The $640 Billion Question

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Jaime McClennen


On May 18, Victor R. Fuchs, PhD and Arnold Milstein, MD, MPH published a perspective in The New England Journal of Medicine, titled “The $640 Billion Question –Why Does Cost-Effective Care Diffuse So Slowly?”  I highly recommend reading it.

$640 billion is the amount of money saved if health care costs were lessened by 20% through the adoption of cost-effective models. The question the authors pose is: “Why don’t cost-effective models diffuse rapidly in health care, as they do in other industries?”

According to Fuchs and Milstein, the answers lie in the perceptions and behaviors of each of the major stakeholders – the insurance companies, large employers, the public, legislators, hospital administrators, physicians, academic health centers and manufacturers of drugs, medical devices and equipment.

They suggest there are many segments of the health care system that are resistors to adopting cost-effective models of care. They lay blame on many doorsteps but challenge physicians within a professionalism framework to lead and be visionary.

The authors point out that the Physician Charter has been adopted by physician organizations that include a majority of the physicians in the U.S. and it “ethically commits physicians to working toward ‘the wise and cost-effective management of limited clinical resources.'”

“Are U.S. physicians sufficiently visionary, public-minded and well led to respond to this national fiscal and ethical imperative?” they ask.

Their challenge is one for which we hope to provide some guidance. Through various activities, we have asked the question about how physicians, patients and the health care community share in the responsibility of building a sustainable system of care. The 2011 Foundation Forum will pose the question to its 140 diverse participants. Our Putting the Charter into Practice grants program asks its grantees to find innovative ways for physicians to pursue wise and cost-effective management of finite resources.

I hope physician leaders will take this challenge on but believe they will need the full participation of the entire health care community to save the $640 billion for the betterment of its citizens, not the betterment of profit-motivated players.


Daniel B. Wolfson
EVP and COO, ABIM Foundation