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Situation. A patient demands an itemized bill from your hospital and then complains to you that she was charged $129 for a “mucus collection system” which turned out to be a box of tissues. A response to her complaint if one were the Chief Executive Officer (CEO) for that hospital. Explanation the situation to the patient and teaching the patient about how expensive is health care and correction of what happened.
Introduction
Managing the rising cost of healthcare has been a raging debate over the past few years between players in the health sector, with finding who to blame taking center stage instead of finding solutions. However, the less effort made to find solutions to address this rise is not forthcoming and this leaves American citizens feeling the pinch of having to pay more for health care services despite their committed incomes. High costs both affect employers and their workers with the latter opting to be uninsured so as to be able to afford health services. Employers on the other hand feel their workers disregard their predicament of trying to make profits while trying to ensure their medical benefits are provided for. (Feldman et al1989).
High cost of health care
The woes of the U.S health sector and the ever-soaring cost of health provision can be attributed to health insurers and private companies that are out to make profits. They can only make returns by paying health providers less money than what they collect as insurance policy from their policyholders. Patients are being saddled with the increase in expenses as a result of insurers not being able to handle the rising costs.
Cases, where health providers are charging for prescriptions that were not seen before, is now an everyday practice. Providers are forced to do this so as to be able to pay salaries and cover their operational expenses or risk closure. There are a number of costs that providers incur such as insurance, equipment, licensing, software and much more that are not covered by health insurers. Also the competition within the sector plays a key role in the rising cost of healthcare. (Jain et al 2010)
A strict implementation of managed care plans compounded with low inflation slowed down the escalation of high spending on medical services but it still has not achieved a complete block on rising healthcare costs which are projected to soon start rising up rapidly. Iglehart (1999) argues that “…magnitude of public expenditures in any health care system is important because it indicates the number of attention governments are likely to pay to the system and thus the influence they bring to bear on its configuration.
Notwithstanding the government’s role in the financing and regulation of health care has grown inexorably under both Republicans and Democrats ever since the enactment of Medicare and Medicaid in 1965″. The American health sector is by far the most costly in the world with patients struggling to foot their medical demands. Spending in the health sector alone is approximately about 16% of GDP recent estimates by the Health and Human Service Department say that this will climb to about 19.5% of GDP by 2017. (Jain et al 2010)
Furthermore, it is noted that the American health system only favors considerably health insurers, big pharmaceuticals and big private health facilities and not the patients that it is supposed to be providing affordable medical services for. When citizens fall ill the cost of their health check-up is transferred on to other people or taken up by health providers, who recoup their losses by transferring the cost onto insured patients with insurance premiums by mounting their premium amounts and charges resulting to high insurance costs and high medical costs. (Melnick & Zwanziger 1988).
Causes
High or increasing health rates can be attributed to some of the causes listed below among others:
- Advancement in technology, has lead to the prescription of expensive procedures by doctors just to cover hospital expenses and patients are expected to foot the bills;
- Super drugs being researched annually, by big pharmaceuticals for example Johnson & Johnson that invest billions in their researches, lead to health providers passing on the cost to patients;
- Marketing and advertising carried out by health insurers are being financed by policyholders albeit indirectly being charged extra administrative fees resulting to a gradual increase in costs each year; and
- Delaying and denial of claims by health insurers.
Recommendations
- Provision of financial incentives to healthcare providers and doctors for services offered;
- Insurers should raise their efficiency to higher levels and discontinue the delays in processing claims;
- Putting in place policies that check on activities of private health insurers, private health facilities and pharmaceutical companies;
- There should be a balance between money charged from patients for premiums and money paid to providers by insurers;
- Accountability by private health insurers and pharmaceuticals on their part in giving affordable insurance premiums and the government in its policies that are intended to bring down medical costs; and
- There should be clear decentralization and competition in the sector so as to do away with the monopolization of services which results in high medical costs.
Conclusion
The mounting costs of provision of health services can be attributed to the high level of competition among players in the health sector can which as seen above and thus there is need for proper regulation of the sector by the government, however the costs cost of health care will be termed to be discriminatory to many. (Reinhardt 1991).
Reference list
Feldman, R. ET al. (1989). Demand for Employment-Based Health Insurance Plans. Journal of Human Resources, 115-142.
Iglehart, J. K. (1999). The American Health Care System. New England Journal of Medicine, 70-76.
Jain, S.H., Seidman, J. and Blumenthal, D., (2010). How Health Plans, Health Systems, And Others In The Private Sector Can Stimulate ‘Meaningful Use’. Health Affairs, 29(9): 1667-1670.
Krueger, A. B. and Reinhardt U. E. (1999). The economics of employer versus individual mandates. Health Affairs, 13(2), 34-53.
Melnick, G.A., and Zwanziger J. (1988). Hospital Behavior under Competition and Cost Containment Policies: The California Experience. Journal of the American Medical Association, 260(18), 2669-2675.
Reinhardt, U. E (1991). Breaking American health policy gridlock. Health Affairs, 10(2), 96-103.
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