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Thursday, October 14, 2010

How states can save money

Kate Blocher

Staff Writer

Everyone is feeling the strain during these tough economic times, but no more so than those in state and local governments. Many state governments have been in the midst of budget crises for far too long and are struggling to come up with new and innovative ways to get out of the red and into the black.

The Center for American Progress recently released an analysis, which shows that state governments have the potential to save $35 billion annually by the end of this decade and $149 billion annually by the end of the next decade by applying provisions in the Affordable Care Act and the HITECH provisions in the American Recovery and Reinvestment Act of 2009. These provisions give states the necessary tools to modernize their health care systems by giving them access to information on health care cost and quality. Using these tools, they can begin to reform their payment systems to reward low-cost, high-quality care instead of the current system where more care is considered better care.

How States Can Improve the Health Care System: Four Steps for Health Care Reform discusses how states should approach reforming their health care systems. Currently state and local governments spend about $300 billion a year on health care, and health care costs attribute to one-third of state budgets. Like a successful business needing to turn around a sub-performing division, states need to learn how to get better results from their health care systems.

According to the analysis, industries from across the spectrum have approached this process the same way: By knowing more, rewarding good work, and empowering their employees and customers. These same features can be applied to state and local health care systems to make them more efficient and in the long run more cost-effective.

The analysis lays out four steps state governments must take to begin to promote health care savings within their health care systems. These changes will not be easy, but the Affordable Care Act and the HITECH provisions within the American Recovery and Reinvestment Act of 2009 have laid the groundwork to make the transition much more feasible than it ever has been in the past.

Access to health care is not a privilege held by a few; it’s a right all of us share. However, states are struggling to reign in the costs of our ever expanding health care system. Luckily, with the groundwork laid out by the Affordable Care Act and the HITECH provisions within the American Recovery and Reinvestment Act of 2009 it looks like states can begin the necessary work to modernize their health care systems allowing them to improve quality while lowering costs – a great combination!