Healthcare cost: Manage the causes, not the effect

If cost containment is the goal, then what should be the means to that end?

While price controls may seem like a solution, they are likely to further weigh down a healthcare system that is already heavy with perverse incentives. Instead, policy makers should consider the upstream causes that contribute to growing healthcare costs. Important cost drivers include the composition of the risk pool, unit cost, and utilization—with the latter offering the most promise for controlling cost. Evidence-based clinical guidelines can help inform a better approach to managing utilization, thereby ushering in a new era of improved quality and efficiency.