How to Control the Costs of Health Care Services — An Inventory of Strategic Options

Abstract

This paper has two objectives: (1) to provide an inventory of popular strategies for cost reduction or cost containment in the health services research literature and (2) to propose a coherent framework to organize this inventory. The purpose of this framework is to inform decision-makers when grappling with the opposing forces they face in choosing a cost reduction strategy. The trade-off is clear: to access progressively more possible strategies, the decision-maker must be ready to expose the population and patients to more significant changes in services provided. On one hand, more choices are preferable because each strategy attacks the problem from a different angle and being restricted to fewer “angles” increases the likelihood that a specific “well” may have dried up. On the other hand, we know that change is often viewed, a priori, negatively in health care management, so there are pressures to limit the impact on services.