How the U.S. health care system can save $1 trillion

Consulting giant McKinsey explains.

The U.S. health care industry could pocket this trillion-dollar coin.

At a moment when political child's play over President Obama's health care reforms has shut down the U.S. government, this proclamation should grab attention: The country is missing a chance to save $1 trillion in health care costs.

Yes, $1,000,000,000,000. Twelve zeroes, thirteen figures. That will buy a few PET scanners and stethoscopes. And then maybe the Republican Party can stop denying health care for everyone, as Obama's goal of universal care won't cost the taxpayers so much.

The Republicans have currently shut down the government by refusing to approve the federal budget until Obama and his Democratic Party either delay the medical reforms or eliminate funding for them. "Nah nah," said the Republicans, as public services froze across the country .

So where will the trillion come from? All the system has to do is start paying doctors and hospitals for achieving results, rather than simply paying them for providing services, according to a new report by consulting giants McKinsey & Co. In an article entitled Claiming the $1 trillion prize in U.S. health care, McKinsey notes:

"As divisive as the debate has been, there is a clear consensus across political parties and health-care stakeholders that if the United States is to address its unsustainable health-care costs, it must change the way it pays hospitals, physicians, and other providers. The country needs to move away from fee-for-service reimbursement, which rewards providers for tasks performed, and toward a method of payment that compensates them for successfully addressing patients’ health-care needs."

The U.S. health care industry has taken baby steps toward results-oriented compensation, but "has largely failed to make the transition at a significant scale," McKinsey says.

Of course, some of the savings could vanish as the industry pays McKinsey to tell it how to implement the changes. But if the outcome is medical treatment for all, it would be worth it.

Photo is from DonkeyHotey via Flickr

More McKinseyisms on SmartPlanet:

This post was originally published on