The Health Care Market Essay Example
THE HEALTH CARE MARKET
Access to health care services varies from state to state. In the U.S, healthcare services have tremendously evolved from a predominantly volunteer or charitable system where patients paid little or no money at all to business entities (Ameringer, 2008). The healthcare industry is now one of the largest industry employing over 13 million workers with a projection to increase by 5 million by 2015. According to Ameringer, its very unfortunate that the health system problems lie with delivery system that drives low quality and inefficient care in a country filled with latest technological advancements and skilled health care professionals. Health care professionals working in the same area and on same patients are not connected. Current private and public healthcare payment model each contains its set of rules and payment methods that further degrade the health care delivery system (Ameringer, 2008).
The major determinants of health care delivery system is the cost that is associated in delivering the health services. Health plans and policies pressured insurers and hospitals to cut costs and lower payment rates to assume the financial risks for patient’s care (Organization, 2013). Insurers later abandoned the tightly managed care practices and created a broad provider network, which targeted employer-sponsored insurance. This ensured the health providers were covered from the cost of offering the healthcare services. Another strategy that was employed by the health care providers was shifting the attention from wholesale health services to retail services, preferring to deal directly to the patients on the basis of the latest technology and amenities. Private health provider conquered the hearts of many patients in terms of the trust and better health services, and this led to an alarming rise in the cost of providence.
The main competitive forces in the health care delivery system focus on value based competitions. The value for patients and not just lowering the cost of health care services but the competition should be a result oriented. The competition should be centered on medical conditions throughout the full life cycle of health care delivery. In addition, the cost of high-quality care should be less expensive. The value of health care service delivery should be driven by provider scale, learning and experience at the medical condition level. The height of competition should not only be local but national and regional. Information on delivery services should be widely available, with creative innovations on medical research be handsomely rewarded to promote more bright ideas.
The level at which healthcare services are rendered determines the cost and prices of the services. An insurer offering excellent services with highly skilled medical personnel tends to offer higher medical prices for its services more than the average health care insurer. The supply and demand of services are more affected by the service delivery. For instance, if the services offered are good, and the cost is low, the supply and demand of the healthcare services will be high.
The quality of care is determined throughout the full life cycle of healthcare delivery. Issuers offering high quality of services accompanied by skilled professional in the field will always have the best quality of care. The level of health care consumer or patients is always high on areas with good quality services as this entrust the patients with better services provided and a quick response to their ailments. The variety of services offered, a high number of patients requesting their services and the cost of services can compensate providers. If the service delivery is good and the cost is low, more patients will flock the healthcare, and that will compensate the providers in terms of more payments done.
Managed healthcare is a system of health care delivery that is managed by a company whose main aim is to act as an intermediary between the health service providers and the patients. It was introduced with the intention to avoid paying for unessential services and facilities directly to health service providers. The main aim was to see quality and cost effective services rendered to patients at affordable prices without limiting or restricting the patients choice of physicians or the physicians limiting their fees. This helped in monitoring the cost-effectiveness of services being utilized. HMOs provides preventive and integrated care services to voluntarily enrolled families and business entities with low insurance covers on their network of hospitals and doctors that belong to the organization. Families were offered the chance to have a personal doctor or physician which they could not afford if they seek medical services on their own.
HMOs has help revolutionized the health sector in curbing emergency cases especially cases related to infants, childbirth and pregnancies and access to specialty care for children chronic illness. As enrollment increases in HMOs, so is the need for methodological sound studies on the effect of these arrangements on the health outcomes.
The main disadvantages of HMOs is that not all enrollees utilized the services of HMOs. Some HMOs consider pediatricians for children but are associated with higher primary rates per visit. In addition, before a diagnostic service or seeing a specialist, a referral is required, which is not covered with the HMOs. This is quite a disadvantage as all, or most of the costs will be catered for by the individual while the main aim of enrolling to HMOs was to lower cost. According to recent studies, when provider payments are capitated, HMOs are linked to a decrease in preventive visits.
The other major disadvantage is the rate of uninsured and the underinsured people. The uninsured are not under any medical cover, and the underinsured have limited coverage that do not shield them from additional cost. The managed Care seem to favor the insurance carriers more than the patients or the health providers. Providers take a huge risk and have to participate in the insurance plans for their business to succeed (Halverson, 1998).
The limitations on HMOs are less compared to the numerous advantages it has. The disadvantages can be in that HMOs offer little few doctors in which patients can choose from, the possibility of under treatment, restricted coverage, and compromised privacy. HMOs affects nursing by creating significantly few jobs openings for the registered nurses creating a vacuum of unemployment for qualified nurses. In addition, there is a rise in use of advanced practice nursing and non-acute health care settings.
The health care system’s financial incentives are not geared to offer rewards to efficient and effective medical care. The payment system offers fee for service and the hospitals; doctors and service providers are for the services rendered. Unfortunately, when the health care is efficient, all the savings go back to the federal government, the insurance company and the player rather than a hospital. The total amount in dollars spent on health care in the US reached $2.6 trillion or $8402 per person in 2012 (WHO, 2013). Consumers are attributed to lower expenditure as they continue to remain cautious on spending due to the loss of private health insurance, lower income, and fear of their financial future. The spending of physicians, prescriptions and hospitals are at their lowest. For the patients, this has amounted to a decrease in out of pocket expenditure and a decline in health care spending on overall growth.
Healthcare services expenditure has a slow response on recession, and this is because healthcare contracts and insurances are negotiated earlier or in advance. For instance, the slow response to the recent recession was attributed to several factors like loss of insurance, the unemployment rate and lowest inflationary adjusted income in several years (Getzen & Allen 2007) The labor force has an effect on the healthcare system, educating and training health care workers and offering them incentives like favorable work conditions, occasional trips and retreats offer the healthcare an advantage to perform better.
The healthcare industry offers many opportunities in terms of job opportunities and Physicians are well paid in the fields of surgery. According to recent research, the amount of money offered to doctors and physicians is considered peanuts to what they undergo in their respective fields. Proper incentives and reviews should be done to motivate another breed of doctor and physicians. Emergency of new social and lifestyle diseases calls for new research and proper funding.
Capitation methods were popular in the early years of health reforms, a method of paying physicians for cost containment measures in the healthcare organizations. Recent study of the decline of the capitation in the recent years as a form of payment to for physicians was noted with facts and figures. More emphasis has been laid on the integration of different payment systems with the implementation of healthcare reforms. Restructuring physicians should include some form of capitation incorporated with other ways of payment.
Physician payment using capitation can be a more effective way of controlling healthcare costs because it allows for the prediction of costs for healthcare services more accurately by both the employer and insurer (Ger, 2011). When using the capitation method of payment, the medical delivery system is given the financial risk of caring for the patient. It is necessary for the health care system to have a cost accounting system, or develop cost information on each person paying and the service line prior to signing a capitation contract.
Health providers assume that for any insured people, the provider will be obliged to cover all health care services for a fixed amount for a member as per the capitation contract. The capitation contract could cover full continuum of services, including specialty physician visits, primary care physician visits, home health visits, acute hospital stays, tertiary physician visits and outpatient’s visits. The payment must be acceptable for both the insurer’s point of view and the delivery system or providers. The insurer is always limited by what the consumer can afford to pay for the health insurance services. In addition, the health care managers are to be informed of the per capita cost to the insured persons and compare the cost to what the insurer is per capita per month.
Ameringer, C. (2008). The health care revolution from medical monopoly to market competition. Berkeley: University of California Press ;.
Ger, P. (2011). Physician payment mechanisms an overview of policy options for Canada. Ottawa, Ont.: Canadian Health Services Research Foundation.
Getzen, T., & Allen, B. (2007). Health care economics. Hoboken, NJ: John Wiley & Sons.
Halverson, P. (1998). Managed care and public health. Gaithersburg, Md.: Aspen Publication.
Haugen, D. (2012). Health care. Farmington Hills, MI: Greenhaven Press.
Inequalities (The) a Resource Book. Geneva: World Health Organization.