11 minutes ago
Jessica Dunne
RE: Discussion – Week 3
COLLAPSE
Top of Form
NURS 6050C: Policy and Advocacy for Improving Population Health
INITIAL POST
Economic Challenges of Healthcare Policy
The economics of the healthcare system in the United States is complex and fragmented. Costs associated with care and the prices healthcare consumers pay are determined by a wide variety of factors making it extremely difficult to find a one size fits all solution. Knickman and Kovner (2015) argue that healthcare is neither a commodity or a service, because of the high variabilities in need, cost, and consumption. The United States spends 80% of all healthcare revenue on just 20% of the population. Health insurance can be provided by the government, the private sector, or an employer. Some citizens do not have any form of healthcare coverage. Regardless of type, insurance coverage generally only pays a portion of the total healthcare cost leaving the consumer to pay the remaining balance. Moreover, reimbursement standards differ for facilities and providers. The government reimburses healthcare facilities, such as hospitals a fixed amount per patient, which creates a higher incentive to work efficiently. Healthcare providers, on the other hand, are reimbursed based on a fee for service model, meaning the more services they provide, the more money they are reimbursed (Knickman & Kovner, 2015).
Reindart (2010) maintains the passage of the Affordable Care Act (ACA) created more strain on the system by adding approximately 30 million uninsured Americans to the market. The projected cost to provide such coverage is around 8 billion to 1 trillion dollars over the next decade. However, the estimated expense of healthcare with no legislative intervention is 35 trillion dollars over the next decade (Reindart, 2010). Laureate Education (2012) contends that the human resources required to provide healthcare to an additional 30 million people is another consideration the ACA does not address. The United States is already experiencing staff shortages for key healthcare jobs like nurses and physicians. Additionally, with baby boomers retiring from the workforce and simultaneously needing more healthcare resources as they age will inevitably exacerbate the shortage of providers (Laureate Education, 2012).
Ethical Considerations
It is important to recognize that the private sector often follows the public sector when deciding what services will be covered (Knickman & Kovner, 2015). Therefore, the implications of Medicare deciding not to pay for a drug or service will likely affect the entire population. Stein (2010) asserts that cost should not be a consideration in determining if medications or services will be paid for by Medicare. Nonetheless, that is what happened with Provenge, a vaccine indicated for late stage prostate cancer patients. The drug prolonged the lifespan of patients by about four months. Provenge costs around 93,000 dollars per patient, making the cost-benefit analysis by Medicare ethically controversial. Medicare officials did not specify cost as an issue, but cancer researchers, patients, policymakers, and advocacy groups noted such concerns by pointing out that cheaper interventions do not face the same level of scrutiny (Stein, 2010).
While it is ethically impossible to place a value on human life, money saved by Medicare on more expensive drugs like Provenge will serve other patient needs. According to Keliddar, Mosadeghrad, and Jafari-Sirizi (2017), the idea of healthcare rationing, is not a new concept, but rather a newly recognized within the public sphere. Implicit rationing occurs within the healthcare system. Resource allocation is commonly decided by physicians, patient, and families. Additionally, implicit systemic healthcare rationing exists in the form of high deductibles, copays, and denials of coverage to deter consumers from choosing expensive health services. It was not until the 1990s that healthcare rationing became an open systemic phenomenon. When healthcare is a human right, resources must be equitably accessible, therefore allocation of healthcare resources are now a public issue. To ensure equal accessibility to care, it is necessary to limit some services to some people to maintain adequate resource allocation (Keliddar, Mosadeghrad, & Jafari-Sirizi, 2017).
Policy Reccomenations
The passage of the ACA has increased the demand for healthcare resources but did not increase the supply of resources required to meet those needs. According to Ransom and Olsson (2017),
Healthcare resources are defined as all materials, personnel, facilities, funds, and anything else that can be used for providing health care services. Health care has long been a limited resource for which there has been an unlimited demand; everyone needs health care. (para. 3)
Healthcare resources in the United States meet the needs of 20% of the population. Meaning 80% of the population pays for in some way, but does not have access to healthcare resources. This current path is economically and ethically unsustainable. Moreover, the highly individualistic culture in the United States, and partisan political rhetoric further compounds the rising tension between cost and care.
The complexity of financial reimbursements in the United States is counterproductive. Healthcare facilities are financially incentivized to work efficiently to reduce costs, while providers are encouraged to maximize services through the fee for service model (Laureate Education, 2012). There is also unnecessary competition between the private and the public sector as different rules apply to each. Policy makers are facing tough challenges with no simple solutions. An essential first step is to streamline reimbursement payments for facilities and providers with fixed rates to incentivize efficiency and reduce wasteful spending. Unfortunately, not all healthcare providers are not inclined to support such a change because it could limit their earning potential. But, such policy changes would help to deescalate the tensions surrounding the cost of healthcare.
The passage of the ACA has increased public awareness of healthcare rationing and resource allocation. However, this type of rationing has always existed, but only implicitly. It is imperative for healthcare consumers to understand the costs of healthcare, the scarcity of healthcare resources and the need for common sense reforms to ensure equitable accessibility of care to all citizens. Future policy should aim to reduce wasteful spending by increasing care coordination, and preventative care, decreasing duplication of services, and standardization of reimbursement rates and the electronic health record (Knickman & Kovner, 2015). Additionally, policy that incentivizes students to choose healthcare careers such as reduced tuition or loan repayment should be considered. Improving work environments for healthcare providers could also entice more people to choose healthcare careers and help to alleviate the shortage of providers.
References
Keliddar, I., Mosadeghrad, A. M., & Jafari-Sirizi, M. (2017). Rationing in health systems: A critical review. Medical Journal of the Islamic Republic of Iran,31(1), 271-277. doi:10.14196/mjiri.31.47
Knickman, J. R., & Kovner, A. R. (Eds.). (2015). (11th ed.). New York, NY: Springer Publishing Company. References
Laureate Education (Producer). 2012). Healthcare economics and financing. Baltimore, MD Author
Ransom, H., & Olsson, J. (2017). Allocation of Health Care Resources: Principles for Decision-making. Pediatrics in Review,38(7).
Reindart, U. E. (2010, Jan 20). State of the nation (a special report): Voices-A good start. The Wall Street Journal, p. R5
Stein, R. (2010, Nov 08). Review of prostate cancer drugs Provenge renews medical cost-benefit debate. The Washington P