This paper examines the economic implications of healthcare reform in the United States, with particular emphasis on the challenge of controlling rising costs. It identifies the primary sources of financial strain on the system, including inefficiency and fraud within Medicare and Medicaid programs, as well as the substantial economic burden posed by preventable, hospital-acquired infections. The paper then surveys key cost-reduction approaches, including CMS reimbursement policy changes and audit mechanisms such as the Recovery Audit Contractor program. The analysis concludes that effective reform requires a comprehensive, multi-pronged strategy that addresses systemic flaws while acknowledging that no single intervention is sufficient on its own.
The paper demonstrates effective use of evidence-based policy analysis. Rather than making broad normative claims, the author anchors each argument in cited data and real institutional examples, then uses those specifics to build toward a broader conclusion about the insufficiency of piecemeal reform. This technique — moving from the particular to the general — is a hallmark of strong analytical writing in public policy and health economics.
The paper is organized into four substantive sections following a classic problem-solution framework. The introduction establishes the urgency of healthcare cost control. The next two sections diagnose the problem, first examining fraud and inefficiency in Medicare and Medicaid, then focusing on preventable costs from nosocomial infections. The fourth section surveys cost-reduction tools already in use. The conclusion synthesizes these threads, arguing that no single solution is sufficient and that broad systemic reform is required.
Controlling costs is one of the most important issues in American healthcare. Currently, approximately 50 million Americans cannot afford health insurance because of its cost, and that cost is largely a function of the ever-increasing price of healthcare services themselves (Reid, 2009). The government is also burdened by the exorbitant cost of healthcare, substantially because of its obligation to reimburse a large volume of services furnished to Medicare and Medicaid beneficiaries. It is projected that without significant reform, healthcare costs will reach 40% of GDP very shortly (Kennedy, 2006; Reid, 2009).
Since their inception, Medicare and Medicaid have been a tremendous source of necessary economic assistance to millions of Americans, particularly the elderly and the poor. However, by sheer virtue of their size and the number of beneficiaries and healthcare services involved, both programs have been notoriously plagued by inherent inefficiency and fraudulent actions by individuals intent on taking advantage of those systemic inefficiencies for personal gain (Kennedy, 2006; Reid, 2009).
More specifically, the programs lose billions of dollars annually because of reimbursement payments for ineligible individuals, or for unnecessary or redundant services, and because of outright fraud perpetrated by sophisticated schemes created for the sole purpose of extracting money from those programs for services never actually furnished to any patient (Kennedy, 2006; Reid, 2009). According to the U.S. Department of Health and Human Services Office of Inspector General, combating such fraud and abuse remains a central priority in protecting program integrity.
Furthermore, a tremendous amount of public money is wasted by federal and state healthcare reimbursement programs as a result of preventable disease caused by poor adherence to standard medical protocol and other forms of negligence in the healthcare community. For example, prior to 2007, there were approximately one million confirmed cases of hospital-acquired ("nosocomial") infections in American hospitals and other healthcare institutions — including clinics and nursing homes — resulting in the premature and preventable deaths of nearly 100,000 patients who would otherwise have survived the illnesses or surgeries for which they originally received treatment (Reid, 2009).
Ultimately, effective healthcare reform will require a broad approach in which resolving all of the inherent systemic problems within the largest government reimbursement programs is a necessary but insufficient component in and of itself (Kennedy, 2006; Reid, 2009).
You’re 67% through this paper. Sign up to read the remaining 1 section.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.