Financial Aspect of Health Care - Assignment Example

Cost of Healthcare Question based on the above transcript I do not know my exact healthcare costs. This is because I currently rely on the HMO structure which allows for a co-payment for the health services bill. The health insurance ensures that the patients only pay charges, without knowing their actual health bill. The insurance card is used by the doctor to calculate the charges. Thereafter, the hospital bill calculation and payment is done by the hospital and the insurance company; the patients are rarely consulted (Joynt & Jha, 2012).

Consumers should know the value of the services or products during purchase. This is because knowing the healthcare costs ensures financial efficiency of the patient. Cost knowledge enables the consumer to plan (budget) for products and services; this will enable him or her to choose the most appropriate and affordable health product or service provider. ReferenceJoynt, K. & Jha, A. (2012). "Thirty-day readmissions--truth and consequences". The New England journal of medicine 366 (15): 1366–9.

Question 2 The Payment Process. 
Government Payment Programs The exact total fraud value in the healthcare sector in the USA is not known. The Government Accountability Office, in 2010, illustrated that $48 billion dollars were used in improper payments in the health sector. That is approximately 10% of the outlays for that year totaling to $500 billion. However, Erick Holder, the US Attorney General illustrates that approximately $60-90 billion fraud in 2010 in the Medicaid and Medicare fraud (Pear, 2008).

Waste occurs in the health sector programs through misallocation of financial resources; for example allocating a lot of finances to non essential projects. Reference Pear, R. (November 27, 2008). "New Medicaid Rules Allow States to Set Premiums and Higher Co-Payments". The New York Times.Question 3 Health care costCost containment entails controlling the expenses or costs needed in operating a healthcare organization, or implementing a health project within planned budgetary limits. Cost containment exercise is a significant management function, because it ensures cost efficiency.

This is through using appropriate expenses to achieve intended healthcare targets. The most appropriate metaphor for cost containment is financial budget. This is because it sets limits in the financial use in healthcare, so as to realize efficiency and effective management of funds allocated for healthcare (Pear, 2008). ReferencePear, R. (November 27, 2008). "New Medicaid Rules Allow States to Set Premiums and Higher Co-Payments". The New York Times.Question 4 Healthcare as BusinessHealthcare is considered a business because it applies the theory and principles of management.

One of the principles of management illustrates a scalar chain of command. This describes the flow of authority and power from a single top level, to the lower levels of the health organizations. In healthcare, instructions flow from the top management of the health institution, through the middle management, to the lower and non-managerial staffs. Healthcare is a delivery system because; it aims at offering the highest quality and affordable health products and services to consumers, the patients.

High quality is ensured through adequate quality control and assurance processes (Joynt & Jha, 2012).The healthcare sector and institutions are affected by both external and internal factors. The health manager has control over internal environment. However, the manager has little or no control over external environmental forces like political and legal aspects. The manager should pay close attention of the external environment because they can change operations in the health sector. For example, government legislations and Acts can subsidize the costs of certain health services.

ReferenceJoynt, K. & Jha, A. (2012). "Thirty-day readmissions--truth and consequences". The New England journal of medicine 366 (15): 1366–9.