institute on Health Care Costs and Solutions

Guiding Principles: Tracks One and Two

Track One: Pragmatic solutions to controlling costs based on best practices and ideas that can be implemented in the near term.

Track Two: Strategic and structural changes in the health care delivery system that potentially will change the health care cost/value equation in the long term.

Track Two is coming up with reforms that may take time to implement but once institutionalized will impact the perception and reality of what Americans get for a dollar spent. To improve the value equation, we need to either reduce the cost of the product we currently provide, or improve the product significantly (mortality, morbidity, productivity, access, convenience, etc.).

1. We must move quickly to reduce the rate of increase in health care costs in the US. This is a major and increasingly urgent priority for large employers and other purchasers.

2. Working together, as large employers, we can have a greater impact than we could if we operate alone.

3. The current business model in which consumers pay little of the costs and expect comprehensive health care with no limits or consideration of affordability is unsustainable.

4. We must test all ideas against a return-on-investment standard.

5. The quality of health care must also be improved, patient safety must be guaranteed, and avoidable medical errors must be eliminated.

Quality and patient safety improvements will reduce costs of care on a net basis and improve quality of life.

For the growing number of people whose lifestyle choices are seriously affecting their health, proposed solutions must recognize that some important aspects of health status are under an individual's control. There are no medications that will save people from bad choices. Solutions must include education about increased risk for very serious diseases such as Type 2 diabetes.

None of these objectives will be achievable without a serious and sustained effort to dramatically improve the technical and information infrastructure in the US. Delays in such investments waste money and hurt quality.

To improve quality and support a more consumer-driven system, solutions will have to include transparency by hospitals and major organizations in the health system. (Transparency must be based on standardized metrics and uniform-reporting systems.)

Any solution to the health care cost crisis must include employees, their dependents and other consumers of health care having a financial stake in their health care.

Since the U.S. health system will increasingly, both by choice and necessity, become a much more consumer-driven health system, effective solutions will have to take into account the American people's appetite for new technology, whether proven effective or not, and their desire for complete freedom of access to whatever they want.

Institute Objectives
Work Plan Objectives