Health Economics And Antitrust Literature

The Iron triangle for healthcare consists of cost, quality, and access; these three characteristics when balanced create great healthcare. Managed Care Organizations combine the three to offer consumers with care that is appropriate for their individual needs. Our book describes managed care organizations as “the cost management of healthcare services by controlling who the consumer sees and how much the service cost” (Basics of the U.S Healthcare System, Niles). Taking a look at the history prior to the Health Maintenance Organization Act of 1973 (HMO ACT of 1973) the implementation has been significant in balancing cost, and quality control. Before this Act was signed in to law by President Nixon healthcare costs were determined by fee for service. A fee for service or indemnity plan is a plan that allows the provider to determine the cost of service, this fee for service plan caused for healthcare costs to increase rapidly. An example of this would be going to the doctor with neck pain, being told to stretch then receiving a bill for 25,000 dollars. As could be understood the cost of healthcare had became a problem.

I have chosen the topic “Examine the financial characteristics of health care delivery along with managing costs, revenues, and human

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.

A challenge that the healthcare nation is facing is to provide the quality of care that is expected and obtain low healthcare cost. Working hand in hand with the private sector and government is in hopes of improving the quality of care that each patient deserves and maintaining the cost so that research can continue. The purpose of this paper is to look into relationships between healthcare cost and quality healthcare.

One area that has contributed to the rise of healthcare costs are the varieties of healthcare services offered to the patient. Competition between providers has caused physicians and hospitals to offer the most current healthcare technologies and modern, eye-catching settings in order to attract and retain clients (Shi & Singh, 2015). Reimbursements for costly procedures and hospital services have been compensated at a higher rate which has also supported the expansion of hospital and specialty procedure settings (Schroeder & Frist, 2013). Renovations of the physical settings and the acquisition of expensive technologies have elevated healthcare services prices to encompass the additional costs of providing high technical services and attracting clients and cause the over-utilization of expensive treatments.

Regulations that prevent insurance companies from participating in interstate commerce have caused competition to grow stagnant in the United States. This lack of competition has allowed the adoption of wasteful procedures by healthcare providers, which in turn passes the increased expenses back to the insurance companies. Therein, insurance costs increase, crippling consumer’s cash flow and quality of life. While healthcare costs continue to rise, people must scrutinize the current healthcare system.

Health care economics involves making plenty of choices. Individuals, groups, businesses, and organizations choose how to use resources . Economics and health care are linked, because health care professionals apply economics in their everyday professional activities. They are able to do this through resource allocation. Any health care organization has to plan out how they will use their resources to their advantage. Health care economics are able to incorporate terms like cost, quality, and resources. In this paper, I will compare these terms as they relate to health care economics. In this paper, I will also explain how they

Currently it is often difficult to make informed decisions about their care because of the opaque nature of health care pricing. Houk and Cleverly (2014) contend that pricing transparency could give health care providers a chance to garner increases in patient census; even if they do not have the least expensive price for a specific procedure, by allow health care providers the qualify why their services cost what they do. The demand for price transparency should be embraced in the future because it could create a forum that allow actual competition for patients and allow health care providers a chance to differentiate

The new social contract between the health care system and employers, patients, and the government has given everyone involved some breathing room. They have provided a clearer picture of the costs of health care; however, it is evident that there is still work to be done regarding the transparency of complete and exact costs. For example; all hospitals have a price list called the chargemaster that includes nearly 20,000 health care procedures. The prices on this list are the prices that patients will most likely see on their bills; however, the terms are not standardized and many are bundled services that make it difficult to compare them with other institutions. It is obvious

Unfortunately, although antitrust agencies are paying attention to recent court actions against mergers, the FTC investigates only 1-2% of consolidations (McCanne, 2014). It is also important to remember than public payers such as Medicare and Medicaid set prices to physicians and hospitals with no room for negotiating and conversely private insurers may use their market-share leverage to negotiate reimbursements. Integrative care in the form of hospital consolidation has been shown to reduce costs by 10-20% but this cost has not been shown to produce a cost savings to private insurers (Cutler & Morton, 2014).

Healthcare costs in the United States have increased dramatically over the last few decades compared to healthcare cost in other countries. In return, this has caused many issues like political reevaluation of our health care system, which involves funding and performance. Furthermore, the reasons for the high health care costs includes administrative costs of running the health care system sine about one quarter of health care costs are associated with administration. Additionally, the United States spends a large amount of money on drugs, professionals and required medical equipment to keep up with patient in need of health care. Moreover, high health care costs are a result of lack of competitive free markets, rapid diffusion of new technologies,

The external stakeholders are the community, patients, MedKey System members, CMS, HMOs (ie. Blue Cross Blue Shield and Tri-Care), and any other private insurances (Richards & Slovensky, 2004). Medicare reimbursement in Alabama was the lowest rate in the nation. This was a constant struggle for the hospital administrators to try to operate on such low reimbursements for their services, which is a threat. Eighty percent of patients were Medicare or Blue Cross in which there was difficulty-negotiating prices with Blue Cross due to monopoly. Buyers have high bargaining power as reimbursements rates are low from Medicare and Blue Cross held monopoly in the services area so negotiating prices was difficult. Suppliers have lower bargaining power due to low Medicare reimbursements and difficulty negotiating prices with Blue

After getting the views and suggestions all discuss this with hospital management and other stakeholders of the hospital to come with a reasonable prices which will make sure the health care provide by the hospital is affordable to everyone and is best quality. As much the patient may wish the prices to be reduced the quality of the health care cannot be compromised to the expenses of providing cheap health care. The prices being suggested should be in a position to support the normal functioning of the hospital.

In 2016, the U.S. Justice Department and the N.C. Attorney General’s office filed a federal antitrust lawsuit against the organization alleging that they illegally limit competition. Furthermore, the lawsuit alleged that the nonprofit organization used its market power to negotiate unlawful contract restrictions inhibiting consumers from having options of lower prices with other healthcare organizations (Alexander & Garloch, 2016). This is a perfect example of healthcare organizations taking advantage of consumers and forcing them to accept higher rates for care by blocking competitors that can offer lower and more affordable

Another group often blocked is complementary or alternative health care practitioners. These restrictions and the insurance industry unwillingness to pay for these services, gives the physicians an almost monopolist control over health care. Providers must be able to enter the market for competition to work and there must be many providers vying for the patient. To get the most out of health insurance plans Consolidation of hospitals and multispecialty group practices increases the negotiating leverage of the group but in certain areas of the US a single large medical system has become the sole provider of major health service thereby restricting competition (Shi & Singh, 2008). This consolidation while giving the hospitals and group practice leverage when negotiating prices of supplies and services tends to increase the price of health care to the patient because there is no longer any competition (Shi & Singh, 2008). For these reason “competition will remain less effective in most health care markets, because the prerequisite for fully competitive markets are not fully met” (Federal Trade, 2004, p. 20).