Alexander: Washington Should Get Out of the Way of Private Sector Innovation to Reduce Health Care Costs

 “Going forward, I plan to take what we’ve learned today and from our previous four hearings, and ask leading health care policy experts for specific ideas on how the federal government can reduce the cost of health care.”

WASHINGTON, D.C., November 28, 2018 – Senate health committee Chairman Lamar Alexander (R-Tenn.) today said Washington should get out of the way of private companies that are “disrupting the health care system” with cost-cutting innovations.

“The cost of health care is an issue that is at the front of every Americans’ mind – according to a Gallup poll released days before the midterms, 80 percent of registered voters rated health care as ‘extremely’ or ‘very important’ to their vote – a higher percentage than any other issue polled,” Alexander said. “While there may be a role for government to play, the private sector is on the frontlines working to address America’s high health care costs, and I would like to know what Washington should do to get out of the way of that innovation.” 

Alexander continued: “For example, HCA Healthcare has 178 hospitals and 119 freestanding surgery centers located in 20 U.S. states and the United Kingdom. HCA has implemented new techniques to reduce the spread of MRSA, a drug-resistant bacterial infection, in Intensive Care Units (ICUs). These new techniques have reduced cases of MRSA by 37 percent in HCA hospitals, and have been so effective that the World Health Organization and the Centers for Disease Control and Prevention have added them to their best practices. According to HCA, this reduction in MRSA infections saves $170,000 for every 1,000 patients. Those savings are shared among the hospital, insurers, and patients. Dr. Perlin, our witness from HCA Healthcare, has been on the frontlines of this and other innovations, showing what a smart doctor can do when given the resources to impact an entire system, such as one as large as HCA.”

Alexander made his remarks today at the fifth hearing in a series on how to reduce health care costs, focused on finding ways private sector innovation could make health care more affordable for Americans.

At its first four hearings, the committee looked at how to reduce what we spend on unnecessary health care tests, services, procedures, and prescription drugs, and, how to increase preventive care; how to reduce administrative burdens imposed by the federal government; and how to make information on the cost and quality of care more easily available.

“Going forward,” Alexander said, “I plan to take what we’ve learned today and from our previous four hearings, and ask leading health care policy experts for specific ideas on how the federal government can reduce the cost of health care.”

Alexander also told the story of Memphis-based company International Paper: “International Paper, a 120-year old company headquartered in Memphis, has, since 2004, used a variety of approaches to lower the cost of health care for their 33,000 employees. One innovative approach International Paper takes is encouraging employees to use the Best Doctors program. When an International Paper employee’s doctor recommends, for example, a hip replacement, the employee can ask for a second opinion from Best Doctors.

“Best Doctors reaches out to get the necessary medical records from the employee’s doctor, sends the records to world-class medical professionals who review the case, and then either reaffirms the hip replacement or recommends a different course of treatment, such as physical therapy. The use of this voluntary program saved International Paper over half a million dollars in 2017 by preventing unnecessary care.”

You can read Alexander’s full prepared remarks here.

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