Giving Compass' Take:

• Texas Medical Center Health Policy Institute in Houston consulted experts and determined steps that states can take immediately to reduce wasteful healthcare spending. 

• How can philanthropy help gather political support for these ideas? How can the federal government implement effective cost-reduction for healthcare? 

• Learn more about healthcare inefficiencies in the U.S.


The only way to achieve the goal of affordable health care for all Americans is to cut the cost of care. Unfortunately, neither the Democrats' Affordable Care Act nor the GOP's failed American Health Care Act made great strides towards that goal.

But states can address the problem on their own. A good place to start is by working to cut the approximate $1 trillion in annual wasteful health care spending.

States can be part of the solution. Here are five ways:

1. Mandate that all health information be provided at a sixth-grade reading level. 

Many in health care don't speak to consumers about health care in their own language.

2. Ensure that expensive services adhere to physicians' own guidelines.

States should identify the 20 most expensive Medicaid services and assemble a panel of physicians from each specialty practicing in their state to review the guidelines.

3. Encourage paying doctors a salary instead of on a fee-for-service basis.

The fee-for-service model incentivizes overtreatment, amounting to $200 billion in wasteful spending annually.

4. Improve care while lowering costs by using paraprofessionals. 

Paraprofessionals such as community health workers and "Grand-Aides" -- trained "nurse extenders" who follow up with patients after discharge -- can help keep people healthier and out of the hospital.

5. Introduce cost-effectiveness into Medicaid preferred-drug lists. 

Too many new drugs have exorbitant prices. Around the world, nations use the cost-effectiveness of drugs as a measure of value. If drugs aren't cost-effective, they aren't approved.

Read the full article about cutting the costs of healthcare by Ryan Holeywell at Governing.