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Small Ideas for Saving Big Health Care Dollars

Photo by Bet_Noire/iStock

Health care spending in the United States is 18 percent of GDP, so won't it take sweeping changes to rein it in? Experts say yes, but so far big proposals have encountered stiff political and organizational resistance. Until large-scale cost containment measures are adopted, what might happen if we started thinking small in order to save big?

Each small idea might generate minor savings, but total savings from many small ideas could be quite large. Using this approach, RAND analyzed small ideas that were described in 15 recent studies, estimating a potential cost savings of $16 to $26 billion in 2014 U.S. dollars. The studies we analyzed fell into two categories: substituting lower cost treatments and savings from implementing patient safety measures.

As new ideas are published, their estimated savings will be outlined on this site and added to the "savings account" and calculator below.

Latest Small Idea: Biosimilars

Biosimilars are biologics with highly similar molecular structures and equivalent safety and efficacy. In the last two years, the introduction of a handful of biosimilars to the pharmaceutical market increased competition and drove down the cost of some biologics. Continued introduction and use of biosimilars could reduce health care spending by $54 billion over the next decade. This estimate is 20 percent larger than a similar analysis RAND conducted three years ago, reflecting both improved analysis methods and rapid growth in spending for biologics overall.

As with the 14 initial small ideas, the team rated the political and operational feasibility of this new idea. They judged that increasing use of biosimilars has high political feasibility and medium operational feasibility. Use the calculator below to see how this and all the other cost-saving ideas impact the total.

Cost-Saving Ideas with estimated annual savings, 2014 U.S. dollars

Total Potential Savings $21B ($16B-$26B)

Savings from Substituting Lower-Cost Treatments

$17B Subtotal ($13B-$19B)

Savings from Implementing Patient Safety Measures

$4B Subtotal ($2.5B-$7.1B)

Prevent three types of health care-associated infections:

Total Potential Savings $21B ($16B-$26B)

* The midpoint of the range was used as the best estimate in the totals.

** Annual savings estimated to increase from $2.2 B in 2014 to $7.8 B in 2023.

NOTES: The savings estimates for each idea and the totals are rounded to two significant figures. A negative estimate indicates a net cost.

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