The question is: What can be done to lower both the high level of health care spending and its high rate of increase from year to year?

The Solutions

Geography. Pioneering studies by researchers at Dartmouth have shown enormous disparities in expenditures on health care from one region to another with no discernible difference in health outcomes. Doctors in high-cost areas use hospitals, costly technology and platoons of consulting physicians a lot more often than doctors in low-cost areas, yet their patients, on average, fare no better. There are hints that they may even do worse because they pick up infections in the hospital and because having a horde of doctors can mean no one is in charge.

If the entire nation could bring its costs down to match the lower-spending regions, the country could cut perhaps 20 to 30 percent off its health care bill, a tremendous saving. That would require changing the long- ingrained practices of the medical profession. Public and private insurers might need to refuse coverage for high-cost care that adds little value.

Stick to What Works. The sad truth is that less than half of all medical care in the United States is supported by good evidence that it works, according to estimates cited by the Congressional Budget Office. If doctors had better information on which treatments work best for which patients, and whether the benefits were commensurate with the costs, needless treatment could be junked, the savings could be substantial, and patient care would surely improve. It could take a decade, or several, to conduct comparative-effectiveness studies, modify relevant laws, and change doctors’ behavior.

Managed Care. For a brief period in the 1990s it looked as if health maintenance organizations competing for patients and carefully managing their care might bring down costs and improve quality at the same time. The H.M.O.’s did help restrain costs for a few years. The problem was, doctors and patients hated the system, management became much looser, and the upsurge in costs resumed. Managed care techniques are creeping back into some health plans, especially for services apt to be overused, but too heavy a hand would most likely produce another backlash.

Information Technologies. The American health care system lags well behind other sectors of the economy — and behind foreign medical systems — in adopting computers, electronic health records and information-sharing technologies that can greatly boost productivity. There is little doubt that widespread computerization could greatly reduce the paperwork burden on doctors and hospitals, head off medication errors, and reduce the costly repetition of diagnostic tests as patients move from one doctor to another. Without an infusion of capital, the transition from paper records is not apt to happen very quickly.

Prevention. Everyone seems to be hoping that preventive medicine — like weight control, exercise, better nutrition, smoking cessation, regular checkups, aggressive screening and judicious use of drugs to reduce risks — will not only improve health but also lower costs in the long run. Preventive medicine actually costs money — somebody has to spend time counseling patients and screening them for disease — and it is not clear how soon, or even whether, substantial savings will show up. Still, the effort has to be made. The Milken Institute recently estimated that the most common chronic diseases cost the economy more than $1 trillion annually, mostly from lost worker productivity, which could balloon to nearly $6 trillion by the middle of the century.