Systems modeling: the first step in a process for solving the health care cost problem

The core problem with the U.S. health care system is--it already costs too much and the rate of its cost growth is cause for further alarm. To deal with these, regulators must introduce incentives for health care providers to reduce costs and introduce incentives that make consumers of health care services concerned about the costs of the services they demand. Achievement of these regulatory goals will create opportunities for the introduction of innovations, including revolutionary new technology, that can lead to major reductions in costs. Modeling of health care system inputs, outputs, transactions, and the relationships between these parameters will expedite the development of an effective regulatory process. This model must include all of those major factors that affect the demand for health care and it must facilitate benchmarking health care subsystems against the most efficient international practices.