The Pricing of Health Costs and Its Effect on the Poor in the United States - Dissertation Example

?THE PRICING OF HEALTH COSTS AND ITS EFFECT ON THE POOR IN THE UNITED S This article conducts an analysis of the findings on the effects on the poor from the increasing health costs. It performs an analysis on the effects of money and quality of life on the cost of health; how income level impacts the treatment of the poor, and consequences of financial stress, out-of-pocket expenses, and loss of income on the health of the poor. It highlights the relationship between poverty and ill-health; how stress is affecting and showing badly on the health outcomes of the masses in the US. Findings provide a clear picture of socio-economic realities compelling people to remain uninsured because of social and economic circumstances of the people living in the US, an affluent country. It researches the relationship between socio-economic cause, conditions, and health. Financial Stress and Living Expenses Health costs have been on the rise for many years. In 2008 it crossed $2.3 trillion, three times higher than $714 billion in 1990, and eight times higher than what was spent in 1980, which was up to $253 billion. Controlling the health costs has been a primary policy preference of the US government. The speed of rising health costs added with the economic recession and increased federal deficit has stressed the government systems. A number of causes have been identified of rising health costs, which include: Technology and Prescription drugs Chronic disease Aging of the population The US has been o the top of all industrialized countries in the matter of individual spending on health care approximately $7,681, which reaches to 16.2% of the country’s Gross Domestic Product (GDP). Controlling the health care costs is very urgent in the country’s larger interests for economic stability and growth (Kimbuende et al., 2010). The ever-increasing health costs have become an alarming social, economic and political issue in the US. The government policy on health reforms so far has not helped in effectively chasing the cost because of wrong strategies. The US should learn from other countries; how they have been successful in reducing heath costs. Obama government has taken the initiative of approaching the issue by improving health outcomes among other strategies, as promised to control rising health costs in the 2008 presidential election (Marmor et al., 2009). In tax-favored “health reimbursement accounts (HRA),” funds of employees with added contributions by employers have affected the poor people with the cost-sharing arrangement by shifting costly insurance types to them. Tensions have risen on health care costs as employees wages are not increasing in proportion as health costs have been increasing. It becomes evident from the fact that since 1999 family premiums for employer supported health insurance has increased by 131 percent putting additional burden on low-salaried employees. It has affected the poor in the US shelling more from their pockets on high premiums. According to the Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, only hospital care and physician services form more than half of the nation’s total health care spending. Any federal level health reform should give top priority to reducing health costs (Kimbuende et al., 2010). Some of the related questions include: 1. Do money and quality of life affect the cost of health? 2. What effect does income level on medical treatment have on the poor? 3. Do financial stress, out of pocket payment, and loss of income reduce hospital visits for the poor? What impact the increasing cost of healthcare is having on the poor people? Healthcare pricing is shrouded in mystery because providers don’t show transparency of payments received. Insurance companies also do not share the payments with the customers. “Sticker prices” pasted on care provider websites are generally more than paid by insurance companies. Some of the US states like New Hampshire, Maine, Oregon and Massachusetts provide details on pricing information as taken from databases of insurance claims (WSJ, 28 Oct. 2009). Findings and Analysis According to Futterman and Lemberg (2007), there exist wide health care inequalities reaching unwanted levels although progress on the front of disease control and treatment has been made. Communication can help in bettering figures of health care inequalities and their outcomes. A number of factors are responsible in becoming social determiners affecting health of the poor, which could be any or all of them such as stress level, life experiences, social class division, unemployment, social status, food and transportation. Poor are affected the most from the increased health care costs as their low social status creates inequalities. Even the best of social and government efforts prove to be deficient. Being poor is one of the major determiners for the provision of medical care. A lot depends on the government’s social and economic policies and steps taken on social reasons of poverty to eradicate the causes behind and help the poor by researching on the causes of poor health so that dependency on health care could be reduced (Futterman and Lemberg, 2007). When we say that poor can ill-afford healthcare, we surely don’t count them poor on the basis of their not having funds or having insufficient funds. It can be proved by comparing health stats of the US people with that of any other country not as advanced as the US. Take the example of Cuba having gross national product (GNP) below $10000 and life expectancy of a Cuban male is 76.5 years while GNP of the US is $34000 and the life expectancy 75.1 years. It proves there is no correlation between poverty and age. Female life expectancy in both Cuba and the US is almost same. It substantiates the fact that uniformly poor people can maintain their health very well; China and people in Kerala in India are yet other examples of peoples’ health not depending on their income. The US spends excessively over its peoples’ health but comes on 29th number in the matter of long-life. It again proves the need to change social conditions beneath. These are basic human needs spread unequally and of dissimilar types subservient to social class and economic standard. Material wellbeing does not guarantee good health (Futterman and Lemberg, 2007). Thus, we can say that “status syndrome” has no direct connection to good health. In fact, a higher status could be a guarantee of better health. Status symbolizes achievements and material valuables helping in getting desires fulfilled. One has control over life and being employed ensures the well being. When basic needs are not fulfilled, health of the poor suffers. In the US, a rich country otherwise, social categorization happens to be a cause of long life, which could be because of both communicable and non-communicable diseases. Famine or lack of cleanliness is not the reason behind low mortality. In stead, it is the social division and occupational hierarchy that affect health and mortality. Employment levels indicate health risks such as CVD risks than any other bigger coronary risk. The higher social status of a person indicates better health but it crucially differentiates the mortality rate within the hierarchy. Calling this finding the “status syndrome”, a man’s ranking in the hierarchy, not position thus is the deciding factor of health and long life (Futterman and Lemberg, 2007). Frequency of stress makes stress loads beyond adaptation, affecting physiological adaptive responses, making them mal-adaptive. A person’s adaptive process cannot provide support to relieve from stress each and every time it increases. From the perspective of critical care also, life-style changes create financial stress, as living expenses go on increasing due to changed life style. Certain diseases such as CVD record increase. Carelessness on not following the diet, weight, and exercise routine creates high blood pressure resulting in changes in metabolism. Any sort of stress dysfunctions the central nervous system, thus initiating behavioral and physiological response symptoms, which at the earlier stages create a positive effect on mortality but become risky when stress becomes common routine (Futterman and Lemberg, 2007). Naturally, when financial stress due to unemployment increases, it affects capacity to visit the doctor. Situation further gets accentuated when health insurance premiums are not deposited timely. The same thing has happened with the American poor; amidst global recession more people have been out of jobs leaving them at the economic vagaries. Lower social position is closely related to biological stress pathways. The Whitehall study also indicates increased heart rate variability (HRV) in people working in lower level government jobs than higher ranks. It means when you are working under pressure your HRV and cortisol level gets raised. It proves a relationship between being poor and having more chances to health risks due to financial instability and job risks (Futterman and Lemberg, 2007). Health care impacts on the poor people in the US are not because of unhealthy living conditions like polluted water, poor cleanliness, and hunger but because of the socio-economic traits of the community. A number of reasons could be assigned for unhealthy living such as: a. violence, crime b. human immunodeficiency virus (HIV) infection, CVD c. insufficient availability to positive lifestyle factors (relevant work and earning, healthy foods, educational opportunities for children, opportunities for exercise, medical services) d. psychological effects of being in the low socioeconomic level Comparing the effects of poverty and social inequity on health of rich countries with the poor like Japan with Bangladesh, health of people in rich countries is better than poor countries. Within a specific community there could be difference in health and long life status such as there is in Washington DC and New York City a 20-year variation in male life-expectancies within a 12-15 miles area because of violence, HIV infection, and CVD (Futterman and Lemberg, 2007). It is the social environment that affects health of people with the socio-economic community features and personal traits leading to bad health. Psychosocial causes add to the health inequalities in disadvantaged communities when the people undergo the bad effects of changed life styles, which get cumulative when exposed with negative factors such as crime and violence, fear, missing social security, and psychological effects of living a low socioeconomic life (Futterman and Lemberg, 2007). Findings indicate that affording blacks in black neighborhoods are healthier than poor whites living on the edge in the white neighborhood. It has become evident that stress, loss of income and out of pocket payment affects health. Such a scenario creates a psychological chain reaction. Having no control and direction to the life pushes people towards depression (Futterman and Lemberg, 2007). Survey Findings As per the starr-McCluer 1996 survey wherein singles and childless couples are counted as families, 45 percent people had no financial asset, therefore no health insurance in 1989; their financial assets with no insurance were just $50, which included their bank balances, stocks, bonds, mutual funds, and individual retirement accounts (IRAs) and retirement savings, as per the Survey of Consumer Finances (SCF), the national survey conducted after every three years by the Board of Governors of the Federal Reserve Board. For survey purpose, a “low-income family” was defined a family whose income is either at or below 100 percent of FPL while a “lower-income family” constituted with income level either at or below 200 percent of FPL. Findings of the survey are based on 2001 tabulations on Current Population Survey (CPS) by the Center on Budget and Policy Priorities (The National Academies Press, 2002). Survey findings point out towards lack of funds to purchase health insurance. For families without any health cover the whole year and income at or below the poverty mark, the ratio exceeded from one in four having out-of-pocket expenses, going 5 percent over the income. In total expenses of 4 percent families went beyond 20 percent of yearly income (The National Academies Press, 2002). Summary and Conclusions The efforts of the government so far have not been successful in controlling health costs. Increasing health costs are affecting the poor of the US badly. Even the cost sharing arrangement of employers with the employees has not been effective as salaries are not increasing to match with the increasing insurance premiums. There is lack of transparency on the actual cost of health care being charged from the patients and insurance companies by the hospitals and medical service providers. Inequalities in the provision of health care have been on the rise in the US. Some of the factors responsible for the ill-health of the American poor are stress level, life experiences, social class division, unemployment, social status, food and transportation. Inequalities in social class and economic standards in a community are more responsible for the ill-health of the poor than lack of money. Material well being is not a guarantee that people are in the pink of their health. Health and mortality are closely related to social division and occupational hierarchy than one’s position in the society. Unemployment, lower social position, and financial stress take their toll besides violence, crime, infections, unhealthy life styles, and psychological effects of living a low socioeconomic life. To a great extent, only health insurance can open the doors for availing hospital facilities for lower income families. Even if a single family member is employed, health insurance becomes possible as a collective family resource. Insurance through government programs depends on the total income of the family but out-of-pocket health expenses also affect finances as a collective risk to the whole family. Families with at least one uninsured member belong to lower income. It is found that income of such families is at or below 200 percent of the federal poverty level (FPL). Poverty, no insurance and poor health are inter-related factors visible in such families, which creates difficulty in finding causal links and effects. It indicates to the finding that uninsured people and families have lesser assets than people with health insurance. They can not afford to purchase insurance cover because of sudden and rising health care costs (The National Academies Press, 2002). References Futterman, Laurie G. and Lemberg, Louis (2007). Inequalities in the Healthcare System: A Problem, Worldwide. American Journal of Critical Care. 16, 617-620. Retrieved from http://ajcc.aacnjournals.org/content/16/6/617.full Kimbuende, Eric., Ranji, Usha., Lundy, Janet., and Salganicoff, Alina. (2010, March). U.S. Health Care Costs. Retrieved from http://www.kaiseredu.org/Issue-Modules/US-Health-Care-Costs/Background-Brief.aspx Marmor, Theodore., Oberlander, Jonathan and White, Joseph. (2009, April 7). The Obama Administration's options for health care cost control: hope versus reality. Annals of Internal Medicine, 150 (7), 485-489. Retrieved from http://www.annals.org/content/150/7/485.full Mathews, Anna W. (2009, October 28). Lifting the veil on pricing for health care. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424052748704222704574499623333862720.html The National Academies Press (2002). Health insurance is a family matter. Retrieved from http://www.nap.edu/openbook.php?record_id=10503&page=84 Read More