In healthcare, cost containment is defined as reducing the level or rate of increase in health care costs
In healthcare, “cost containment is defined as reducing the level or rate of increase in health care costs” (Jencks & Schieber, 1992). For organizations to practice this concept, there are a minimum of three pieces of information that are crucial to practicing cost containment: one must understand what specific cost needs to be reduced, where this cost is coming from and what entity will be able to capture the savings (Rand Corporation, 2020). Telemedicine is one way to improve health care access and health system efficiency, while also attempting to improve health care costs (National Conference of State Legislatures, 2023).
Ever since the challenges created by the Covid-19 pandemic, the use of telemedicine has increased. With telemedicine, in addition to increased access to health care and increased patient convenience, there has also been a reported increase in savings for both patients, as well as health care providers and organizations (Patel et al., 2023). According to Snoswell et al. (2020), productivity gains, alternate funding models, reductions in secondary care and telemonitoring are various areas of savings for telehealth. One example of cost containment has been observed with the use of telehealth at the Veteran’s Health Administration. Although the per patient per year annual cost for the 2012 telehealth program was $1,600, that cost was much less compared to over $13,000 for traditional home-based care, and even less than nursing home care, which can cost over $77,000 (American Hospital Association, 2016).
In addition to an increased savings in an actual dollar amount, telemedicine has also shown a potential improvement in patient outcomes, which has a positive correlation with cost savings as well. By allowing patients to directly connect with their providers virtually, the expense for travel and time is lessened (Patel et al., 2023). Health care needs are constantly changing, and with the proper use of technology, medicine will be able to not only keep up with the times, but also help to cut costs not only by a dollar amount, but by patient outcomes as well.
References
American Hospital Association. (2016). Telehealth. https://www.aha.org/telehealth
Jencks, S. F., & Schieber, G. J. (1992). Containing U.S. health care costs: What bullet to bite? Health Care Financing Review, 1-12. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4195141/
National Conference of State Legislatures. (2023, June 30). Health costs, coverage and delivery state legislation. https://www.ncsl.org/health/health-costs-coverage-and-delivery-state-legislation
Patel, K. B., Turner, K., Alishahi Tabriz, A., Gonzalez, B. D., Oswald, L. B., Nguyen, O. T., Hong, Y., Jim, H. S., Nichols, A. C., Wang, X., Robinson, E., Naso, C., & Spiess, P. E. (2023). Estimated indirect cost savings of using Telehealth among Nonelderly patients with cancer. JAMA Network Open, 6(1), e2250211. https://doi.org/10.1001/jamanetworkopen.2022.50211
Rand Corporation. (2020, January 22). Getting to affordability: Spending trends and waste in California’s health care system. California Health Care Foundation. https://www.chcf.org/publication/getting-affordability-spending-trends-waste/
Snoswell, C. L., Taylor, M. L., Comans, T. A., Smith, A. C., Gray, L. C., & Caffery, L. J. (2020). Determining if telehealth can reduce health system costs: Scoping review. Journal of Medicine Internet Research, 2020. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7605980/
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