Why Healthcare Costs Don’t Need to Continue to Rise

Three trends are converging to bring down healthcare costs: price transparency, adoption of Electronic Healthcare Records and mobile technology.

According to Bernard Tyson, CEO of Kaiser, capitation encourages cost reduction with no drop off in care. The Kaiser way does not involve price transparency for patients other than their monthly insurance cost. Kaiser keeps costs down by reducing hospitals stays and concentrating on wellness rather than sickness. Kaiser was a very early adopter of Electronic Health Records.

Still, price tranparency is having an impact on the cost of expensive diagnostic procedures like MRIs according to an article recently published in Health Affairs.

David Blumenthal explains why physicians have been slow to adopt Electronic Health Records while Eric Topol is promoting the use of cell phones, not only to make communication between physicians and their patients faster and more efficient but also to facilitate actual lab tests and other diagnostics like X-rays. 

Increased usage of price transparency, electronic records and technology are already having an impact on the cost of healthcare.  But these are all within the fee-for-service delivery model as opposed to the Kaiser capitation model. At this point, I like Kaiser's chances of becoming the dominant delivery model.