Altarum Research

Much of debate on health spending and system affordability focuses on high cost drugs and judgments about their benefits relative to costs. Traditional approaches to reduce spending often involve eroding coverage for care indiscriminately and fail to take a more holistic perspective on all sources of costs and value. Affordability is best achieved by more efficiently allocating costs across the entire budget and spectrum of care. Inefficient spending not only drives up costs, but can negatively impact patient outcomes and consumes resources that could be redirected towards underutilized, innovative care that offers higher value. These inefficiencies come in different forms:  

  • use of services with little or no added clinical value 

  • medical errors 

  • excessive administrative costs 

  • poorly managed disease 

  • poor care coordination 

  • slow adoption of efficiency-enhancing technology