The Problem of Decreased Medicare Payment, Essay Example

Introduction

Within the USA there have been increased concerns on the implications of decreased Medicaid / Medicare payments to health organizations and other stakeholders.  In particular how Government subsidized healthcare impacts patients. A stakeholder analysis is as follows:

The Patients

Statistics have shown that those patients that use government funded health care programs are normally from low income families and have low medical insurance coverage.  In recent years the situation in Canada, where they have a national health care scheme, was hit by a flu epidemic and this resulted in the system being overwhelmed.  Emergency rooms were closed and an 18-year-old boy died after being refused admission. Although the national health systems in Australia, Canada and the UK are supposed to create a more equitable environment for patient medical care, nevertheless they have not been without a degree of criticism. Much of this is based upon modernity and having the ability to have modern technology and equipment to provide first class patient care.  Quality standards have equally been criticised and this has been attributed to lack of funding. Other issues of nationalised health systems relate to long waiting lists, quality of care, limited physician choices etc.  (Tanner, M. 2008).

Healthcare Organizations

There are numerous financial implications to the Healthcare Organizations resulting from the Government delaying reimbursement of Medicaid.  Amongst the most severe is the cash flow strain it places upon the healthcare organizations. It is essential for any business organization to keep track of its cash flow. This essentially provides a snapshot of how the organization is performing and the status of its liquidity from a cash inflow / outflow perspective. An examination of revenue vs. operating performance provides a good indication of the health and viability of the business.  (Grant Thormton, 2011). If the Healthcare organization enters the degree of financial uncertainty that places them near bankruptcy, it is possible to see imminent warning signs i.e. inability to pay off debts, excess of liabilities over assets, poor cash flow. The Board of Directors of the Organization have a duty of care to the shareholders to try to protect the organization. Here it becomes paramount to get the financial affairs of the organization in order. This means reconciling the cash flow of the organization with the financial statements and taking whatever remedial action steps are required to remedy the measure.

Governments

Often Governments and State Authorities state that they are also underfunded and having cash flow difficulties, which often necessitates delays in reimbursement payments. Equally, the recession has often left them under resourced with insufficient labour to deal with the volume of administrative work being processed.  Certain States have indicated that the situation is likely to deteriorate further before the situation improves. (American Bankruptcy Institute, 2004)

Conclusions

The concept of the USA shifting to a National healthcare system may not be the magic panacea that everyone is hoping for.  Whilst everyone would like to see more equity in the system and improved access of healthcare for all levels of society, nevertheless there is a serious funding program that needs to be dealt with.  Increased levels of investment are required to improve the operational service levels in Hospitals, improved payments for Doctors and Nurses so as to retain the top medical practitioners and perhaps the need to deal with sociological problems that impact the health sector, thereby placing a strain on resources, i.e. substance abuse, criminal behaviour etc.

Works Cited

American Bankruptcy Institute. (2004). Latest developments in health care bankruptcies. Washington DC: Carribean Insolvency Symposium.

Grant Thormton. (2011). Hospitals in distress: What boards of directors need to know. Retrieved 7 25, 2011, from Grant Thornton: http://www.grantthornton.com/portal/site/gtcom/menuitem.8f5399f6096d695263012d28633841ca/?vgnextoid=be15c7d838101310VgnVCM1000003a8314acRCRD

Tanner, M. (2008). The Grass Is Not Always Greener. Policy Analysis Iss 613, 1-48.