Healthcare Technology Featured Article

May 22, 2013

Harvard Study: US Healthcare Spending Could Drop $770B over Next Decade


According to a study in the May issue of Health Affairs journal, healthcare spending in America could plunge by $770 billion over the next 10 years.

The study, released by two professors from Harvard University's Department of Economics, noted that healthcare spending in the U.S. has been slowing since 2000. The 2007-2009 recession accounted for 37 percent of the slowdown, while cuts to private insurance coverage and Medicare payments accounted for another 8 percent of the decline.

Another 55 percent of spending drops, says the study, remain unexplained. Study authors David M. Cutler and Nikhil R. Sahni speculate that a number of factors could account for the unspent funds.

"We conclude that a host of fundamental changes – including less rapid development of imaging technology and new pharmaceuticals, increased patient cost sharing, and greater provider efficiency – were responsible for the majority of the slowdown in spending growth," Cutler and Sahni wrote in Health Affairs.

One healthcare solution, cloud-based electronic payment portal Evolution1, has supposedly saved $2 billion for its customers and over nine million healthcare consumers. Providers use Evolution1 to administer reimbursement accounts, removing the complexity from decision-making while streamlining workflow.

The savings, according to the company, come from a variety of sources including lower tax liabilities, provider transparency and better utilization of healthcare. By trimming costs, more employers can continue to purchase coverage for their workers.

Additionally, Evolution1 saved its partners $80 million in administrative costs thanks to automated claim processing, service automation and innovative payment solutions.

"Amongst the constant change in the healthcare industry, one thing remains unwavering: our dedication to reducing costs and simplifying the business of healthcare," explained Jeff Young, chairman and CEO of Evolution1. "Day in and day out, we are helping consumers maximize their healthcare dollars."

The authors of the study point out that increased healthcare cost savings in the U.S. could mean fewer burdens on government budgets and increased wages and salaries funneled back to American workers. Because just over one-third of the spending cuts were attributed to the recession, Cutler and Sahni hypothesize that the lower costs could continue long-term.




Edited by Alisen Downey
Get stories like this delivered straight to your inbox. [Free eNews Subscription]




SHARE THIS ARTICLE



FREE eNewsletter

Click here to receive your targeted Healthcare Technology Community eNewsletter.
[Subscribe Now]