Term Paper: Healthcare Policy

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Healthcare Policies

Hospitals should not necessarily be encouraged to compete with one another. According to a research article in the Quarterly Journal of Economics (Kessler, et al., 2000), there is evidence that competition in healthcare services does reduce costs in some instances - as well as improving "quality" and increasing "...efficiency of production in markets for hospitals" (Kessler p. 577). On the other hand, because of the existence of health insurance - "which dampens patients' sensitivity to cost and price differences between hospitals" - and the resulting insensitivity to price, hospitals have been known to engage in "a medical arms race" and hence they compete through the offerings of "medically unnecessary services," the authors state.

Indeed, if competition produces socially wasteful practices, obviously that is not a beneficial side effect; what sense does it make for one hospital to acquire every new gadget and technology and to splatter the news of their advanced services on billboards and in full-page newspaper ads if patients don't really need those services? That would be something like a politician promising endless new services to the public just to get a few extra votes - and yet nothing of substance really comes from it in terms of the public welfare.

An interesting survey by the American Hospital Association (Hadley, et al., 1996) - that measured performances of 1,435 acute care hospitals - revealed "...Hospitals in highly competitive markets controlled expenses relative to those in the least competitive markets." But hospitals in highly competitive markets experienced "slower revenue growth" than hospitals in less competitive markets; in fact, those competitive hospitals experienced falling profit rates.

QUESTION TWO: In order to stabilize fluctuations between supply and demand in the hospital field - for example, the "widening gap between the size of the nation's aging baby boom population and the number of pulmonary and critical care physicians" (Duke, 2004) - the first step is to do the homework, conduct the research, to project growth rates of a given portion of the population vs. available healthcare resources. The next step is to change strategies, based on believable, reliable models. In the "Report to Congress: The Critical Care Workforce: A Study of the Supply and Demand for Critical Care Physicians" (prepared by the U.S. Department of Health & Human Services' Health Resources & Services Administration [HRSA]) the author, Elizabeth M. Duke, writes that the HRSA has an existing "physician workforce supply and demand model." The HRSA model is designed to examine the adequacy of the supply of doctors for certain physician specialties. There are indications, the report asserts, through a "growing body of research" that shows in recent years the proportion of patients that receive care under the care of "intensivists" (critical care physicians) "has increased dramatically and this trend will likely continue." And so, to meet the demand, the supply must be beefed up; i.e., the number of physicians trained in critical care must be increased. "If current supply and demand trends continue," Duke writes in the report to Congress, the demand for intensivists "will continue to exceed available supply through the year 2020..."

QUESTION THREE: As the head of an HMO, I am asked constantly about rising costs for healthcare. I explain that there is no one easy answer, and that we try in our company to hold the line on rising costs - even as our costs in purchasing materials and medicines goes through the roof - as best we can. But I can offer several drivers that push all healthcare costs up on a consistent basis, and we are just one player in the healthcare field. One, our workforce is getting older and baby boomers are now nearing retirement; the factors of aging always mean that more medical services will be needed. There are healthcare centers that are burdened with a workload that increase each month, and the cost of operating a healthcare clinic or hospital is always rising. Two, through new, advanced technologies (such as equipment used in organ transplants), our quality of life is enhanced, but these technologies are very expensive to purchase, maintain, and operate. Three, the cost of drugs is skyrocketing, and while we encourage our patients to use generic medications, many people still have a hard time keeping up with expensive pharmaceuticals. Four, Americans want choices for their healthcare needs, and they are impressed by TV ads extolling the virtues of certain expensive remedies and services that they may not really need. Five, insurance companies keep raising premiums for doctors because of the litigation connected with malpractice and alleged malpractice. Those costs are passed along to patients, unfortunately. Six, people are now seeing doctors for more minor problems than ever before; and over the past few years, the number of physicians has increased, and the more doctors there are the more kinds of healthcare services are offered, and these are not inexpensive. Seven, co-payments have not kept up with medical cost inflation, so, for example, a $20 co-payment might actually cost our HMO service provider up to $150 (doctor's fees, pharmacy, lab / blood work, X-rays). Eight, millions of Americans are overweight, obese, or just simply in poor health because of poor nutritional habits and lack of exercise. This tends to raise the cost of healthcare across the board. And nine, terrible diseases like cancer, AIDS, Hepatitis C and drug addiction drives up the cost of healthcare.

QUESTION FOUR: A very interesting Web site (and easy to navigate) is called "Just Answer: Health" (www.justanswer.com).The home page features a large box - "Eighteen experts are online now. Ask a QUESTION, get an answer ASAP!" - into which to type your health issue you want resolved. After typing in the problem, users are directed to a place to register (name, email address, password) and then are offered a choice of a $9 answer ("for those on a tight budget"), a $15 answer ("our most popular option") and a $30 answer ("when it's urgent"). Whether or not the answer is the right one depends on making the financial commitment and waiting. Another URL is MdChoice.com (www.mdchoice.com) that offers a "symptom checker" for such maladies as arthritis, allergy, cancer, HIV / AIDS, along with databases like "Medline," "CancerLit," "AIDSLine" and more. There is a Children's Health Center and health information from "A" to "Z." WebMD is probably the best known of online healthcare venues, but the home page doesn't offer health advice it directs the user to the nearest physician in his or her community. Located at http://www.doctor.webmd.com, the site (towards the bottom of the home page) offers "Symptom Tracker," "Find a Drug," "Health Centers," "7 Best Exercises," "Ask a Question" and more. A fourth site, Online Doctors USA is a consultancy service and a prescription refill service; through this Web site a user can access a professional in his or her community, and get healthcare information (though no advice).

QUESTION FIVE: A medical college whose enrollment has been dropping needs more than a facelift. It needs a brighter vision and a marketing campaign to go along with it. The first thing the college needs to do in reach out to the millions of students in community colleges through on-campus presentations, beautiful and believable advertising materials. Show the facts relating to healthcare needs, and the salaries paid to healthcare professionals. Use emails, text messaging, and video productions to grab the attention of students.

QUESTION SIX: Farmers get subsidies, oil companies get subsidies, dozens of industries receive tax breaks and subsidies from the federal government, so why not nursing schools? One side complains that too many industries already feed at the public trough. The other side points out (according to the American Association of Colleges of Nursing) that there will be a shortage of 340,000 nurses by the year 2020. Americans demand good healthcare and deserve good healthcare so the taxpayers should and will accept subsidies to nursing schools.

QUESTION SEVEN: Most certainly Americans should have access (legally) to discounted drugs from Canada and Australia. The U.S. Congress debated this subject, the AARP has come out in favor of allowing people to buy their prescription medications from Canada, and with the skyrocketing costs of all healthcare - in particular drugs - it seems only fair that (especially senior citizens on fixed incomes) Americans should buy where they get the best price. Drug companies give millions of dollars to politicians and lobbyists to do the legislative and regulatory things needed to keep their profits high, so it's reasonable and justifiable for people to buy cheaper from Canada and put pressure on the market to lower costs in the U.S.

QUESTION EIGHT: In these times of a very shaky economy, citizen uncertainty about the financial future, and billions of dollars being spent monthly in the unending Iraq war, the government should most assuredly offer a Medicare Prescription Drug Benefit. Indeed, the Bush Administration's budget for fiscal year 2009 shows cutbacks in Medicare, and this is the perfect time for Congress to show a lame duck president that he cannot… [END OF PREVIEW]

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