By JANE SARASOHN-KAHN
The most telling point about health reform in President Obama's budget is that, "Some researchers
believe that healthcare costs could be reduced by a stunning 30 percent — or about $700 billion a year — without harming quality if we moved as a nation toward the proven and successful practices adopted by the lower-cost areas and hospitals."
That sentence gives us some grist for forecasting some of the elements of health reform — in particular, the last phrase which talks about moving from higher-cost, unproven health practices to lower-cost proven approaches.
In a post earlier this week, I talked about the importance of understanding practice variations, especially those behaviors that lead to increasing costs without improving health outcomes. Under the New England Journal of Medicine paper's scenario, all practitioners would be incentivized to behave as if they practiced in Salem, Oregon and not Miami, Florida.
What will it take to "move" medical practices? We can take a page out of Costco's playbook to answer this one. Three Costco tactics which keep the business resilient will be relevant to this scenario: standardization, deployment of information technology, and tough negotiations with suppliers.
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