Pay For Value In Healthcare

In Japan, prices for every procedure and drug are negotiated every two years between the physicians and the government. The prices are fixed and the same regardless of where you go in Japan for treatment (Reid, 2008). In the United States, different healthcare plans offer a variety of coverage for medications but some prescriptions can be denied by the insurance company based on your type of insurance plan. Drug companies are very competitive in the United States and prices are expensive. Frequently, insurance companies might cover a similar or generic form of medication rather than the brand name medication and insurance co-pays differ depending on which drug is prescribed.

“The Bitter Pill: Why medical bills are killing us” written by Steven Brill delves into the question as to why medical bills are so high. As Brill begins his research he analyzed bills from hospitals, doctors, and drug companies. Additionally, he interviewed doctors, Medicare and insurance administrators, and gathered patient stories across the nation. He found that the United States spent more money on healthcare than any other developed countries, he stated “We may be shocked at the $60 billion price tag for cleaning up after Hurricane Sandy, [however], we spent almost that much last week on healthcare” (Brill 2013). He also noted “yet in every measurable way, the results our healthcare system produces are no better and often worse than the outcomes in those countries” (Brill 2013). From the charts and graphs that Brill provided shows that the sixty percent of personal bankruptcy filings per year are related to medical bills. Life expectancy in the United States is the lowest amongst the countries that spend most on healthcare, our infant mortality rank is fiftieth in the world, and that one pill cost as much as seven pills in other developed countries such as France. Brill found that in many similar cases, like that ones he presented in the article, Medicare would have at least paid for a small portion of the bill. However, those who don’t qualify for Medicaid and don’t have insurance are often asked to pay excessive prices.

Now a statute, the physician/hospital pay for quality, not quantity, public law number: 114-10 signed April 16, 2015 also referenced as H.R.2 —1st Session of 114th Congress (2015-2016), sometimes called the “Permanent Doc Fix” 04/14/2015 : Passed Senate; 03/26/2015 : Passed House (Medicare Access and CHIP Reauthorization Act of 2015, 2015), which defines the payment and reimbursement reform to doctors treating patients with Medicare. This extensive reform includes the CHIP program insuring children and those families that don’t qualify for Medicare but are unable to afford private insurance and is funded by the federal government and individual states.

The cost of health care has been at the forefront of politics for years. It is one of the most talked about topics not just in political venues but also country wide. Every American has an opinion on how our economy can be fixed and they are passionate about health care reform. The price of insurance alone causes many Americans to not have coverage. For those that can afford coverage, the struggle to pay co pays is immensely crippling their bank accounts. Of these burdens on Americans today, the most frightening fact lies in the cost of prescription medications.

The prices of prescription drugs in the United States are by far the highest in the world. [1] On average, Europeans pay 40% less than Americans for the same medications. [2] Consumers have been resorting to several ways, sometimes putting themselves in harm’s way, to alleviate the burden of high prescription drug costs. Some buy their medications online or cross the borders to neighboring countries so they would be able to afford buying their needed medications. Others have resorted to the illegal act of selling their unused medications in online forums just to recover part of their expenses. Many factors contribute to the increased drug prices in the United States including research and

Responsible Reform for the Middle Class stated, The Patient Protection and Affordable Care Act will ensure that all Americans have access to quality, affordable health care and will create the transformation within the health care system necessary to contain costs. One part of the transformation is the creation of value proposition. Value proposition is a promise of value to be delivered. Value is defined as “a fair return or equivalent in goods, services, or money for something exchanged; the monetary worth of something; market price; or the

In the book Priceless Curing the Healthcare Crisis, author Dr. John C. Goodman, believes that the healthcare system is sick, and he has the cure. Dr. Goodman dissects the Affordable Care Act and urges readers to take charge of their healthcare. The neutralizing of government allows sellers and buyers to act on their judgment and incentivizes prudent spending on healthcare. In turn, the market will prevail on its accord through price negotiations which drive supply and demand. Goodman, a renowned health economist, is more commonly known as the “Father of Health Savings Account.” Priceless delves into the history of Health Savings Accounts and advocates for few restrictions on HSAs. Fewer restrictions will encourage saving money for health expenditures, compare cost, value, and quality of health services, and incentivize innovation from healthcare providers to offer quality services at lower price points. The biggest problem that Goodman uncovers is obscure prices, hence, the title Priceless.

Under a free-market, doctors are by contrary business people who are looking for a profit, and can use the consumer’s lack of knowledge of medicine, and sheer trust as they are a doctor, as a platform to over-charge buyers. Flower (2009) agrees that, ‘Medicine is a matter of high skill and enormous knowledge. So doctors, by necessity, act as sellers, and agents of other sellers (hospitals, labs, pharmaceutical companies). Buyers must depend on the judgment of sellers as to what is necessary, or even prudent.’ Many doctors in the US are giving rewards for selling more products and in contrast giving fewer bonuses by not selling as many products. Surely selling more drugs to patients will only give them more health problems. Within a command economy, health care is not a business, and the correct drugs assumed truthfully by the doctor will be given to the patient.

Medicare also contributes to worsen such situation by issuing reimbursements to doctors partly based on the cost of the care provided. To some extent, patients are more willing to trust the specific drug their doctors prescribed to them even if it costs more. Furthermore, in this case of Avastin and Lucentis, it seems that the company that invented both drugs is trying everything they can, from rebate to lobbying, to keep all the doctors from substituting with the cheaper alternative ones. (Whoriskey, 2013)

There are so many different health care providers and types of health care services that we as consumers can receive. All those different services or facilities are going to have competitive prices for our medical care. I think a patient as a consumers are going to benefit from this. Not only do medical facilities have competitive prices but also insurance

In Japan there is a standardized cost for medications and the population pays a portion of this. Every 2 years their National Health Insurance (NHI) group reviews pricing on Drugs and procedures and adjusts or sets pricing. The NHI works on a copayment system depending on the patient’s income. Once the patient hits a certain out of pocket amount they receive full coverage ("PBS," 2009). In the United stated the Centers for Medicare and Medicaid Services and individual insurance companies negotiate the price of medications. Depending on your insurance the out of pocket charges for medications can vary

HMOs are not the only answers to cost control. Most physicians practicing in the United States consider their profession to be very much a form of art (Kleinke). The definition of art infers that within its sphere there are many variations and preferences. After all, one should not ask Picasso to carve like Michelangelo. Physicians too differ in their methods of treating patients. However when needless tests and procedures are done the treatment will cost more. This is waste. Many suggest that cutting waste will lead to a cut in quality. This is not necessarily true. Consider the following: an otherwise healthy forty-year-old male

The journalist Nadia Kounang further explains the differences between what the U.S pays on drugs and other similar developed countries, in the article Why pharmaceuticals are cheaper abroad. Kounang displays how much American need to pay for Gleevec (cancer medication) which is $6,214 (per month/per customer) whereas in Canada patients only have to pay $1,141 and in the U.K $2,697 (Kounang 1). These prices are the result of different organizations setting different price ranges with drug companies (U.S.A), and these enables American insurance companies to take advantage of it (Kounang 1). While in other countries there are not as many organizations, so this helps to set a deal of a price that benefit both the drug company and consumers (Kounang). Strictly speaking, by having these different medical insurance companies it has made it difficult for patients to afford their medication because there is no singular organization that can set drug price ranges with pharmaceuticals, while in other countries they don’t a variety of different medical insurances which enables the country to provide treatments that its citizens can afford. Thereby, if the government does not fully cooperates with other medical insurances, lowering the cost of medication will be difficult without affecting research and development. And as a result people who can not afford them will still struggle to obtain their required prescriptions.

The more value you get per pound, the better. The lower the cost per QALYs, the better. Cost-effectiveness based on cost per QALY as measurement for the distribution of health resources determines and compares costs against its gain in health outcome. One QALY equals one year in full health and the aim is to improve the wellbeing of people and the measurement for this is the health-related quality of life. Peter Singer (2009) defends the use of cost-effectiveness, for 1) it helps to identify the opportunity costs of a proposal, that is, the value of alternative use of resources; 2) it focuses resources on where they can do most “good” and hence generate most QALYs with your budget. The basic idea underlying cost-effectiveness is that a QALY is morally valuable regardless of the distribution. Cost-effectiveness as a utilitarian measure of value is insensitive as to how wellbeing or QALYs ought to be distributed among people in

Another issue for debate is concerned with whose values/preferences should be used? Do we use the values of the general public or only of those that have the disease or condition? Previously, healthcare providers were commonly used as sources for health state utilities. However, anxieties about their capacity to correctly quantify these preferences led many to argue that utilities should be elicited from patients rather than providers (Ubel et al, 2003). The use of patients’ own health state valuations limits the need to describe a health state scenario