Easing the High Cost of Health Care - Report Example

Easing the High Cost of Health Care Health care spending has risen in the last 60 or so years in response to many more people being covered by health insurance through employers or by Medicare and Medicaid through the federal government. With more people getting their health care paid for by insurance, more people are seeking treatments and preventive care. Between 1970 and 1995, health expenditures went from $73.2 billion to $988.5 billion per year (Sochalski and Patrician, 1998, para. 6). There are several reasons for this growth in spending, and a solution to each contributing factor that would control health care costs and still provide excellent levels of care. As outlined by Sochalski and Patrician (1998) (who are drawing on data from the U.S. Congressional Budget Office), factors that increase expenditures include: Inflation in the general economy, which raises the price of goods and services over time Inflation specific to the health care industry, referred to as “medical price inflation,” which has generally been higher than inflation in the general economy; Growth in the nation’s population, creating more users of health care services; and Changes in the utilization patterns and intensity of services provided, fueled by the growth in health care technology and the practice patterns of providers. In addition, they note that about 80 percent of personal health care spending is accounted for by four items: Hospital care Physician services Long term care (i.e., nursing home and home health care) Prescription drugs and other non-durable medical supplies. Leaving nationwide inflation rates out of this discussion and taking the other factors into account, there are places where physicians, hospitals, and patients themselves can control costs by doing a few simple things. Medical Price Inflation. The National Coalition on Healthcare (2008) states it bluntly: “… our health care system is riddled with inefficiencies, excessive administrative expenses, inflated prices, poor management, and inappropriate care, waste and fraud” (NCHC, para. 5). There’s no single solution to these underlying problems, but health care providers and patients can begin to address the issues by demanding accountability of management, providers, and administration. Prices are sometimes inflated because insurance companies will pay the bill; sometimes, insurance companies put caps on certain items or treatments to control costs. One hospital charges one dollar amount for a treatment, while another hospital charges a different amount. It would help to control costs if there were a system in place across the nation that gave a baseline for how much a treatment or hospital stay would cost, adjustable for regional variations. A solution like this would go a long way toward controlling waste and fraud, and would give patients a better idea of what they, or their insurance company, would pay for health care. Growth in Population. The population of the United States is growing at a reasonable rate, but the number of immigrants to the United States is rising. Everyone deserves decent, affordable health care, so the United States shouldn’t try to control the population in any way, but should instead respond in other areas to control costs so the 40 million uninsured people can get decent care. Recently, President Bush brought Health Savings Accounts (HSAs) to the forefront of the discussion about how to afford health care. HSAs are a good idea because they usually come with an insurance plan that covers major expenses, and the pretax dollars put away in the HSA can be used to pay premiums, higher deductibles, and non-reimbursed expenses (White House, 2008). HSAs also encourage patients to be responsible for their own health care spending, giving them a say in what treatments are reasonable and necessary. There should be greater use of HSAs to reduce the dependency on insurance companies, and to help patients control costs themselves. Use of Services. Health care is seen as something we should be very worried about. Drug companies produce drugs for specific ailments, then run vague advertisements on the TV that cause people to go to their doctors to find out more. Patients and doctors should evaluate carefully how well a drug or treatment will help someone, and how necessary it really is to the patient’s health. Some treatments are necessary, of course, but certainly not all. Prescribing a drug to solve a health problem is an easy fix, but there are long-term consequences. It would be all right if doctors sometimes said “no” to patients seeking treatment, or offered alternatives that weren’t so invasive or expensive. The Bottom Line: Personal Health Care Spending. Hospital care, physician care, long-term and nursing home care, and prescription drugs account for 80 percent of personal health care spending. Brand name prescription drugs cost a lot of money to bring to the market, because of development costs, government oversight, and of course marketing to doctors and through the media. One report states that drug companies spend twice as much on marketing, advertising, and administration as they do on research and development (Progress, para. 1). We should never skimp on development and government oversight, but drug companies should allow drugs to become generics sooner rather than charging high prices for brand name drugs. The real cost of the drugs should be taken into account when setting a price, rather than what the drug company thinks it can make off the market. (For instance, it seems strange that a drug can cost a lower amount in Canada than in the United States, when it’s the same drug.) Increasing the use of long-term care facilities for chronic illnesses, and providing in-home nursing assistance rather than long hospital stays, can reduce costs in that area. Some patients should be in the hospital, if they are likely to experience emergencies that need immediate professional attention. Other patients are better off at home or in a long-term care facility, where they can receive nursing care if they need it but are otherwise accommodated by family or nursing assistance. Nurse Turnover As a Cost Factor Something that any beginning nursing professional should be concerned with is the cost of nurse turnover rates. This impacts people new to nursing because they are the ones who are replacing nurses who leave or change jobs. It costs an amazing amount of money to replace a nurse. Jones and Gates (2007) report that in hard dollars, it costs between $22,000 and $64,000, including such items as orientation and training, advertising for a replacement, overtime or closed beds as a result of short-staffing, etc. (para. 3). Those estimates don’t include the costs of decreased productivity and the loss of knowledge that results when a nurse leaves. Jones and Gates also discuss the hidden benefits of nurse turnover: newly hired nurses are paid lower salaries; replacements bring in new ideas; bonuses don’t need to be paid to outgoing nurses (Table 2). These benefits don’t outweigh the costs, when everything is taken into account. Keeping nurses in their jobs reduces the overall amount of money patients have to pay to get healthcare, and certainly reduces the risks patients might experience because of high nurse turnover. Stress leads to mistakes, and low pay leads to fewer nurses pursuing nursing as a profession because they might be able to earn more money doing something else. It’s important for health care providers to keep nurses in long-term positions, and the management can accomplish this by offering bonuses, rewarding hard work, keeping enough nurses on shift to reduce the burden on any individual, and by encouraging nurses to continue their educations through tuition reimbursement. Each nurse puts forth his or her best efforts in patient care, and it’s up to the management to recognize and reward strong performers and eliminate weak performers. Strong performers tend to leave their jobs because they feel they can get more recognition or better pay at another location. When the mindset of the health care industry promotes the importance of the nurses who care for patients day after day, then nurses will feel valued and want to stay in their jobs. Summary Addressing any of these areas can save millions of dollars overall. As always, preventive treatment is far less expensive than acute treatment. Regular checkups for children and adults, and healthy lifestyles, can help reduce health care costs significantly. When patients need to use health care services, they should be aware of the costs of treatments, and told of alternatives if there are any. Patients taking responsibility for their health care spending, and drug companies reducing costs for prescription drugs, could save significant amounts of money. There is no one good solution that addresses all these areas. Each one needs its own strategy to help control costs. Nursing professionals can help by actively participating in all areas of patient care, and by educating themselves completely on treatment options, prescriptions, and how patients can best be served by the nursing profession. References Jones, C., Gates, M., (September 30, 2007). The costs and benefits of nurse turnover: A business case for nurse retention. Online Journal of Issues in Nursing. Vol. 12 No. 3, Manuscript 4. Retrieved December 18, 2008 from www.nursingworld.org/MainMenuCategories/ANAMarketplace/ANAPeriodicals/OJIN/TableofContents/Volume122007/No3Sept07/NurseRetention.aspx National Coalition on Health Care. Health insurance costs. NCHC website. Retrieved December 19, 2008 from www.nchc.org/facts/costs.shtml The Progress Report. Why prescription drugs cost so much. Retrieved December 21, 2008 from www.progress.org/archive/pharma01.htm Sochalski, J., Patrician, P., (June 10, 1998). An overview of health care spending patterns in the United States: Using national data sources to explore trends in nursing services. Online Journal of Issues in Nursing. Vol. 3, No. 1, Manuscript 1. Retrieved December 19, 2008 from www.nursingworld.org/MainMenuCategories/ANAMarketplace/ANAPeriodicals/OJIN/TableofContents/Vol31998/No1June1998/SpendingPatternsintheUS.aspx The White House, (September 12, 2008). Fact sheet: Expanding health care coverage and lowering costs. Retrieved December 21, 2008 from www.whitehouse.gov/infocus/healthcare Read More