Fixing Health Care’s Leaky Pipes: 1% Steps for Health Care Reform

The idea for 1% Steps for Health Care Reform was born backstage after a speech to a large health care company. The talk focused on how one tweak to the health system — getting patients to attend a lower-priced MRI provider – could save private companies and the public billions without harming the quality of care provided. 

But after the speech, a senior executive demanded more. The executive said he didn’t want 1% steps, he wanted to think big. He wanted a single intervention that his company could introduce that would lead to a 10% or 15% reduction in spending. The problem? That’s not how change happens. You can’t get reductions in health spending at that scale via single interventions without reducing the quality of health care services we have today. 

Rather than looking for silver bullets, we should focus on fixing the “leaky pipes” in our system through targeted, evidence-based interventions that collectively add up to real savings. 

That is what is at the heart of 1% Steps for Health Care Reform. 

Today, we are refreshing the project with ten additional ideas for reducing health care spending, all backed by rigorous research and evidence. Savings from these recommendations, along with 13 existing 1% Steps recommendations, add up to about $450 billion in savings annually. That is roughly 8% of the $5.5 trillion the US spends on health care annually.*

To be sure, we should be exploring large-scale reform to our health care system. If we could do it over again, nobody would design the system we have today. The problems are obvious, the system is bureaucratic and deeply frustrating. Insurance premiums for employer-sponsored coverage are going up 10% next year. The Medicare Trust Fund is headed toward insolvency in 2033. High deductibles and out-of-pocket costs keep patients from accessing care and even hasten death. But sweeping health reform is a monumental political task, and people need relief now. 

In a $5.5 trillion health system, a series of smaller fixes can add up to hundreds of billions of dollars in annual savings. Moreover, fixing big problems via small solutions aligns with scientific progress—identifying problems, learning from specific interventions and local successes, and then scaling what works. And if we start fixing little problems, we create the muscle memory that is going to make us more capable of big reform. 

The 1% Steps for Health Care Reform is composed of 23, evidence-based briefs. Real data and rigorous evidence backing smaller changes that add up $450 billion in savings in one year. Below is a list of each new brief, with proposals ranging from making it easier for young children to get the flu vaccine to ending a Medicare “star ratings” program that doesn’t actually deliver quality. 

And this isn’t the end of the conversation. We welcome proposals or ideas you have to add to our growing list of 1% Steps. We all know health care costs in the United States are unsustainable, and there are plenty of leaky pipes to fix.

The 10 New Briefs

Make Medicare Advantage Pay Its Fair Share for Vets

Authors: Amal N. Trivedi, Brown University, Jean Yoon, University of California, San Francisco, David J. Meyers, Brown University, Aaron L. Schwartz, University of Pennsylvania, Erin Fuse Brown, Brown University, Kenneth W. Kizer, Stanford University

Allowing the VA to bill Medicare Advantage plans for veterans' care could save up to $23 billion annually. Read here. 

One Baby, One Bundle (of Bills)

Author: Caitlin Carroll, University of Minnesota

Paying for perinatal care as a single bundle could save about $1.4 billion a year. Read here.

Everyone in the (Insurance) Pool

Author: Michael J. Dickstein, New York University

Combining the small-group and individual insurance markets could lower household and federal spending on premiums. Read here.

Don't Trap Seniors in Nursing Homes

Author: Martin B. Hackmann, University of California, Los Angeles

Shifting part of Medicaid's daily nursing home payment upfront could shorten stays for residents ready to go home and save about $1.5 billion a year. Read here.

No Flu for Kids, More Savings for You

Author: Michael L. Anderson, University of California, Berkeley

Allowing young children to be vaccinated in retail pharmacies could cut kids’ doctors’ office and ER visits for the flu, saving up to $500 million a year. Read here.

Right Care, Right Place

Author: Rachel M. Werner, University of Pennsylvania

Expanding bundled payments for conditions that often require care for seniors after hospital discharge could save about $1.6 billion a year. Read here.

Ban Drug Companies’ Secret Side Deals

Authors: Keith M. Drake, Greylock McKinnon Associates; Thomas G. McGuire, Harvard University

Prohibiting brand-name drugmakers from paying generic companies to keep cheaper drugs off the market could save up to $12 billion a year. Read here.

Don’t Pay Double for the Same Care

Author: Zack Cooper, Yale University

Requiring Medicare to pay the same price for services, regardless of what building it happens in, could save up to $24 billion a year. Read here.

Make Long-Term Care Insurance Work for Families 

Author: Corina Mommaerts, University of Wisconsin-Madison

Encouraging long-term care insurers to pay family caregivers could boost LTC insurance coverage and save about $4 billion a year. Read here.
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No More Stars in Medicare Advantage

Author: Michael Chernew, Harvard Medical School

Ending star-rating bonuses for Medicare Advantage plans, which evidence suggests don't reflect higher-quality care, could save up to $16 billion a year. Read here.

*A Note on the Numbers

The evidence-based recommendations offered by the 1% Steps for Health Care Reform project add up to roughly $450 billion in estimated savings. This total does not represent a CBO-style estimate or account for interactive effects between proposals. Original savings estimates were calculated by each brief’s authors and the Health Care Affordability Lab at Yale. To allow for an aggregate savings estimate, the Health Care Affordability Lab at Yale adjusted estimates to a common base year of 2025.

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