Health Care Economics
Medical Care is never free, although the individual may pay nothing?
Medical Care is both a commodity and a service. The process of consuming medical care has a cost, even if the after insurance price is zero to the consumer. For instance, there are hard costs that include the buildings, equipment and supplies that house the medical care or office. There are the wages that are paid for the administration and provision of healthcare, and a cost for every procedure, every drug, and every minute of healthcare operations. In an economy in which there is insurance coverage, costs are not static, but variable. The "cost" of something may be $100, but because of economies of scale and negotiations, the payment for that service may only be $60 once the insurance company has verified the claim. The individual may pay nothing of that if their firm pays their premium, or…...
This is being done by disseminating and using practice guidelines for various medical conditions and by profiling individual physicians' provision rates.
Demand side cost sharing is where patients must contribute more to their healthcare by paying more in copayments and deductibles. One recent advance in health care financing is the health savings account (HSA). These plans rely heavily on patient cost-sharing. An HSA basically provides health insurance along with a tax favored vehicle for savings. Consumers can use this money for qualified medical expenses during the current year or chose to save it for future medical expenses. They idea is that people will think twice before spending it, since spending it takes away from what they can save.
In my opinion supply side cost sharing is the best. There is so much waste and abuse that goes on in the health care industry that simply cleaning some of this up would…...
Besides the health care has strong externality influences than that of other goods and services. The cost of caring a sick person may entail heavy financial burden on the patient's family.
In the real world markets for other goods and services tends to approach towards market perfection that assumes a strict set of conditions such as, perfect information, several sellers and buyers, a uniform type of product and freedom to enter and exit that makes certain that the firms producing the goods and services are only price takers, which are producing at the lowest probable cost in the long run and only capable of earning normal profits. The market fails when the producers have the authority to considerably influence the price or the total amount of quantity being produced. Doctors and other suppliers of health care sometimes have such enhanced authority. Moreover, the healthcare faces the problems of risk and…...
health care economics. Terms: Quality, resources cost.
Quality, resources and costing health care
The modern day health care providers are subjected to incremental pressures. They are for instance required to best respond to the changing health care issues of the contemporaneous population, to the growing demands and expectations of the stakeholders -- patients, partners, the public, governmental and non-governmental agencies and so on (Wolper, 2004) -- and to do all of this with as little resources as possible. In other words, health care institutions are expected to maximize their output while minimizing their input.
In such a context, the health care community becomes focused not only on attending to its patients at a generic level, but also on attending to the multifaceted needs of the patients and doing so in a context of limited input. In other words, an ongoing focus of the modern day heath care community is on quality, resources…...
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References:
Wolper, L.F., 2004, Health care administration: planning, implementing, and managing organized delivery systems, 4th edition, Jones and Bartlett Learning
Institute of Medicine, 2003, The Richard and Hinda Rosenthal lectures spring 2001: crossing the quality chasm, National Academies Press
The health care sector in the United States is faced with a series of challenges given by the dynamic and changing features of the modern day society. Two notable challenges in this sense are represented by moral hazard and demand inducement. These are best explained below:
"First, because of the nature of insurance at that time patients demanded all medical services regardless of cost, even those offering an insignificant health benefit (moral hazard). Second, autonomous providers of the traditional health economy received fee-for-service payments. This creates the incentive for physicians to recommend the extravagant of treatments, even if those treatments are inappropriate to the patients condition (demand inducement)" (University of Canterbury).
In order to address these issues, the concept and practice of managed care have been introduced. The scope of this application is that of creating more efficiency within the health care provision sector. And based on…...
Health Care
The problem is that not enough physicians accept patients using Medicare as payment. In essence, many such physicians feel that the Medicare payouts are insufficient either for them to cover their costs, or to turn a reasonable profit on the transaction. obinson (2011) notes that public payer in general pay out at lower rates. The public payers are able to deliver volume to health care providers, and this gives them bargaining power, as one of the most significant payers, that allows them to lower their payouts. The problem for many providers is that servicing these clients essentially means a high-volume, low-margin business model. Not all health care providers can, or wish to, operate with this business model. As in any business, this model requires a high level of discipline, and it requires driving down costs throughout the business. Many physicians find the operating model incompatible with what they want…...
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References
Robinson, J. (2011). Hospitals respond to Medicare payment shortfalls by both shifting costs and cutting them, based on market concentration. Health Affairs. Vol. 30 (7) 1265-1271.
Economics of Medical Errors
Medical Error Economics
The 1999 Institute of Medicine (IOM) report To Err is Human: Building a Safer Health System pulled the curtain back on the dark secret of medical errors (Institute of Medicine, 2000). The best estimates at the time suggested that between 44,000 and 98,000 people were dying each year due to medical errors. A more recent study discovered that the current system of relying on voluntary reporting probably underestimates the annual incidence of adverse events by 90% (Classen et al., 2011). This new finding was based on experts analyzing medical records for anomalies that could potentially represent a serious medical error. The authors of this study concluded that nearly a third of all hospital admissions probably result in an adverse event because of medical errors.
The recent passage of the Patient Protection and Affordable Care Act (ACA) of 2010 contains provisions designed to eliminate disincentives for patient…...
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References
Andel, Charles, Davidow, Stephen L., Hollander, Mark, and Moreno, David A. (2012). The economics of health care quality and medical errors. Journal of Health Care Finance, 39(1), 39-50.
Classen, David C., Resar, Roger, Griffin, Frances, Federico, Frank, Frankel, Terri, Kimmel, Nancy et al. (2011). 'Global trigger tool' shows that adverse events in hospitals may be ten times greater than previously measured. Health Affairs, 30(4), 1-9.
Grober, Ethan D. And Bohnen, John M.A. (2005). Defining medical error. Canadian Journal of Surgery, 48(1), 39-49.
future of health care in the St. Louis area
This paper presents a detailed examination of the future of health care in the St. Louis area. Included in the paper are discussions about economics and population issues as well as changes hat are coming. The writer addresses many economic issues including good and services and resources in the health care industry currently as well as the future projections. There were 12 sources used to complete this paper.
The cost of obtaining health care in the United States has been the topic of tremendous controversy for many years. While some argue that the nation needs to go to socialized medicine similar to the Canadian delivery mode others believe America has the best health care system in the world if only the costs would become more reasonable. The St. Louis MO area is no stranger to rising health care costs. St. Louis is an…...
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References
Ron Ashworth And James Crane, COORDINATED PLANNING HAS FINALLY BEGUN., St. Louis Post-Dispatch, 04-02-2002, pp B7.
Judith VandeWater; Of The Post-Dispatch, SLU EXECUTIVE WILL BE DIRECTOR OF FOUNDATION FOR HEALTH CARE., St. Louis Post-Dispatch, 08-21-2001, pp B2.
Author not available, ST. LOUIS HEALTH CARE EXECUTIVE SWORN IN AS CHAIRMAN OF NATION'S LARGEST HOPSITAL ASSOCIATION., U.S. Newswire, 02-01-1999.
Author not available, RECENT EVENTS IN THE HISTORY OF PUBLIC HOSPITALS IN ST. LOUIS., St. Louis Post-Dispatch, 12-19-1999, pp B4.
history evolution health care economics timeline funding, defined terms; Inelasticity, Macroeconomics, supply demand, economics, microeconomics, gross dosmestic product • Include resources. • The paper -- including tables graphs, headings, title page, reference page -- consistent APA formatting guidelines meets -level requirements.
History of health care economics
Throughout the past recent years, the cost of health care has been amounting as a result of numerous social, economic and other categories of pressures, such as the aging of the population, the increasing living standards or the rapid advancement of technology. In this context, the cost of health care in the total gross domestic product is gradually becoming unsustainable for the country.
The economic interest of health care provision was first revealed nearly five decades ago, but at that stage, the analyses were conducted at a microeconomic level. They were taking into consideration limited economic variables and they generated results with a limited applicability and…...
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References:
Blumenschein, K., Johannesson, M., 1996, Economic evaluation in health care. A brief history and future directions, Pharmaeconomics, Vol. 10, No. 2
Cox, M., Pacala, J.T., Vercellotti, G.M., Shea, J.A., 2004, Health care economics, financing, organization and delivery, Family Medicine, Vol. 36
local hospitals have been criticized for charging greater fees for service to the uninsured than to those covered by insurance. While it is easy to understand the emotional reaction to this policy, it is difficult to provide any sound financial underpinnings for the brouhaha. Indeed, if were the hospitals to act otherwise, they would not only be violating several key, and easy to understand, economic principles. They would also be undermining future health care for these patients and all others, both currently and in the future.
Particularly taken to task for the fee differentials was The Advocate system, which serves "the most patients of any private health care group in the Chicago area, and treats more uninsured patients than any other private Cook County hospital system." (Handschel 2003)
No one has complained recently about a glut of doctors and nurses and other medical staff; on the contrary, the dearth of such…...
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References
Hantschel, Allison. "Latinos speak out against hospitals' price-gouging." 20 August 2003. Daily Southtown, A3.
An open letter to James Skogsbergh, CEO of Advocate Healthcare." 17 August 2003. Chicago Sun-Times, 30A.
managed care organizations use to reduce unnecessary utilizations? Which ones do you think are more effective?
After food, shelter and clothing, health services are a major human need. With the rapid evolution of the human civilization, and the increasing health awareness among the masses, the demands for health care services are increases. On the parallel end, the health sector today operates on corporate lines and many health care service providers operate their organizations as a for profit organization. These organizations have similar objectives as any other corporate firm, which includes, maximizing profits, increasing market share, eliminating competition or maintaining competitive edge and covering costs. Most of these for profit health care service providers stand out from nonprofits health care service providers due to the fact that they offer services that are otherwise not offered by the nonprofits service providers. Most of these health services are expensive at cost therefore prices…...
One of the issues with this program is that it creates a great amount of legacy costs, in that public employees still get full benefits after they retire, but don't have to pay into it,
With the implementation of the new Obama Health Care law the exact impact on Virginia will vary depending upon which course is taken and whether the federal reform proposal tries to cover the expenses or shift these expenses to the states. Experts have assessed the impact of a reform proposal that considerably expands government's role in the health care market by way of providing an extra $1 trillion in federal subsidies over the next ten years and tendering incentives to move present Medicaid recipients into a new federal health insurance program (the Prognosis for National Health Insurance a Virginia Perspective, 2009).
This type of program would:
augment national health care expenditures by an extra 8.9% by 2019
augment…...
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References
About Virginia. (2011). Retrieved January 26, 2011, from Web site:
AbstractThis weeks written assignment sought to identify what critical access hospitals (CAH) are, whether or not they are profitable, barriers to their profitability, and possible alternatives to CAHs. CAHs came into existence following the passage of the 1997 Balanced Budget Act (BBA) with the primary aim of increasing access to care in rural communities. Their distinguishing feature is the use of the cost-based Medicare reimbursement system as opposed to the traditional prospective payment system. The cost-based reimbursement system is where Medicare reimburses hospitals based on costs rather than at a standard flat rate. The subsequent sections of this text demonstrate that CAHs are not operating profitably despite running under the cost-based system. Most of them are operating inefficiently, incurring high costs for serving a relatively small number of patients. This text provides possible reasons for the high costs that characterize CAH and recommends the adoption of community outpatient hospitals as…...
Market concentration is the concept that allows different distributions of the shares of various companies’ production within a market. In other words, it is a measure of monopolistic phenomena that helps one to determine the extent to which a single firm has control or dominance within a market. Market power is the extension of this phenomenon and describes the ability of a company to raise prices as a result of its monopoly of the market (in a market where competition is fierce, prices are more likely to fall than they are to rise—unless there is collusion among firms).
Market concentration can be measured by the concentration ratio, which assesses the combined market share of the top companies within a specific industry; share refers to any relevant indicator, such as employment, sales, etc. The Herfindahl-Hirschman Index is one type of market concentration measure and is taken by squaring the percentage of market…...
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References
Cutler, D., Morton, F. (2013). Hospitals, market share, and consolidation. JAMA, 310(18): 1964-1970.Pope, C. (2014). How the Affordable Care Act fuels health care market consolidation. Retrieved from reform/report/how-the-affordable-care-act-fuels-health-care-market-consolidationhttp://www.heritage.org/health-care
Cost analysis methods, 2011, U.S. National Library of Medicine). This will give a picture of the efficacy of the drug, its financial costs, its impact upon society, and impact upon the patient. When a drug is new, data must first be accrued on the drug itself before it can be compared with similar treatments.
What type of economic evaluation should be used when comparing outcomes and costs of two diabetes therapies that affect both the severity of the disease and the survival rate? Why?
A cost-benefit analysis should be used. In this instance, the two therapies do not produce equivalent outcomes. This means a cost-minimization analysis that presumes equivalency cannot be used. The study's designers are not only interested in the costs of the treatment, but also the impact upon patient health, so cost-utility and cost-effectiveness analysis is not appropriate. Only a cost-benefit analysis provides non-quantitative information on the benefits to…...
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References
HTA 101: IV. Cost analysis methods. (2011). U.S. National Library of Medicine.
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