A focused review of RAND Health research identified small ideas that could save the U.S. health care system $13 to $22 billion per year if successfully implemented. They include changing payment policy for emergency transport and greater use of $4 generic drugs. Small ideas do not require systemic change; thus, they may be both more feasible to operationalize and less likely to encounter stiff political and organizational resistance.

Cover: Small Ideas for Saving Big Health Care Dollars
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Small Ideas for Saving Big Health Care Dollars

by Jodi L. Liu, Deborah Lai, Jeanne S. Ringel, Mary E. Vaiana, Jeffrey Wasserman

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Research Questions

  1. Which ideas for relatively focused and feasible health care changes would generate cost savings?
  2. What would be the potential savings for each idea at the national level?

A focused review of recent RAND Health research identified small ideas that could save the U.S. health care system $13 to $22 billion per year, in the aggregate, if successfully implemented. In the substituting lower-cost treatments category, ideas are to reduce use of anesthesia providers in routine gastroenterology procedures for low-risk patients, change payment policy for emergency transport, increase use of lower-cost antibiotics for treatment of acute otitis media, shift care from emergency departments to retail clinics when appropriate, eliminate co-payments for higher-risk patients taking cholesterol-lowering drugs, increase use of $4 generic drugs, and reduce Medicare Part D use of brand-name prescription drugs by patients with diabetes. In the patient safety category, ideas are to prevent three types of health care-associated infections: (1) central line-associated bloodstream infections, (2) ventilator-associated pneumonia, and (3) catheter-associated urinary tract infections; use preoperative and anesthesia checklists to prevent operative and postoperative events; prevent in-facility pressure ulcers; use ultrasound guidance for central line placement; and prevent recurrent falls.

Small ideas do not require systemic change; thus, they may be both more feasible to operationalize and less likely to encounter stiff political and organizational resistance.

Key Findings

In the Substituting Lower-Cost Treatments Category, These Ideas Would Provide the Following Estimated Annual Savings in Millions of 2012 U.S. Dollars (Ranges Indicate Lower and Upper Bounds)

  • Reduce use of anesthesia providers in routine gastroenterology procedures for low-risk patients ($1,200).
  • Change payment policy for emergency transport ($290–$580).
  • Increase use of lower-cost antibiotics for treatment of acute otitis media ($36).
  • Shift care from emergency departments to retail clinics when appropriate ($3,500 [$1,200–$4,400]).
  • Eliminate co-payments for higher-risk patients taking cholesterol-lowering drugs ($1,300).
  • Increase use of $4 generic drugs ($5,900 [$4,900–$6,800]).
  • Reduce Medicare Part D use of brand-name prescription drugs by patients with diabetes ($1,500).

In the Patient Safety Category, These Ideas Would Provide the Following Estimated Annual Savings in Millions of 2012 U.S. Dollars (Ranges Indicate Lower and Upper Bounds)

  • Prevent three types of health care-associated infections: (1) central line-associated bloodstream infections ($18 [–$55–200]), (2) ventilator-associated pneumonia ($47 [–$5–$110]), and (3) catheter-associated urinary tract infections ($100 [–$88–$170]).
  • Use preoperative and anesthesia checklists to prevent operative and postoperative events ($170 [–$110–$950]).
  • Prevent in-facility pressure ulcers ($2,400 [$1,600–$4,400]).
  • Use ultrasound guidance for central line placement ($56).
  • Prevent recurrent falls ($900).

Recommendations

  • The ideas considered in this paper are based on RAND studies. Additional ideas could be identified by searching the literature, asking experts, looking at projects funded by the Center for Medicare and Medicaid Innovation, and reviewing lists created by specialty societies of evidence-based recommendations.
  • Promising candidate ideas could be subject to the same cost and feasibility analysis conducted here, potentially highlighting additional opportunities for modest cost savings.

This report describes work conducted as part of our RAND-Initiated Research program and was funded by the generosity of RAND's donors and by fees earned on client-funded research. The research was conducted in RAND Health, a division of the RAND Corporation.

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