Financial and Economic Issues in the Health Care Industry, Research Paper Example

Abstract

The objective of this work is to examine the financial and economic issues in the health care industry and how these factors will affect the career of the individual in the healthcare environment on a long-term basis. On March 23, 2010, President Barak Obama signed the U.S. healthcare reform law which is stated to be inclusive of “…measures aimed at making healthcare less expensive and more accessible, including upgrades to government-run Medicare and Medicaid” however, the reform of healthcare has been a contentious issue and most particularly over the option of expansion of social medicine and the manner in which there will be new requirements placed upon both the employer and the individual. (Johnson, 2010) Technology will significantly impact the career environment of the healthcare professional in the future as expansion and growth in technological capabilities at a rapid pace requires that healthcare professionals of the future not only acquire to maintain and grow their technological skills to assist them in their career in the healthcare sector. Many individuals will be working in settings other than the traditional healthcare setting either traveling or providing healthcare services in the home setting or even practicing from home via the Internet performing virtual consultations with patients or monitoring patients via technological applications while the patients and healthcare provider are each in their own home setting.

Examination of the Financial and Economic Issues in the Health Care Industry

Objective

The objective of this work is to examine the financial and economic issues in the health care industry and how these factors will affect the career of the individual in the healthcare environment on a long-term basis.

Examination of the Issues

The work of Edelheit (2008) states that a report released by the Kaiser Family Foundation revealed some “scary facts of where healthcare in the US is headed. The average yearly cost of health insurance for an American family is now $12,680. That, in some cases, is almost twice the average annual income that people make in some countries where medical tourism is a destination.” (Edelheit, 2008) In addition, it is reported that the average cost of healthcare in the United States is approximately $4,074 per year for a health insurance policy for a single individual with health insurance covering the family costing approximately $7976 per year. Individuals without health insurance coverage through their employer and who pay 100% of their health care costs pay approximately $12,680 per year. (Edelheit, 2008, paraphrased)

It is reported that 66% of US employers in 1988 with more than 200 employees made the provision of retiree health benefits compared to only 31% of employers providing that benefit presently. It is reported that the economic crisis in the United States is only worsening matters with large financial institutions failing and with others being bailed out by the federal government. (Edelheit, 2008, paraphrased) The work of Johnson (2010) entitled “Healthcare Costs and U.S. Competitiveness” reports that the U.S. spends approximately $2 trillion annually on healthcare expenses, “…more than any other industrialized country.” (Johnson, 2010)

The Organization for Economic Cooperation and Development (OECD), the United States spends “…two and a half times more than the OECD average, and yet ranks with Turkey and Mexico as the only OECD countries without universal health coverage.” (Johnson, 2010) According to some analysts, many businesses in the United States are globally less competitive due to rise costs of healthcare.

Addressing the Issues

On March 23, 2010, President Barak Obama signed the U.S. healthcare reform law which is stated to be inclusive of “…measures aimed at making healthcare less expensive and more accessible, including upgrades to government-run Medicare and Medicaid” however, the reform of healthcare has been a contentious issue and most particularly over the option of expansion of social medicine and the manner in which there will be new requirements placed upon both the employer and the individual. (Johnson, 2010)

More than 17% of the U.S. GDP was spent on healthcare in 2009, which is stated to be greater than the amount spent by any other developed nation worldwide. (Johnson, 2010, paraphrased) That number has been estimated by the Congressional Budget Office (CBO) to potentially rise to 25% by 2025 if there are no changes made to the current federal law. Held as the structural mainstay of the health insurance system in the United States is that of healthcare coverage funded by employers. (Johnson, 2010, paraphrased)

Competition Too ‘Broad’ and Too ‘Narrow’

The U.S. Bureau of Labor statistics reports that private employees in the U.S. with access to employer-sponsored health plans in 2006 was at 71% but the decline has been a quick descent and health premiums have risen to 114 percent over the last ten years. In fact, the term ‘competitive disadvantage’ is used to pinpoint the reason that employers do not provide healthcare. (Johnson, 2010) Johnston states that the solution is quite simply, improving value and it is agreed among healthcare experts that those with the most control over procedural and medication decisions have “little” if any incentive to control rising costs. Competition in the U.S. healthcare system is reported by Johnson (2010) to operate at the wrong level as per Harvard Business School Professor Michael E. Porter and Elizabeth Olmstead Teisberg, a professor at the University of Virginia’s Darden School of Business and authors of the book ‘Redefining Health care: Creating Value-Based Competition on Results’ competition is “both too broad and too narrow.” (Johnson, 2010)

The reason that competition is too narrow is “because it now takes place at the level of discrete interventions or services.” (Johnson, 2010) Competition is stated to be too broad since “…much of the competition now takes place at the level of health plans, networks, hospital groups, physician groups, and clinics.” (Johnson, 2010) The law attempts to improve competition through creating a ‘health insurance exchange’ for small businesses and individual buyers however, there is limited competition in the marketplace” with findings that individual plans will increase between 10 and 13 percent by 2016. (Johnson, 2010)

The Future Career Environment for Healthcare Workers

Attempting to predict the future environment that will characterize the healthcare worker’s career is difficult at best and this is because there is presently such a shortage of qualified nursing professionals to fulfill the needs in today’s healthcare organizations. In addition, there are a growing number of individuals without healthcare insurance however, illness and preventive needs continue for these individuals. There are many proposals for what work in alleviating the looming and rapidly advancing healthcare crisis and these are derived from professional, political, economic, and social arenas thereby all can be differentiated by the particular interests of each group offering such proposal.

Technology and the Healthcare Professional

Technology will significantly impact the career environment of the healthcare professional in the future as expansion and growth in technological capabilities at a rapid pace requires that healthcare professionals of the future not only acquire to maintain and grow their technological skills to assist them in their career in the healthcare sector. Many individuals will be working in settings other than the traditional healthcare setting either traveling orproviding healthcare services in the home setting or even practicing from home via the Internet performing virtual consultations with patients or monitoring patients via technological applications while the patients and healthcare provider are each in their own home setting.

Opportunities for Healthcare Organizations

There are many opportunities for healthcare organizations to reduce costs while expanding service provision if technology is properly utilized and if healthcare workers are educated and trained to utilize the latest technology in the provision of healthcare. The work of Masys (2002) entitled: “Effect of Current and Future Information Technologies On the Health Care Workforce” states “ Against a background of an explosively growing body of knowledge in the health sciences, current models of clinical decision making by autonomous practitioners, relying upon their memory and personal experience, will be inadequate for effective twenty-first-centuryhealth care delivery. The growth of consumerism and the proliferation of Internet-accessible sources of health-related informationwill modify the traditional roles of provider and patient and will provide opportunities for new kinds of employment in health-relatedprofessions.” (Masys, 2002)The future is uncertain for the healthcare worker however, a great potential exists but this potential requires collaboration among all stakeholders.

References

Edelheit, J. (2008) American Healthcare & The Economic Crisis – What Does it Mean for Medical Tourism? Medical Tourism Magazine. 12 Oct 2008. Retrieved from: http://www.medicaltourismmag.com/issue-article/american-healthcare-the-economic-crisis-what-does-it-mean-for-medical-tourism.html

Masys, D.R. (2002) Effects of current and future information technologies on the health care workforce.HealthAff (Millwood). 2002 Sep-Oct;21(5):33-41. Retrieved from: http://www.ncbi.nlm.nih.gov/pubmed/12224907?dopt=Abstract

Johnson, Toni (2010) Healthcare Costs and U.S. Competitiveness. 23 Mar 2010. Council on Foreign Relations. Retrieved from: http://www.cfr.org/publication/13325/healthcare_costs_and_us_competitiveness.html