Two Approaches to Health Care Spending in NEJM
Wednesday, August 29, 2012

The debate on health care spending and cost cutting ideas continues in the New England Journal of Medicine (NEJM).  Earlier this month, NEJM published two articles, which discuss two different approaches to addressing the rising cost of health care in America.

The first article, “A Systematic Approach to Containing Health Care Spending,” was authored by 23 health policy experts, including Zeke Emanuel, Donald Berwick, Tom Daschle and Peter Orzag.  The authors put forward several ideas about how they would reduce health care costs over the coming years including, alternatives to fee-for-service Medicare, an expanded use of competitive bidding within the Medicare system, price transparency for health care costs, a greater emphasis on using non-physician providers, and evidence-based clinical practice guidelines reduce the cost of defensive medicine.

The second article, written by Joseph Antos, Mark Pauly, and Gail Wilensky, is called, “Bending the Cost Curve through Market-Based Incentives.” In this article, the authors suggest that insurance subsidies that would enable beneficiaries to purchase their own insurance (one option of which would be traditional Medicare) is the best path forward—allowing for a competitive marketplace with fewer regulatory controls.

So, what do the two sides have in common?  Both articles place blame on the fee-for-service model of Medicare payment suggesting that it leads to waste in the system as providers are encouraged to use more services.  Likewise, both groups of authors suggest some type of bundling for Medicare services and both seem to favor a wider use of competitive bidding across Medicare services.


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