A Guide To Healthcare Cost Containment 

Healthcare Cost Containment 

Healthcare Cost Containment 

Healthcare has been a major area of public spending in the US for years. The National Health Expenditure (NHE) is projected to cross $6.2 trillion by 2028. That’s a lot of money and is good enough to keep the entire population safe and healthy. However, many citizens are either under or not insured and don’t have access to healthcare facilities. Effective steps for healthcare cost containment are a way forward for optimum utilization of resources.

Here are a few guidelines that help in containing costs in healthcare and utilization of resources to yield better results:

Reduce wastage in healthcare spending

Healthcare facilities have not devised foolproof and effective means of reducing costs related to medical supplies. Hospitals waste a quarter of their spending on medical supplies every year.

Interestingly, the costs are rising because of over-projected consumption. Medical waste increases insurance premiums and conflicts with the goals of affordable medical care for every American.

If the reasons for rising costs are tackled, more people can be insured or access public health care facilities.

Here are a few steps that can help a healthcare facility check the wastage of medical supplies:

  • Don’t throw away unused and unexpired medical supplies whenever there is a change of vendor. Vendor management clauses to finish using medical merchandise at hand will be effective in this regard.
  • Increase accountability wherein clinicians have to periodically update and review the checklist of items required during a medical procedure.
  • Pharma companies have to produce medicines and vials that can be multiple times and eliminate wastage. A pharma company producing eyedrops discarded the proposal of micro drop packaging that helps in reducing wastage. The idea was rejected, for fear of losing sales

Value-based healthcare services

Healthcare can reduce costs on manpower and infrastructure by using telehealth services and remote patient monitoring devices that can monitor patients’ biometrics from the comfort of their houses. Without burdening the existing healthcare infrastructure, quality care can be provided through AI-driven solutions that facilitate hospital-at-home programs. Patient engagement improves with consistent monitoring and thereby cost-saving does not result in spinning-off quality.

Determine the cost per patient

Increasing the quality of patient care need not always mean only harnessing technology or providing different services. Healthcare service value can be increased by measuring patient outcomes and per-patient costs incurred for an entire cycle of patient care in complex patient treatment plans that involve multiple specialties and interventions.

When costs are measured at the per-unit level (here patient), variable overheads cost can be managed to reduce the overall cost.

There is also a myth that most healthcare costs are fixed and cannot be eliminated or reduced. This problem is the result of a bias or a narrative that old-school capitalists would like to stick to. There is a need to look at the holistic advantages of reducing costs for overall profitability gains.

When similar patient care is delivered at a lower cost to a patient, it improves patient engagement and experience levels.

Realignment of costs

It is seen that the best healthcare facilities are available in hospitals that are already crammed. These facilities are designed to offer treatments for complex cases. Care for less complex or regular patients can be moved to a different low-cost location by decentralizing the procedures.

Low-cost efficient skills matching

A skill-mapping audit should be carried out to match complex problems to be addressed by healthcare providers with complex skills. A low-cost but abled worker should replace high-cost human resources for functions that are simple but effective for healthcare. For instance, complex procedures like surgeries can be matched with the skills of doctors in a hospital. But for other regular practices like checking on the response of a patient to a treatment plan and preventive disease can be managed through a nurse practitioner.


Accurate costing will enable healthcare enablers in determining the exact cost per patient level. It will give insight into actual fixed overheads and costs that should be treated as a variable. When variable costs are reduced or better absorbed into a process, hospitals and clinics can devise a cost-reimbursement approach without decreasing the quality of patient care or the profitability of the place. Bending the cost curve is a process that should be used alongside technical upgradation to allow affordable care in the future.