How To Reduce Health Costs?

The United States of America must reform its health policies because its population affords health expenditures more than any other country. Health outcomes are suboptimal in the US because millions of Americans have limited access to ongoing primary and preventive care because they can’t afford most of the health insurance expenses.

How To Reduce Health Costs Image


1. Reduce Administrative Costs

The United States spends more than a third of its healthcare dollars on overhead and administration, including medical billing services, advertising, profits, and bonuses for healthcare executives.

Administrative costs in countries such as Canada that have a single-payer system, i.e., non-profit national health insurance, are relatively lesser than in the US. If their population had a single-payer instead of hundreds of insurers with thousands of different insurance plans, they would have saved 15% of their healthcare costs.

2. Focus On Preventive Care

We need to change our emphasis from disease management to disease prevention and health promotion. To improve our focus on disease prevention, we need more significant care physicians, family physicians, and general health care providers. It is often observed that generalists provide more cost-effective medical services than specialists, and their patients enjoy better health outcomes.

3. Eliminate Unnecessary Tests And Procedures

In addition to training a new staff of adult generalists with expertise in prevention, we must ensure that all physicians (specialists and generalists) practice cost-effective healthcare services. Now, physicians vary immensely in their use of expensive diagnostic tests and treatments. Many unnecessary tests are performed to prevent negligence suits.

We need to suspend or deny such practices in health care services for repeat offenders. Moreover, we need to increase research funding for healthcare projects that will help to determine which diagnostic tests and procedures actually benefit the relevant patients. This research will increase the number of evidence-based practice guidelines. 

4. Control The Costs Of Prescription Drugs

The US government must control the prices of prescription drugs as practiced by other nations. Drug companies charge arbitrarily for their products in the US. Citizens of other countries pay 20% to 40% less for prescription drugs than the population of America. Millions of Americans have chronic conditions that require life-long medical treatments.

If their insurance company doesn’t pay for them, or if they fall into Medicare‘s donut hole and cannot afford prescribed medical services, many patients discontinue their medical treatment. That raises the chance of increased emergency room visits and hospitalizations and a further increase in our health care costs.

5. Increase Competition Among Health Care Providers

Most of the physician practices have been consolidating, so there is a need for more healthcare facilities; therefore, the number of hospital constructions has been high. According to a recent study by two Federal Trade Commission economists, the medical charges of different health insurance companies have increased by up to 25% and 15%.

Gaynor estimated that almost 1,700 hospital unions have occurred over the past 20 years in the US. Most of the urban areas now have just one to three leading hospital systems. If hospitals have no local competition, then the charges for medical services would be 12.5% higher, on average. However, high competition leads to better-quality health care facilities.

6. Give Health Care Consumers More Authority

Most of the patients feel powerless while negotiating with the health care facilities and insurance companies for the charges of health care facilities. Patients and consumers need to opt for their limits and with their budgets for high-value plans and providers because that creates an incentive for insurance plans and providers to generate higher value.

Health Costs How Reduce Medical Cost


If you are interested in even more lifestyle-related articles and information from us here at Notilizer, then we have a lot to choose from.