“There is money to be saved, but it is not going to be cheap”

So says David M. Cutler, a health economist at Harvard University, as quoted in the NY Times article "Who Pays for Efficiency?"

Indeed, the quest to save dollars in the nation’s $2.1 trillion annual health care bill is becoming a lucrative market of its own. Thousands of companies, large and small, are pitching cost-saving ideas that range from electronic patient records to new medical devices.

It’s not all marketing hype. Experts in health policy agree that there is a real opportunity to curb health spending, which last year was the equivalent of $7,000 for every man, woman and child in the country. Studies predict a gain of as much as 30 percent in efficiency, mostly through reducing unnecessary tests and prescriptions, paperwork and medical mistakes.

Such streamlining would not cut the nation’s total medical spending, as long as there is a growing aging population with ever-increasing health needs. But certain measures are expected to help keep costs from spiraling.

One theme of the article is that incentives are 'screwed up'. For example, reformers and corporations push primary care doctors to computerize their patient records by buying computers and an electronic medical systems. So who reaps the benefit from all this streamlining of some processes?

Insurance companies, mostly. In fact the doctors featured in the article have not seen an increase in their income, although their practice now does with three less workers. So where is the incentive for other primary care doctors to computerize their practices?

Money is the big incentive driving trends in healthcare, and this is seem in many examples. Sure less open heart surgeries are done with the advent of angioplasty and stents, but many more of those procedures are done than the number of less open heart surgeries.

“The trigger for intervention is lower and the pool of treatable patients is larger,” said Dr. John D. Birkmeyer, director of surgical outcomes research at the University of Michigan and a co-author of the journal article. “These are institutions with an incentive to increase the supply of surgically treatable disease. It’s a matter of if you build it, they will come.”

As the article states, entreprenuers are ready to help solve problems like complications from the mainstream use of new procedures like stenting. But their solutions are often costly.

Dr. Dean Ornish (a graduate of my school!) said pushing technology to treat and manage disease is the wrong approach to reducing healthcare costs. Instead, says the proponent of preventive care, let's focus on "low-tech approaches".

More than 90 percent of heart disease, Dr. Ornish insists, is preventable.

Over the years, Dr. Ornish has led several projects showing that fundamental changes in diet, exercise and stress management can stop and even reverse heart disease.

Preventive programs cost money upfront, but can cut overall treatment costs to insurers by 30 percent or more, yet few insurers pay for preventive care.

A third of people with health coverage switch insurers every year, so insurers reason that their investment in preventive health measures could become another company’s gain.

That attitude may be changing, though. Last year, Medicare agreed to cover a dietary program designed by Dr. Ornish.

Still, high technology reigns because there is so much venture capital investing in high tech (which tends to reap higher rewards, the thinking goes) like new medical devices, and because people in general want to feel that everything is being done when their lives are on the line -- and are usually willing to pay (or have their insurers pay) for it.