ABSTRACT
The highest health-care costs have been hospital services, long-term care, and non-hospital care of catastrophically expensive chronic health problems. The latest effort to contain health-care costs by reducing utilization of hospital services has boomeranged. The reduced hospital census has increased per-person daily hospital rates. By using the principles of shared and protected risk more creatively, separating catastrophic and non-catastrophic care needs and financing them in different ways, the real costs of "insurance" for both kinds of care can come down. Reframing the problem to be addressed has made it possible to combine proposals from all of the contending strategies for healthcare reform, creating new possibilities for cost containment. New approaches to cost containment, made practical by a shift of emphasis toward health, can begin to make American health care more affordable. Hospitals would have a new incentive to explore less costly routes to care, and mixed medical models for the treatment of chronic disease might be used much more frequently.
