As healthcare costs continue to rise, finding ways to make them more manageable is crucial. One approach to reducing these costs is by correcting perverse incentives and increasing deductibles. However, two healthcare initiatives that will be voted on June 9 offer potential solutions but both have fundamental weaknesses.
The premium relief initiative may provide relief to some premium payers, but it does not save money and ultimately shifts costs back to the taxpayer. On the other hand, the cost-cutting initiative could lead to effective savings but there is uncertainty about where the cuts will be made.
The real problem in healthcare costs lies in the increase in volume of services rather than the cost of individual services. To address this issue, measures need to be implemented that target misguided incentives at all levels, including patients, service providers, states, and manufacturers of medicines and medical devices.
One way to address this issue is by strengthening personal responsibility of insured individuals through adjusting deductibles based on income. Another way is by promoting efficient healthcare delivery models that reduce unnecessary services and procedures.
Additionally, addressing wrong incentives for service providers and streamlining administrative processes through digitalization can also help control costs. Although there are challenges in implementing these measures, it is important to find ways to exploit savings potential and set the right incentives in order to effectively control healthcare costs.
