Why Healthcare Economics Will Never Be the Same

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The video “COVID; why the economics of healthcare will never be the same“ highlights the long-term impact of COVID-19 on the healthcare industry. Glenn, the author of the video, depicts that the fee for service (FFS) reimbursement model is the basis of healthcare economics in the US (TEDx Talks). Under this model, hospitals bill patients based on the individual services they have rendered such as laboratory tests, treatment, consultation, or drugs given. According to the video, 70 percent of the hospital bills are paid by Medicare and Medicaid which are funded by the government (Glenn, 2020). These government reimbursement programs are disadvantageous as payments are non-negotiable. As such, hospitals have to contend with rising costs of operations – salaries and supplies – and decreasing income. Under the FFS model, healthcare systems can only generate revenue by increasing the number of patients they attend to (David Kaye et al.). As such, emphasis is placed not on the quality of care, but on the quantity. However, this video cannot be called a full-fledged analysis. It lacks justification, a theoretical basis, without which it cannot claim to be a complete study.

For more information, see “Economic Impact of COVID-19 Pandemic on Health Care Facilities and Systems: International Perspectives. It outlines the impact of the pandemic on health care and how decisions to eliminate it may affect the future. Evidently, the FFS has proven to create an unsustainable healthcare economics as it rewards volume as compared to value. The emergence of COVID-19 mirrored the flaws in the model, as hospitals suffered huge economic losses as the volume of patients seeking healthcare services reduced (David Kaye et al.). Ironically, healthcare systems had to invest more in their facilities to adjust to the rising numbers of COVID patients such as creating quarantine rooms, hiring backup personnel, and obtaining PPEs (David Kaye et al.). Taking this into consideration, value-based care would be an efficient reimbursement model for the FFS. It would focus on providing preventive and collaborative care, which would inevitably reduce healthcare economic burden.