The Economic Challenges in the USA Health Care Industry
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Introduction
The endlessly divisive question of how to provide health insurance to the tens of millions of Americans who now lack it has been at the forefront of political debate for decades (Wood, 2011). The capacity to execute cost-effective programs, maintain efficient services and operations, employ and train personnel, and support other healthcare efforts is hampered by the many complicated difficulties to which modern leaders must find solutions.
Organizational survival in the healthcare industry depends on the foresight of seasoned executives who think ahead of potential problems. Healthcare executives must prepare for a deluge of issues over the next five to ten years, including legislative and regulatory shifts, advances in technology and medicine, funding, and ethical and educational difficulties. Leaders must know that a slew of problems might quickly drain resources for medical study, hospital upkeep, equipment repairs, and training new operators. Data shows that new control, programming, and support issues will arise as technology advances. To successfully inculcate new systems, leaders must educate themselves, their staff, the vulnerable public, and the community on how to best use cutting-edge methods, tools, and techniques. In this article, we will focus on rising healthcare costs as an economic issue facing the healthcare industry in the United States and provide a proposal for overcoming them.
A Detailed Description Of Rising Healthcare Costs And The Research Process Conducted.
The demand for health care and the associated expenses are rising as more people choose healthier, longer, and physically active lifestyles. The United States has seen a substantial rise in healthcare prices over many decades. Healthcare expenditures in the United States increased by almost $1 trillion between 1998 and 2016, according to a study published in JAMA in March 2019. (AMA, 2020). According to the report, the total healthcare budget in the United States in 2018 was $3.7 trillion. It is projected that by 2028, such expenditures will reach $7 trillion. This research suggests that the growing and aging population contributes to the high price of medical care. When the population increases, healthcare expenses rise because people are living longer and longer. Researchers also found that increased rates of chronic diseases contributed to rising healthcare expenses, with diabetes accounting for the most significant percentage increase in costs throughout the study period. Rising health insurance rates and the price of ambulatory care are other contributing factors (AMA, 2020). The government’s inadequate policies are to blame for all of these problems. As a result of government healthcare assistance programs like Medicaid and Medicare, hospitals have been able to charge higher rates. Due to the ever-increasing expense of medical treatment, an increasing number of individuals are opting out of medical care and dying of preventable causes. People worldwide, especially those from marginalized communities, are struggling at home.
The Most Significant Economic Effects Of The Rising Healthcare Costs.
As a consequence of the ever-increasing expense of medical care, an increasing number of individuals are opting out of receiving treatment and endangering their health in the process of doing so. Many people, particularly those who belong to minority groups, are enduring hardship in their homes. This has generally produced healthcare disparity between the majority and the minority since those with low incomes or persons from minority groups do not have access to good quality treatment due to their lower incomes (AMA, 2020).
In addition, the fast expansion of the healthcare industry and allied fields, as well as the job opportunities and wages for their employees, is an inevitable consequence of increased healthcare expenditure. Anecdotes support this theory. According to a recent piece in Business Week, the healthcare industry, including ancillary businesses like pharmaceuticals and health insurance, has generated 1.7 million employment since 2001, while the number of private sector jobs outside of healthcare has remained flat during the same period. Local employment markets in the northeast, midwest, and south, which have been impacted hardest by globalization and the decline of manufacturing, rely on healthcare spending of more than $2 trillion annually.
Specific Strategies Relevant Entities/Stakeholders May Use To Address Rising Healthcare Costs From An Economic Perspective Supported With A Rationale For The Strategy.
The high expense of health care in the United States is a serious concern for families and companies. The most significant factor is that the United States has a substantially greater incidence of chronic illnesses than other wealthy nations. This implies that the number of Americans requiring treatment for ailments like heart disease, diabetes, and cancer will rise, and the associated costs will rise.
The high cost of health care in the United States may be reduced in many ways. The first is to manage better and prevent chronic illnesses. To achieve this goal, we must expand access to primary care, raise the bar on the quality of care provided, and boost the use of therapies supported by scientific evidence (Abelson, 2016). Similarly, improving the effectiveness of the healthcare system is another strategy for cutting costs. We may use information technology to achieve this goal, cut expenses associated with medical tests and procedures, and enhance care coordination.
Altering healthcare financing is a third strategy for cutting costs. A significant chunk of the overall cost of medical treatment in the United States is covered by private insurance. As a result, insurers have a financial stake in maintaining low rates. Healthcare systems in nations like Canada and the U.K. are publicly funded.
The government will benefit monetarily from maintaining low prices. The high cost of healthcare in the United States might be reduced in various ways. The first and most crucial step is developing a thorough plan that incorporates all the aforementioned components. In addition, it will be crucial to put the plan into action to maximize efficiency and output. One approach would be to study nations’ experiences that have already succeeded in lowering their healthcare costs (Abelson, 2016). For instance, the healthcare system in the Netherlands is very effective and has helped bring down healthcare costs. The United States may take a page out of the Dutch playbook and adopt some of its policies.
Ways, The United States, Can Apply Economic Best Practices From Other Countries To Support The Strategies For Addressing The Rising Healthcare Costs.
The healthcare system in Cuba is the most cutting-edge and effective in the world. This is because, in contrast to the United States, Cuba considers good health a fundamental human right, which means that access to quality medical care is a top priority in the country. The fundamental focus of Cuba’s healthcare strategy is on disease prevention, primary care, community service, and the active participation of all Cuban citizens. However, despite the obstacles presented by the economy, a very high ranking was achieved on key healthcare measures as a direct consequence of this effort. The example of Cuba challenges the assumption that delivering high-quality healthcare to all citizens requires significant amounts of money and demonstrates the influence that ideological commitment and policy choices have on the delivery of treatment to patients (Iatridis, 2016). By ensuring that health care is a national priority, not an individual one, the United States may utilize Cuba as a model to develop sensible and advantageous health care policy. Cuba is an excellent resource for the United States in this regard. It should abolish all economic and social barriers to accessing medical care for those who need it, regardless of class, and lower costs so everyone can afford it. In general policy, the United States should follow Cuba’s lead and implement universal health coverage to circumvent all the difficulties associated with health care outlined above. Because of this, it will be possible to guarantee that all people in the United States will have access to the necessary medical treatment without worrying about how they will pay for it.
The likelihood of the government and the private sector effectively addressing the issue.
Transparency in the price of pharmaceuticals and healthcare services is one strategy for lowering these costs. Presently, providers may charge patients whatever they want since there is no standardization of costs. Patients would be better able to compare rates and choose the most cost-effective options for their healthcare if they had a clear picture of the whole cost of their treatment.
Increasing healthcare productivity is another approach to the problem of healthcare’s ever-increasing price tag. Due to its disjointed nature, the United States healthcare system sometimes causes patients to undergo unnecessary operations twice and hinders collaboration among doctors. The disjointed system drives up prices and lowers standards of care.
Promoting preventative care is a third strategy for controlling healthcare costs. The U.S. healthcare system is geared more toward disease treatment than disease prevention. This method is expensive and ineffective in improving population health.
Furthermore, the demand for healthcare services, and hence the expense of healthcare, may be lowered by promoting preventative care. Government and commercial organizations are both trying to lower healthcare costs. Some laws, like the Affordable Care Act, mandate that health insurers pay for preventative services. It is not only the government or nonprofits trying to make the healthcare system and its associated costs more transparent and efficient.
References
Abelson, R. (2016). Health Care Issues Loom in Politics, Payments, and Quality. Retrieved on June 20, 2020, from https://www.nytimes.com/2016/11/15/business/dealbook/health-care-issues-loomin-politics-payments-and-quality.html
AMA. (2020). Trends in health care spending. Journal of the American Medical Association.
Retrieved on June 20, 2020, from https://www.investopedia.com/insurance/why-do-healthcare-costs-keeprising/#:~:text=The%20Bottom%20Line&text=Increasing%20costs%20for %20medical%20services,out%2Dof%2Dpocket%20costs.
Iatridis, D. S. (2016). Cuba’s health care policy: prevention and active community
participation. Social Work, 35(1), 29-35.
Wood, C. (2011). The U.S. Healthcare Debate: A History and Implications. International
Relations. Retrieved on June 20, 2020, from https://www.eir.info/2011/07/29/the-us-healthcare-debate-a-history-and-implications/