Public Policy Initiative: Low-Cost Healthcare

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Table of Contents

Introduction
Rising Cost of Healthcare
Institutional Context
Economic Context
Demographic Context
Ideological Context
Public Policy Initiative
Conclusion
References

Introduction

Health is wealth. A very simple statement and yet many will agree, that in this world, nothing is more important than good health. The multi-million dollar contracts and the college degrees will not mean a thing if someone is bedridden and could no longer enjoy life. In this regard, the cost of healthcare is very important because a simple health problem can be exacerbated if a sick person has no access to basic healthcare. The irony of it all is that in the most powerful country in the world, rising healthcare costs are driving many to desperation. There is, therefore, a need to examine public policy initiatives that will result in low-cost healthcare. This paper will tackle this issue within the context of healthcare costs in the city of Los Angeles, California.

Rising Cost of Healthcare

It seems that the cost of living is rising in every part of the globe. This is more obvious in a country that transformed the meaning of what it is to be a consumer. The cost of a product or a service can be attributed to a host of different factors, such as an increase in demand or the unavailability of the sought-after commodity. In the case of healthcare, there seems to be an upsurge in the number of people who are getting sick while at the same there is a reduction in terms of the number of health workers as well as an increase in the cost of production of medicines and other medical paraphernalia. Aside from direct costs, there are related issues that must be pointed, and these are listed as follows (author, year):

The U.S. health care system absorbs a massive proportion of national resources, and that total spending from all sources was $2.0 trillion in 2005 alone.
There are an estimated 47 million U.S. residents that have no health insurance.
The retirement of the “Baby Boomers” is causing strain in the U.S. health care system.

According to one report, the cost of healthcare in California continues to rise, “…the average California family will spend $2,788 in 2006 for health insurance premiums and health services … That works out to an estimated $42.8 billion on health care for California families in just one year” (The William and Flora Hewlett Foundation, 2007). The first thing that comes to mind is huge amounts of money that goes to medicines, hospital care, and health care facilities that could have been used more productively if spent on education or infrastructure, perhaps. In fashioning out a public policy initiative, these things must be examined in detail with the caveat that the State of California is a culturally diverse place with so many people having different views and opinions when it comes to healthcare.

The United States has become a melting pot of different cultures and nationalities. These factors, combined with the freedom to choose one’s religion and the freedom to form opinions, will make it impossible to form a public policy initiative that will please everybody. Still, the difficulty in creating a perfect solution should not discourage policymakers from forging landmark laws and policies that will improve the quality of life in the State of California, particularly in the city of Los Angeles (Weitz, 2009). But before going any further, policymakers must allow their ideas to run through four major frameworks, and these are: a) institutional context; b) economic context; c) ideological context; and d) demographic context.

Institutional Context

Policymakers must be able to master the intricacies of American institutions. In the case of Los Angeles, there is no need to elaborate that it is under the State of California and that there are policies already in place that are unique to this State, and therefore the creation of new public policy initiatives must be in accordance to the laws governing the State. Furthermore, in the case of healthcare, there is a need to understand how local government can access federal funding. With regards to healthcare, the various levels of government have a vital role to play when it comes to law enforcement, particularly with regards to the following areas:

monopolies;
predatory pricing; and
elimination of small businesses (author).

Healthcare cost is determined by different factors, but three major ones are coming from monopolies/oligopolies that can result in predatory pricing and the elimination of small businesses. Anti-trust laws are not new, but they became very popular in recent decades due to the emergence of businesses that affected a large portion of the U.S. population. In healthcare, a dominant healthcare provider can increase the cost of this type of service even if the demand and the cost of doing business remain the same.

Other regulatory activities include tax policies, especially when it comes to “sin taxes” that are levied on cigarettes, alcohol, and in some states, even snack foods (Cutler, year **). The government is also heavily invested when it comes to the following areas of concern:

health insurer through Medicare and Medicaid programs;
provides direct care, e.g., veterans, defense personnel, and through public hospitals and clinics; and
financing research such as the $10 billion annual costs incurred by biomedical research (Cutler, year **

Economic Context

One of the most important aspects relating to healthcare is the economy, particularly when it comes to employment, wages, and the type of industries that will dictate the earning capabilities of the people. There is also a need to be aware of external forces such as the impact of globalization and the current economic crisis. When it comes to globalization, the negative consequence is the disappearance of jobs as workers from other parts of the globe can compete for work that Americans used to perform, such as in the manufacturing industry. It is common knowledge that factories in China and India can attract investors as the cost of producing a particular product is significantly lower as compared to the manufacturing cost of the same item inside the United States.

The current economic crisis, on the other hand, is discouraging investors from pumping more money into the economy. The banks are unable to lend money, and therefore there is no incentive to create more industries and more jobs. In short, more and more people are out of work while companies that are left standing are in a cost-cutting frenzy. The things that get eliminated are those that are not directly related to production, and in many quarters this means reducing employee benefits. A reduced work rate can also mean that workers will no longer be able to pay for healthcare.

Demographic Context

Creating a public policy initiative having only economic and institutional frameworks in mind is incomplete. In fact, it would be extremely difficult to propose a solution to the problem of rising healthcare cost without first understanding the people that will benefit from said policies. For instance, the local government can provide facilities that will ensure low-cost health care for those living within the city of Los Angeles and yet fails to consider the ethnic background of some of the residents of the city. This will result in the creation of a facility that is inaccessible to those who cannot communicate clearly with health professionals assigned to these healthcare facilities.

Aside from tackling language barriers, policymakers must also be aware of migration patterns as well as shifts in population from large urban centers to rural, suburban, and small urban areas. The shifts in population can result in so many different things, but one important demographic is the number of health workers in a particular area. If the exodus to the rural areas and small towns includes doctors, then urban centers can experience a dearth in the supply of qualified health professionals. Thus, policymakers must create policies that will encourage health workers not to venture so far away from the city of Los Angeles in order to assure that the ratio between physicians and patients will remain at an optimal level.

Ideological Context

Aside from determining money matters, the state of the economy, as well as bureaucracy, the third most important framework that should be used to evaluate public policy initiatives is ideology. This is because the definition of a policy problem will always be a matter of disagreement, especially among people with differing beliefs and principles (author, year **). This is also true when it comes to healthcare. There are many opposing ideas as to how federal funding should be used to solve the rising cost of health services in this country.

The following issues can be considered as byproducts of dissenting opinions, and that the disagreement over these issues is not only causing undue friction but can also force the discussion to a standstill and, worse, increase the cost of healthcare:

Malpractice insurance – There is disagreement when it comes to dealing with the issue of malpractice; on the one hand, there is a need for stricter measures so that physicians will continue to provide high-quality services, but on the other hand, anticipating malpractice litigation will force health care providers to increase their fees and this, in turn, is passed on to the consumers.
There is unprecedented fear of illness and old age – It can be argued that a hundred years ago, Americans have no idea of what it means to undergo an annual executive check-up, but today there is pressure to keep a tight watch on health, especially when it comes to breast cancer, prostate cancer and other problems that can be easily cured when detected early. While this is being responsible there excessive fear of death will easily use up resources that should have been given to those who are gravely ill.
Focus is on sickness and not on health – It will be very difficult to turn the tide; for the most part of the last century and the present, the goal of the average American is to eliminate sickness rather than to implement policies and learn behaviors that will reduce risks.

Public Policy Initiative

Based on the preceding discussion, an excellent public policy initiative must be developed using the following ideas:

prevention is better than cure;
eliminate the added cost of health care due to malpractice insurance; and
encourage competition among health care providers.

According to Harvard University’s department of economics, it makes more sense to improve prevention measures rather than to use billions of dollars to cure the sick. This is like reframing the problem. For many decades rising health care cost has been a burden to the public sector and that pumping more dollars into the system will not work because a society composed of sick and dying people can be likened to a bottomless pit that will continue to absorb resources without end. A healthy society will naturally translate to less government expenditure when it comes to healthcare.

There is also the added problem of malpractice insurance. Although there is a need to put this system in place, more and more people are finding loopholes in said laws and that these are contributing to added health care costs. There is an existing California law that helps in cutting defendants’ payments by 30 percent to plaintiffs who win such lawsuit trials (The William and Flora Hewlett Foundation, 2007). A public policy initiative that will help improve regulatory practices in terms of preventing malpractice rather than to arming plaintiffs with more ammunition to go after health care providers. It is one thing to punish an erring physician and another to provide legal loopholes that unscrupulous characters can easily exploit.

When it comes to creative solutions, the State of California is encouraging many to look into the concept of “doctors without borders” (Berestien, 2002). This means that in order to significantly reduce the cost of health care, residents of California can travel to Mexico to avail themselves of quality and yet low-cost health care services. According to one report, cash-carrying travelers have for years come from as far as San Francisco to avail of medical and dental care in Tijuana and other border towns (Berestein, 2002). There is a reason why it is cheaper to get dental services in Mexico as compared to getting the same service in mainland United States. There is, of course, the issue of quality versus accessibility. The public policy initiative must help establish rules and regulations to improve this system of delivering healthcare.

First of all, there is a need to separate fact from fiction and reality from myth. There is the issue of perception as these facilities are considered inferior to U.S.-backed facilities. But this can also be pure assumptions and a byproduct of ethnocentrism rather than hard facts. Moreover, a public policy initiative can be used to explore the issue regarding low-risk medical procedures as compared to complex one requiring more expensive medical treatment and the need to use cutting-edge technology. It is one thing to go to “doctors without borders” for a dental check-up and another to avail of the same service for chemotherapy.

Conclusion

The problem of the U.S. healthcare system is extensive and complicated. An overview of the four frameworks: institutional context, economic context, demographic context, and ideological context, can easily reveal how extremely difficult it is for policymakers to create a solution that can significantly improve the system and please the majority. In a democratic country like the United States, the majority rules, and therefore, there is no other way to go about solving this problem rather than to find a solution that will help the majority of Americans.

But even with a team of economists, health care experts, and sociologists working full time and round the clock, there is still no end in sight when it comes to the issues faced by the U.S. healthcare system. Taking everything into consideration, it was determined that prevention is better than cure. At first, the solution can be seen as oversimplified, but a careful analysis will reveal that there is much wisdom to this idea. Considering the high percentage of highly preventable deaths and diseases, it is a shame that many Americans, including future generations of Americans, will have to be overburdened by the irresponsible behavior of others.

If smoking, consumption of alcohol, and the overindulgence of junk food will not contribute to the overall improvement in American society, then there is a need for a public policy initiative to limit access to these harmful substances. There is also a need to increase awareness regarding the harmful effects of these types of food, beverage, and intoxicating substances. There is a need for a public policy initiative that will encourage the funding for research that will determine the exact social costs incurred by these types of behavior.

Aside from putting pressure on alcohol, tobacco, and junk food, a public policy initiative that will encourage competition among health care providers will be a welcome respite. The law of supply and demand states that if there is increase demand with very low supply, then inflation is the inevitable result. But in America, there are other socioeconomic factors that will explain the very expensive nature of healthcare. Even if the government succeeds in increasing the number of healthcare facilities and healthcare professionals, the discrepancy in costs will still be apparent if compared to other countries. There is no need to elaborate why it is more expensive to be treated in the United States than to be treated elsewhere, and taxes, as well as existing laws, are partly to be blamed.

Thus more and more people were looking into alternatives and began thinking unconventionally to solve a very thorny problem. One of the ingenious solutions was to cross U.S. borders and get treatment in facilities located nearby – according to a source in Tijuana, Mexico is less than an hour’s drive for some patients. Even if the government does not encourage this practice, more and more people will venture into unfamiliar territory, especially if they could no longer afford the American-type of healthcare. Therefore, it is better to think far ahead and encourage the local government, especially in the State of California and the city of Los Angeles, to regulate this radical approach to healthcare.

If this can be regulated, then there can be a symbiotic relationship between the health care providers in Mexico and the cash-strapped people living in U.S. territory. If more positive changes can be added to this relatively new method of accessing healthcare, then Americans can expect improvements in safety as well as the technology that will be used to help more incoming patients. There can be a chain-reaction of events that will increase the benefits while lowering the risks. In the end, there will be more options for Americans, and this will create a competitive atmosphere that will, in turn, reduce the cost of healthcare in the United States.

There is no single plan or strategy that can solve the burgeoning problem of rising healthcare costs. The best way to create a public policy initiative is to gather a wide range of information using the four frameworks mentioned previously. In this way, policymakers will be able to discover a solution that will help a great number of Americans, especially in a region reeling from the impact of the current economic crisis. The city of Los Angeles and its residents are feeling the impact of the economic crunch, and they needed all the help that they can get. It is therefore imperative to look at creative solutions and a need to reframe the problem. For instance, instead of pouring billions of dollars into cancer treatment, one can spend a fraction of that amount increasing awareness regarding cancer-causing agents and providing incentives for those who will stop excessive smoking, drinking, and the overconsumption of unhealthy food products.

References

Berestein, Leslie. “Doctors Without Borders.” TIME Magazine Archives. Web.

Cutler, David. (1996). Public Policy for Healthcare. National Bureau of Economic Research. Cambridge, MA.

Foonberg, J. (2004). How to Start and Build a Law Practice. New York: American Bar Association.

Martha Loustaunau. (1999). Life, Death and In-Between on the U.S.-Mexico Border. Westport, CT: Greenwood Publishing.

The William and Flora Hewlett Foundation. (2007). Controlling Health Care Costs in California: A By the People Community Dialogue. Web.

Weitz, Amy. (2009). Governor’s Plan to Fix Budget Crisis Could Worsen Health Care Crisis, Says California Public Hospital Association. California Association of Public Hospitals and Health Systems. Web.

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