Healthcare Economic Issues Presentation, Research Paper Example

The US healthcare system has been receiving considerable criticism in the recent past partly because of the implementation of the Affordable Healthcare Act, also known as Obamacare. A sizeable section of the criticism can be attributed to the finances involved in the project. Some critics opine that dedication of public funds to the project does not make economic sense. There are numerous challenges that face the health sector some of which are economic. This outline presents an overview of economic issues that affect the US healthcare system.

Sources of Funds

US spent 17.9% of its GDP on healthcare, approximately $2800 Billion

Most of the funds are used to fund recurrent expenses.

Funding has not changed much yet costs are on a steady rise driven by the desire for more efficient health services.

There is increased pressure on the US government to fund other priority areas such as security, threatening the need to use up to 20% of the GDP on healthcare by 2020.

Alternative sources of funds necessary to cater for other requirements such as quality

Should break the 50/50 ratio between government and the private sector by sourcing for more funds from the private sector.

Economic challenges are discouraging employers from providing health packages to their employees. The few who provide such packages limit them to the employees and not their families as has always been the norm (Cameron, 2013).

Health Insurance

Ability of insurers to provide services is dependent on the state of the economy.

Only affluent Americans make personal efforts to seek insurance cover (most are either funded by the government or employers)

Most insurance packages accessed by the majority are insufficient (cover limited health issues)

More than 15% of the American population have not access to health insurance at all. They find the premiums too costly.

This means that many Americans have to dig deep into their pockets to settle their medical bills, some of which run into thousands of dollars especially for terminal illnesses. The result is that many Americans drain their wealth on health related issues, making them bankrupt; hence, making it harder for other members of their families to access healthcare and other basic needs (Health Care Problems, 2014).

Managed Care

Desire for managed care is rising in the US

There is a push to base and cost health services based on the quality of services offered rather than quantity e.g. the rate of success rather than the number of patients attended to.

Managed care is more desirable but the cost is high, straining limited resources allocated to the health sector.

Mode of measurement for quality in managed care is not definite, posing a challenge in the quantification of the economic values of services (there is no standard measure).

Economic Evaluation of Health Services

Economists should work together with health professionals to establish proper means of establishing the effects of the economy to the healthcare sector and vice versa.

Proposals have been made for social marginal cost and social marginal benefit curves to replace traditional demand and supply curves used in business.

Benefits should not be quantified monetarily but rather based on life-years saved (this is quiet challenging as it is highly subjective).

Rebecca Thiess (2012) states that increase in cost is more of an economical issue than a budget issue. Thiess opines that the major undoing of the healthcare system is the disorganization and inefficiency that exists within its structures. This can be addressed by making the system efficient, thus eliminating unnecessary costs. Thiess argues that this would eliminate most of the economic challenges the health sector is facing both in the short and long run (Thiess, 2013).

Demand for Health Services

The US economy is recovering from the 2009 economic meltdown at a steady rate. The booming economy is not only a prerequisite for sufficient funding, but also increased demand for quality healthcare. This demand puts a strain on the available resources including physical infrastructure, personnel, and pharmaceutical products.

Shortage of Health Professionals

There are insufficient numbers of primary healthcare professionals in the US. This means that less serious health problems are not addressed in time leaving them to evolve into major issues. It would be easier and cheaper to solve such health issues in their initial stages rather than wait for them to get to levels where they require the attention of specialists who are equally very few and strained with huge numbers of patients (Miller, 2012).

Policies

Despite the introduction of several legislations to manage the US healthcare system such as the Affordable Care Act fronted by President Obama, there is a lot of uncertainty as far as cost management is concerned. The Centers for Medicare and Medicaid Services (CMS) has indicated that the new laws would lead to an increase of up to 311 billion dollars within the decade ending 2019.

The US government should come up with policies that will manage the provision of quality affordable healthcare while maintaining economic sense.

References

Cameron, C. (2013, March). Department of Economics. Retrieved January 23, 2014, from UCDAVIS: http://cameron.econ.ucdavis.edu/e132/Summary.pdf

Health Care Problems. (2014, January 23). Health Care Statisctics. Retrieved January 23, 2014, from Health Care Problems: http://www.healthcareproblems.org/health-care-statistics.htm

Miller, J. (2012, October 1). Issue brief: Health care. Retrieved January 23, 2014, from CBS NEWS: http://www.cbsnews.com/news/issue-brief-health-care/

Thiess, R. (2013, August 23). Rising health care costs are an economic, not a budget, problem. Retrieved January 24, 2014, from Economic Policy Institute: http://www.epi.org/publication/rising-health-care-costs-economic-budget/