Pricing of health and its effects on the poor in the US - Dissertation Example

Topic: Pricing of health and its effects on the poor in the US Lecturer: Presentation: Introduction The cost of healthcare in the United States accounts one of the largest segments of the country’s economic expenditure. According to John, et al. (2005), the costs of medical care in the country increases annually, often surpassing the expenditure on other important goods and services. The growth in medical costs has a remarkable impact on how the government, the public, businesses, and employers undertake their affairs. According to Bradley, et al. (2006), the most significant impact of health inflation is on insurance companies, which offer health cover to the public. The upsurge in the cost of healthcare results to an increase of the premiums payable. Companies that provide insurance cover to their employees are normally forced to cut on wage increases in order to cope with raising health premiums. In addition, the increase discourages people from buying their own cover and raises the financial budget of households. Consequently, the government health budget increases, which compels it to increase taxes, levied on the public (Jessica, & Bernard, 2006). These measures result to heavy economic burden to people with low incomes. Statement of the problem This study investigates whether the increasing prices of healthcare have disproportionate impact on people with less disposable income in the United States. Research questions a) Does money and quality of life affect the costs of health? b) What is the effect of the level of income on medical treatment of poor people? c) What is the effect of out of pocket payments, insurance premiums, and lost income on the cost of treatment? d) What is the impact of financial stress and living expenses on medical treatment of the poor? Significance of the study Health care reforms in the United States remain one of the most controversial policies of the Obama administration. These reforms mainly involve protection of the American citizens from the escalating cost of health care in the country Jessica & Bernard, 2006). Bradley, et al (2006) attributed the following factors to the increasing cost of healthcare in the country. The factors include increasing economic growth that encourages greater expenditure on healthcare, increasing number of elderly people in the country, high cost of insurance premiums and declining number of the people paying health care expenses than they used to do in the past (Bradley, et al, 2006). The economic growth in the United States had been increasing for a long period before the recent global recession. Bradley, et al (2006), argue that there is relationship between the rate of economic growth and the cost of healthcare in any economy. Economic growth result to creation of wealth that consequently encourages higher expenditure on medical care. These expenses result from increased advancement of medical technology and research to seek better curative and preventive methods. As a result, the subsequent products, services and procedures increase the cost of healthcare (Bradley, et al (2006). According to John, et al. (2005), the upcoming medical technology accounts to approximately a half of medical expenses. With the recent slowdown of economic growth, Joseph, (2007) noted that the cost of healthcare continues with its increasing trend. Millions of people have lost their jobs and there is need of evaluating the raising costs to cater for such people and during periods of economic stagnation or recession. Loss of income increases the number of people dependent on public health programs in the United States (Joseph, 2007). This has resulted to an increase in the government expenditure on health due to the increasing premiums, leading to heavier taxation of the taxpayers. The aging populations in most developed economies have contributed to higher costs of medical care. According to John, et al. (2005), elderly persons increase the costs of healthcare because they have more health complications than youthful people do. Most of these complications afflicting the elderly require sophisticated and expensive treatment that normally involves long periods of hospitalization. Others factors contributing to high costs of healthcare includes changes in lifestyle that has increased incidents of diseases such as diabetes and complications arising from lifestyle changes (John, et al. 2005). The income levels of various segments of people in the society plays a significant role in determining the cost of healthcare (Richard, 2007). According to Joseph (2007), the American government offers health insurance subsidies to impoverished people and special groups such as the disabled and the elderly. These interventions have resulted to an increase in the number of people having health insurance coverage in the country. The effect of increased health insurance coverage has stimulated more research and development in the medical field raising the cost of medical care further. Joseph (2007) noted that eligibility of poor people to public health programs is restricted to specified federal poverty levels in a particular state in the US. However, the ever-increasing costs of insurance premiums do not match with the number of people at or below the Federal Poverty Level (FPL)(Joseph, 2007).This has increased the proportion of the family income used to cater for private health insurance cover for people whose income is just above the stipulated federal poverty level. Out of pocket- payments for health care has a profound effect on costs of medical care expenditure. According to Richard (2007), high out of pocket payment lower the cost of medical care and reduced payments increase the cost of treatment. Higher out of pocket payments encourages greater cost sharing in the cost of treatment. Research design and methodology This research study will access the impact of the increasing costs of health on people with low incomes in the United States. The study will compare the costs of healthcare in the country for the last twenty years with people’s incomes and then establish their effect relative to national economic growth in the US. To obtain the relevant data, both primary and secondary methods of data collection will be used. Information on the cost of insurance premiums will be obtained from websites of relevant companies and the government websites for public programs such as Medicaid. Questionnaires will then be posted to 50 respondents, where they will be required to state their employment status, whether they have insurance cover and the proportion of their income used to cater for health care. From the data collected, relevant themes of the study will be analyzed qualitatively and quantitatively. These themes include the impact of loss of income on the cost of treatment and the effect of high living expenses on the quality of medical treatment to low income earners in the country. References Bradley, C. et al. (2006). The effect of population aging on future hospital demand. Health Affairs, 25(3), pp 130-139. Jessica, S. & Bernard, D. (2006). Changes in financial burdens for healthcare. Journal of the American Medical Association, 296(22), pp 1322-45. John, F., et al. (2005). Evaluating effects of tax preferences on health care spending and federal revenues. National Bureau of Economic Research, 2(14), pp 1-9. Joseph, N. (2007). Medical care costs: How much welfare loss? The Journal of Economic Perspectives, 31(67), pp 29-47. Richard, R. (2007). Medical innovations duels: Cost containment. Health Affairs, 13(3), pp 24-33. Read More