Cost Benefit Analysis Paper

As we advance in our healthcare system and continue to find cure for the deadly diseases we are also faced with prescription drug prices rising much faster than they were a few years back. Drug prices are increasing at an unmaintainable rate without any sign of reduction. People who are heavily affected by this rise are mostly elderly citizens and also the poor of this country because they can barely afford these expenses. These people either have no money to pay for their copays or no health insurances at all.

as defensive medicine practice, new technology, malpractice lawsuit and the uninsured. New technology is the biggest factor of the rising cost of healthcare to treated patient of their illness. New technologies have seemed to be the driving force of high healthcare cost in America. The technology accounts for 38 to 65 percent of healthcare spending in America (Johnson, 2011). The annual spending of health care increased from 75 billion in 1970 to 2.0 trillion in 2005 and is estimated to reach 4.0 trillion in 2015 (Kaiser Foundation, 2013). U.S. citizens spent 5,267 per capita for health care in 2002- 53 percent more than any other country” (2005). “America spent 5267 per capita and in Switzerland they spent 3074 per capita” about 1821 cheaper than ours (Starfield, B 2010). Controlling the technology isn’t easy thing to do because of technology prices are set by manufacturing and the installer of the new medical equipment’s. However, there other way

Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel.

American beliefs and values favor the development and use of new medical technology despite its cost.

Improvements in health care and life sciences are an important source of gains in health and longevity globally. The development of innovative pharmaceutical products plays a critical role in ensuring these continued gains. To encourage the continued development of new drugs, economic incentives are essential. These incentives are principally provided through direct and indirect government funding, intellectual property laws, and other policies that favor innovation. Without such incentives, private corporations, which bring to market the vast majority of new drugs, would be less able to assume the risks and costs necessary to continue their research and development (R&D). In the United States, government action has focused on creating the environment that would best encourage further innovation and yield a constant flow of new and innovative medicines to the market. The goal has been to ensure that consumers would benefit both from technological breakthroughs and the competition that further innovation generates. The United States also relies on a strong generic pharmaceutical industry to create added competitive pressure to lower drug prices. Recent action by the Administration and Congress has accelerated the flow of generic medicines to the market for precisely that reason. By contrast, in the Organization for Economic Cooperation and

Payment for services will determine the advancement of technology. Research for cures, disease prevention, and new medications are examples that humans value. The involvement of the CMS affects many health care organizations. Even with the new health care reform, costs continue to rise and there remains a lack of access to many.

When it comes to health care, cost is one of the biggest problems. Something needs to be done in order to make it possible for patients, families, and businesses to be able to afford health care. US does not always spend health care dollars in the most productive way. The cost of cancer treatments alone can cost up to hundreds of thousands of dollars, and the only way to pay for that is to raise the cost of the insurance to the patients. Cost is defined as the “price” of healthcare. The “price” or cost can come from various places such as, the physician’s bill, the cost of prescriptions, as well as what the employers pay to cover their employees. The cost of treatments, emergency room visits, medicines, the cost of newest technology and etc. is what is making our increase in cost rapidly. The rising costs leads to becoming a financial burden to families, even the ones that have health insurance, which can typically result in individuals not receiving the health services that they need.

The health care industry is relying on high-tech medical devices to care for the patients. In the article, “Pay for What Works” (2008), it is stated: “the U.S. also has trouble controlling the spending habits of a health care colossus that is on track to consume 20 cents of every dollar by 2015, a tripling from 1970 levels” (p.32).What they fail to realize is that years ago these advances in technology did not exist and patients were still diagnosed and cared for. Of course, we have medical equipment now that can help personal conditions that could not be treated before, but are we overlooking the cheaper, just as efficient ways? Why should surgery automatically be performed when there is a medication that can handle the problem first? No wonder why so many Americans cannot afford health

Healthcare spending growth rate trends show astounding estimates. Since 1960, spending has risen from $27 billion ($143 per capita, 5.1% pf GDP) to amazing $1,678.9 billion ($5,670 per capita, 15.3% of GDP, 2003 data) (HHS, 2005). Recent research estimated that by 2013, healthcare spending will be as high as 18.4% of the Growth Domestic Product. It is important to note that the gradual move from hospital to ambulatory setting has resulted in much higher spending on outpatient hospital services and prescription drugs. The spending growth for these two trends is much higher than the overall healthcare cost growth, which, in fact, increases faster than such important economic indicators as GDP growth, inflation growth, and population growth rates.

Medical technology encompasses a wide range of healthcare products and is used to diagnose, monitor, and treat diseases or medical conditions that affect humans. This may included but not limited too, pharmaceuticals, vaccines, and medical equipment. Such technologies are intended to improve the quality of healthcare delivered through earlier diagnosis, less invasive treatment options and reductions in hospital stays and rehabilitation times. Recent advances in medical technology have also focused on cost reduction. Medical technology may include medical devices, information technology, biotech, and healthcare services. The impacts of medical technology may involve social and ethical issues. For example physicians may seek objective information from technology rather than listening to subjective patient reports. A major contributor of healthcare expenditure in America is the advancement of medical technology. According to several studies it is shown that there is a correlation between the nation’s gross domestic product (GDP) and money allocated to healthcare. One of the leading theories is that medical technology is growing faster than expected.

The purpose of this paper is to explore the economic effects of Affordable Care Act (ACA) especially on the medical research and development (R&D). The impact of ACA on the following factors related to a Medical R&D is discussed.

The rise in costs of prescription medicines affects all sectors of the health care industry, including private insurers, public programs, and patients. Spending on prescription drugs continues to be an important health care concern, particularly in light of rising pharmaceutical costs, the aging population, and increased use of costly specialty drugs. In recent history, increases in prescription drug costs have outpaced other categories of health care spending, rising rapidly throughout the latter half of the 1990s and early 2000s. (Kaiseredu.org, 2012).

Recently, there has been a debate about the high prescription drug prices in the United States. Accounting for 9.7% of the national health expenditure, $329.2 billion was spent on prescription medications ($931 per person) in 2011 (Linton, 2014). So what exactly is the average American getting with their $931? Well, because there is an extraordinary amount of time, effort, and energy that goes into creating, manufacturing, and distributing a new drug, it’s no wonder the prices are so high. But what other costs are folded into the prices of your prescribed medications? This review looks beyond just the research and development costs needed to take a new drug from idea to shelf by examining several journals and other credible, secondary sources, to shed some light on how much pharmaceutical companies are spending to develop, advertise, and sell their drugs.

His study shows that research is actually not a large part in pharmaceutical spending. In fact, the majority of the money actually goes towards funding marketing budgets and realizing profits. His research also shows that almost all drug companies do not spend more than twenty percent of their funds on research. When it comes to profit, some drug and biotech companies are receiving fifty percent profits which is twice the average nine percent average profit margin. Another reason for drug prices being so high is because drug manufacturers in the United States set their own prices, and that is not normal for other countries in the world. For most other countries that have national health care programs, also have government entities that negotiate drug prices or decide to not sell drugs that may have unaffordable pricing. Sometimes state laws and other federal policies limit the generics ' abilities to keep costs down. For example, pharmacists in at least 26 states are required by law to get a patients consent before switching to a generic drug. This costs Medicaid around $19.8 million in 2006 for just one drug. Costs were running higher due to the fact that some pharmacists were not able to get the patient consent that they needed therefore Medicaid ended up having to pay for the costlier brand name drug even though a cheaper product was available.

As stated by Baker (2007), cost-benefit analysis in healthcare is an assessment of costs associated with a program or a medical treatment and contrasted to the potential outcome benefits, thereby given a monetary value as to whether a treatment is cost effective or not. I personally feel that cost analysis can be potentially both good and harmful depending on the setting. I have experienced firsthand the harm of cost analysis in the setting of telemonitoring of congestive heart failure patients. The patient's that were enrolled in the program were those that had private insurance and since it was a pilot program it was free to the patient. The patients were given a wireless Bluetooth blood pressure monitor and scale with access to APRNs monitoring