Healthcare and economics: overall relationships and impacts

Healthcare Economics

Overall Healthcare And Economics

Healthcare economics: Current challenges from a nursing perspective

Although the subject of healthcare economics has been hotly-debated, on one issue there is widespread agreement: the aging of the population will substantively increase the demand for healthcare in the near and far future. As the population worldwide is aging and living longer, the need for essential services over a longer lifespan will generate more costs for an already-beleaguered healthcare system. "Just under a decade ago, senior citizens accounted for only 12% of the American population, according to the U.S. Census Bureau. By 2050, that figure is expected to grow to 21%" (Can the U.S. meet the aging population's healthcare needs, 2013, Wharton). A larger percentage of the population will thus be on Medicare, the federal government insurance program for the elderly -- which tends to compensate physicians at a lower rate of reimbursement than private plans. Demand to accept Medicare will grow even while physicians are increasingly resistant to accepting it. Additionally, the types of chronic conditions suffered by the elderly will generate greater demand for prescription drugs and other treatments to address their concerns.

However, despite the fact that all people are living longer, there is no sign that Americans in particular are living longer or 'better,' "health-wise, relative to other nations and the healthcare delivery system is riddled with inefficiencies. "Evidence shows that, despite the massive spend in the U.S. On health care -- 18%...there has not been a noticeable return in terms of life expectancy, at least not compared to other nations. "In fact, life expectancy is fractionally higher in the U.K., and they only spend 8% of GDP" (Can the U.S. meet the aging population's healthcare needs, 2013, Wharton). Clearly, there is a discrepancy between the type of care that is being offered and the actual needs of the aggregate patient population.

One reason for such inefficiency is the failure to treat chronic conditions early on with preventative care until conditions have become acute. More and more of the population as a whole -- not just the elderly -- carries excess weight and is likely to suffer the health consequences of doing so as a result. Obese people have greater healthcare needs, and given that there has been a rise in childhood obesity, the demand obese people place upon the healthcare system are likely strain the system for even longer periods of time. "At the individual level, obesity is associated with health care costs that average about 40% above those for normal weight individuals. Overall, obesity-related direct and indirect economic costs exceed $100 billion annually, and the number is expected to grow" (Economic cost of obesity, 2013, Yale Rudd Center). The healthcare industry will also be faced with the need to treat diseases linked to obesity such as heart disease, type 2 diabetes, and osteoarthritis as well as bear the health costs of diet medications and bariatric surgeries, and other subsidiary treatment costs linked to obesity that can produce adverse health consequences themselves. The strong correlation between obesity and poverty likewise raises questions of physician compensation and cost, given the lower rates of Medicaid reimbursement (the state government-administrated insurance program for those living beneath the poverty line).

Because of the patient-centered focus of the nursing profession, actual nurses have often remained on the peripheries of the administrative aspects of healthcare cost debate until recently. First and foremost, given the shortage of nurses, many institutions are seeking input about how to create cost-effective policies to attract new nurses. Nurses can act as advocates for the profession, pointing out that reducing staff often leads to costly medical errors that ultimately take a toll upon the finances of the institution, rather than bolster it. "Understaffing drives direct-care nurses from the profession, yet the deadly practice remains endemic" (Summers 2009). Greater funding is also needed to support nursing training that truly prepares nurses to enter the profession and to assume proactive roles in administering care. "Research shows that nursing residencies could save millions of dollars by keeping nurses in the profession, yet such residencies receive only 1/300th of the funding that physician residencies do. Nursing schools lack resources, so they turn away thousands of qualified applicants, despite projections that the nursing shortage will grow much worse" (Summers 2009).

Nurses are being called upon to perform many functions once relegated to physicians as nurses providing primary care is often a more cost-effective measure that can reduce waste yet still ensure high-quality care. Nurses with advanced degrees are being called upon to assume more complex duties within the healthcare system. They have also acted as advocates for cost containment within healthcare overall. A recent study of nurses conducted by the union of registered nurses National Nurses United blamed "skyrocketing hospital charges" as "major factor in driving up overall healthcare costs, and exaggerating a healthcare crisis nationally as increasing numbers of Americans are priced out of access to needed medical care or pushed into financial ruin or bankruptcy" (Nurses: Hospital price gouging driving up healthcare costs, 2013, National Nurses United). According to the NNU, improved technology and the demographics of the patient population have driven up costs, there are other bureaucratic and systemic costs unrelated to care that have also created a system burdened by escalating balance sheets with few signs that patients are actually benefiting. "Hospitals generally negotiate with insurance companies on payments. The higher the starting point on a charge, the higher the ultimate reimbursement" thus driving up healthcare costs overall (Nurses: Hospital price gouging driving up healthcare costs, 2013, National Nurses United). Concerns about 'making up' for the lower reimbursement rates of patients with Medicaid and Medicare exacerbate this practice.

Nurses have a role in performing preventative care which can reduce overall healthcare costs. One of the benefits of 'systems theory' which has dominated so much of nursing practice and theory in recent decades, is the stress on treating the whole person -- psychologically and spiritually, and providing care that is appropriate in a multicultural and economically sensitive fashion. For example, "the Neuman Systems Model views the client as an open system that responds to stressors in the environment. The client variables are physiological, psychological, sociocultural, developmental, and spiritual" (Betty Neuman, 2013, Theoretical Foundations of Nursing). Patients are both individuals but also part of a larger 'system' which affects their health status and needs and also the methods in which nursing education takes place at different points of care.