Step 2: Creating a low-cost system

Step 2: Creating a low-cost system

Payers and policy makers also have an important role in the creation of low-cost systems.

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“There has often been a regrettable tendency among emerging health economies to copy some of the least effective elements of high-cost Western healthcare. Hospital dominated systems with sophisticated technology can seem attractive but tend to lead to very high costs without gains in outcomes and quality.”

- Lord Nigel Crisp, Chairman, All-Party Parliamentary Group on Global Health

Limiting prices and controlling costs by imposing high deductibles and co-pays can have some effect but to develop a successful low-cost system, some different strategies are needed. This assumes the basics of good governance are in place and there are reasonably well developed systems for regulation of professionals and organizations, provider payment and identifying and dealing with fraud.

We see opportunities in four main areas:

Coverage

Insurers and governments influence the cost of the system through the level of coverage options.

 
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Payer approaches to patients/subscribers

Payers and governments influence the behavior of patients and subscribers. Provide incentives, limit providers, preventative care, lifestyle, limits.

 
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Payer approaches to providers

The emergence of activist payers who demand better value and take action to shape the system to ensure they achieve low-cost, high-quality.

 
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Building a low-cost system

Hospital dominated systems tend to lead to very high costs. The best results come from thinking in terms of a low-cost system of care.

 
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Necessity: the mother of innovation

This report explores the challenges emerging health economies face in delivering high-quality, cost-effective care.

 
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