The health care system is “so screwed up in where we invest our money,” and that needs to change for costs to become manageable, said a health researcher Tuesday.

Speaking at the National Association of Health Underwriters Capitol Conference in Washington, Ken Thorpe, co-director of the Emory Center on Health Outcomes and Quality in Atlanta, explained that health care costs can be broken down into two simple areas: the change in the prevalence of treated diseases, such as hypertension and diabetes, and how much does it cost to treat those problems. To fix it simply, he says, there needs to be averting, detecting and managing chronic diseases.

Noting that Medicare will spend about $250 billion on potentially preventable diseases over the next decade, the challenge becomes identifying programs “that avert disease and provid[ing] more effective approaches for keeping chronically ill patients healthy.”

In addition, the top six chronic diseases — which account for 40% of Medicare spending growth — are lifestyle related and often do not require impatient hospitalization, according to Thorpe.

And among the U.S. population, nearly 50% have one or more chronic health condition, Thorpe added, which accounts for nearly 80% of all money spent on health care, 70% of mortality in the U.S., and for every dollar spent by an employer on treatment, four dollars in lost productivity.

 “The key,” Thorpe said about those whose lifestyle may lead to chronic diseases, such as being overweight, “is not to charge them more but engage them and keep them healthier, keep them out of the clinic, keep them from being readmitted to the hospital.”

“We pay for the consequences of not preventing,” he added. “We spend about $15 billion on prevention, that’s not going to get the job done. If we want to find ways to control the health care cost, we need to do a better job of thinking where the health care costs are.”

He pointed to a community diabetes prevention program run at local community organizations as an example. Using diet and exercise lifestyle intervention, there was a more than 50% reduction in the number of new cases of diabetes. “We can take this program and run it through YMCA’s or some other organizations,” he said. “Scaling that nationally would cost $100 million. …We could do that in the next year.”

He also suggested starting to work with the private sector and providing tax incentives for employers who adapt preventive programs earlier.