This paper explores two interconnected dimensions of U.S. healthcare reform. The first addresses financial policy, arguing that for-profit health insurance companies drive unsustainable costs and that replacing the fee-for-service compensation model with a results-based system — as used in Britain — would improve outcomes and reduce waste. The second examines healthcare information technology, drawing on clinical experience to show how computerized medication logging reduces administration errors and how data-driven compliance monitoring helps address systemic problems such as hospital-acquired infections. Together, these reforms are presented as essential steps toward a more efficient, equitable, and effective American healthcare system.
The current precarious and unsustainable economic state of the American healthcare system is substantially attributable to the dominance of for-profit health insurance companies within the industry (Kennedy, 2006). It is therefore remarkably ironic that so many individuals — particularly those in public office — blame public programs such as Medicare and Medicaid for being "bankrupt," when these programs manage to administer healthcare at approximately one-tenth the cost extracted as profit by the private healthcare industry.
While administration of public programs costs only approximately two to three percent of their total revenue, the private health insurance industry extracts more than thirty percent of the $2.2 trillion spent annually on healthcare in the United States (Kennedy, 2006). Therefore, the most obvious approach to reducing the runaway cost of American healthcare would be to eliminate — or strictly limit the maximum profits of — the private health insurance industry. Instead, healthcare lobbyists in Washington have effectively captured so many members of Congress that meaningful industry reform in this area has proven impossible to achieve.
The other principal change that would greatly improve the quality of American healthcare, reduce its cost, and most directly impact nursing practice would be a shift away from the ineffective and highly wasteful fee-for-service compensation model toward a results-based compensation scheme, such as that used in Britain (Kennedy, 2006; Reid, 2009). In addition to providing a meaningful incentive for healthcare providers to focus on outcomes, this approach has proven to be a highly effective means of reducing costs by disincentivizing duplication of services and other forms of economic waste in healthcare delivery.
More specifically, a results-based compensation approach increases physician efficiency by promoting a wellness-oriented attitude rather than a specialty-focused one that can substantially neglect overall wellness concerns. It also helps eliminate wasteful duplication — particularly in diagnostic testing — by holding prescribing providers responsible for unnecessary repeat testing, rather than simply passing those considerable costs along to third-party payers and public resources under government reimbursement programs. In essence, it incentivizes both wellness and economic responsibility (Kennedy, 2006; Reid, 2009).
"Health IT reduces medication errors in clinical practice"
"Data systems improve compliance and reduce hospital infections"
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