Cost Offset: Past, Present, and Future

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Abstract

The health of the U.S. health care system is precarious. Calls for reform in areas such as cost, quality, and equal access to health care are widespread and growing louder each day. Action is required on each of these issues, yet the lack of progress is cause for serious concern. A central problem is the reluctance to acknowledge the roles that the mind and behavior play in health and illness. One solution is the integration of psychological health care into the general health care system. A major vehicle for advancing the integration of health care is the “cost-offset” effect, a concept that involves paying systematic attention to psychological factors in order to reduce overuse of medical services and thereby decrease costs. Despite data demonstrating that the cost-offset hypothesis is quite robust, little has been done to implement integrated health care. This article reviews the literature on cost offset, discusses the policy implications, and considers its application to the public sector.

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