Tuesday, November 12, 2013

The Cost Disease, Part 2

In an earlier post, I reviewed "The Cost Disease: Why Computers Get Cheaper and Health Care Doesn't" by William J. Baumol and others. I highly recommend the book, for reasons I set out in the in the review.

Those reasons mostly did not have to do with health care. So I wanted to point out a few of the suggestions Baumol makes in the chapter "Yes, We can Cut Health Care Costs Even if we Cannot  Control Their Growth Rate." The cost disease, as Baumol and company define it, relates to the rate of growth of costs. But we can still limit some costs - which will reduce the cost level. How do we do so? Here are Baumol's suggestions:
  1. Use statistical methods to improve the evaluation of medical treatments (Baumol offers several cautions, including ones I've discussed before - be aware of sampling errors, don't confuse correlation and causation).
  2. Avoid harmful or unnecessary treatments and procedures - he cites the rising C-section rate as one example.
  3. Increase the use of genetic information to guide medication and treatment.
  4. Identify less expensive treatments, new and old.
  5. Practice preventive medicine
  6. Make lifestyle changes - more exercise, consume fewer fats
  7. Reform the medical liability system.
  8. Make changes in medical education, and changes in health insurance practices.

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