Financing The Failing U.s. Healthcare System

1515 WordsMay 6, 20157 Pages
Financing the Failing U.S. Healthcare System The three principle parties involved in the U.S. Healthcare system are the consumer, provider and insurer. The provider includes the hospitals, clinics, doctors, nurses and pharmacies that provides a service; the consumer is the individual who receives the medical service and supplies the money; and the insurer is a third party intermediary between the provider and the consumer which accept money from a pool of consumers and reimburse the providers. Like any transaction, there is a certain degree of risk associated for members of the different parties. This risk is based upon variables within the U.S. healthcare model including the method of, and who is reimbursing the providers. The method of reimbursement determines which party will bear the greater financial risk and can lead to an excess supply of medical services that drive up prices and provide no additional benefit to individual consumers because of producer and consumer moral hazard. To maintain a sound healthcare market government regulation is required in the current U.S. healthcare system because it would otherwise fail. The following paragraphs will discuss the methods and effects of reimbursement in the U.S. healthcare system, which party bears the financial burden, issues of moral hazard and cost control mechanisms, and the role of government regulation in the healthcare market. Fixed payments are pre-determined amounts that providers receive regardless of the
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