Economic Climate and Proposed Cuts in Health Care - Essay Example

Economic Climate and Proposed Cuts in Health Care "Given the current economic climate and the proposed cuts in health care spending discuss the ethical, political and practice issues in relation to advocacy in nursing" Introduction Nursing advocacy policy and strategy have been of substantial interest to many citizens around the world, especially during the current decade, mainly due to the fact that expenditure cuts by both governments and private enterprise have been increasing day-by-day with the ongoing economic and financial recession. National Health Service (NHS) in Scotland isn’t an exception to these expenditure cuts. Consumer sovereignty principle illustrates the fact that in a free market economy the consumer is free to consume what he wants. However, the consumer’s sovereignty does not have meaning if he/she is unable to buy what he/she wants. This paradox is solved through government intervention in the provision of those merit goods such as health care and education. Hence the involvement of the NHS in healthcare service provision is inevitable. However with the current economic recession the NHS (Scotland) has deferred much of its expenditure and even effected cuts on some of the most critical programs of expenditure (Duncan, 2007). It’s the bounden duty of a democratically elected government to provide the basic minimum requirements of the citizenry. Failure to do so is tantamount to the negligence of an ethical duty. Social welfare policy debates have been raging about all variety of topics though the current debate on health care is known to have been a typical exception due to many reasons. In the first instance its detractors have carried out one litmus test after the other to discredit political authority but the outcome is clear, viz. governments are finding it difficult to run huge budget deficits one year after the other. Secondly the economic debate over how would the money be raised to implement the policy. Thirdly, how far the tax payer would go in accepting the government’s proposal for a more comprehensive health care system is a big problem. Finally arguments have been centered on the impact of such expenditure cuts on the nursing profession. Analysis Health outcomes associated with the above action of the government can be measured in conformity with a number of positive effects. For instance a series of positive outcomes including a healthier nation, greater productivity, longevity and a bigger Gross Domestic Product could add to incremental values by increasing the relative effectiveness of intervention by the government. If the free market forces of demand and supply are allowed to operate freely, shortages could persist in the long run. In the first place suppliers have no tendency to increase supply when consumers demand less due to their inability to pay free-market determined price. Positive spill-over effects associated with subsidies to health care industry are many. While the subsidy would reduce the price paid by the consumer by a percentage determined by the very price elasticity of demand for health care, there is no hard and fast rule which tells what percentage the producer should keep and what percentage he should pass on to the consumer. However every free market economy tends to operate optimally at least in theory thus maximizing consumer and producer surpluses defined as the amount of benefit above the price paid and below the price received respectively by the two. It’s here that ethical considerations play a pivotal role (Crib & Duncan, 2002). The Scottish authorities have been concerned about the universal reach of healthcare services to its population. But nevertheless the current spate of expenditure cuts amounting to millions of Sterling pounds has come at a time too bad for politicians. Political implications of such cuts border on two broader perspectives. In the first instance, as independent political analysts point out even the private healthcare providers in Scotland have been affected adversely by the current global economic crisis. Therefore advocacy groups within the nursing profession have become more vocal and articulate, thus demanding a total abstinence on expenditure cuts by the government. In the second place, assuming that advocacy in nursing is focused on the purely ethical argumentative posture of those groups that advocate government involvement in healthcare provision and then continuous increase in expenditure, there is very little that is shown by such a picture. In fact it effectively hides the economic picture of crises and expenditure related constraints. Compulsions and obsessions have been noticed though on an ever rising scale here. The polity has been subject to a degree of overarching philosophizing by politicians and government officials over the issue. This discourse on health care provision and its shape has divided the nation on clear cut lines of those who have the audacity to argue that public or government provision of health care would be the beginning of the end of all merits associated with private provision and those who argue that government provision of health care services would bring down the cost of medical care (Culyer and Newhouse, 2000). Strategic capabilities of government hospitals partially or wholly depend on this link with their strategic partnership with professionals including the nursing staff. While strategic professional orientation is determined by its own strengths, external influences such as political, economic, social/ethical and technological would determine the hospital’s preparedness to face environment related factors. As for the health care industry political impact on the individual hospital or the service provider can be assessed in a number of ways. The government has a huge political stake in the industry and therefore their own behavior is basically determined by desirable outcomes in the health care sector as a whole. For instance the Scottish government needs to focus on setting some priorities for recognizing specific professional policy standards in nursing both in state and private hospitals. All these politically motivated influences would be absorbed by the health care industry at large and other similar players in the industry would be compelled to respond appropriately to these new developments which have both a political and economic impact on the industry. However strategic professional capabilities of nurses coupled with the extent of government subsidies, help hospitals and individual practitioners to position themselves in the industry at an advantageous level vis-à-vis their rivals who might lack such capabilities. Economic implications of such government policies as budgetary allocations again running into billions, for the health care industry, can only be assessed with a focus on the multiplier effect. For instance people who get extra cash would be compelled to spend it on health care related products among other expenses. This would force the health care providers like NHS to hire and buy new staff and materials. On the other hand the present administration’s tax policy would compel some big earners to double check their expenses. Taxation policy as determined by the government’s fiscal policy on controlling inflation and generating jobs that pay higher real salaries is less likely to benefit health care industry in general because health insurance system is not going to pay enhanced bills to health care providers. In fact right now there is much less political will in Scotland and NHS to go for huge expenditure plans involving nursing profession. Ethical arguments based on helping the poor patient are not in vogue either because government budget deficits running into millions have forced authorities to request the public to tighten their belts. Coupled with inadequate knowledge about demand elasticities – price, income and cross – the NHS administrators might more likely make the wrong decisions by cutting down on new and even on-going skills training programs for nurses. Information available to customers is still less in the health care industry. Basically as the following diagram illustrates there is a mismatch between demand for and supply of health care at any given time in the market. A persistent mismatch would distort market trends in the long run to produce market failure. Being a merit good it’s priced at P1 where the quantity Q1 is sold and bought. Thus health care is both under-consumed and under-produced. If the government intervenes thus ignoring free market forces and gives a subsidy to the producer, a new supply curve, i.e. S2-S2 would shift onto the right. Now at the lower price of P2 the higher amount Q2 would be supplied and demanded. That would increase the amount of social welfare as shown by the triangle marked abc. Social welfare debate in healthcare is centered on ethical considerations though there is also a political dimension to it (Melnyk, 2004). Social welfare in health care is bound to increase as producers tend to produce more as a result of the subsidy while consumers tend to consume more because some of the benefits of the subsidy are passed on to consumers by producers. Scottish NHS has produced similar division between supporters and opponents. On the other hand the supporters have more or less been banking their hopes for a successful outcome of the debate in their favor on the classical dichotomy of opinion among those who are opposed to the government becoming a mammoth octopus-like public corporation. Those who believe in the government involvement in the provision of health care are not many though they have been able to win over support of the most unlikely groups over the weeks simply because the opposition is not sure whether there is real substance to the argument put forward by the politicians in the opposing camp. Figure 1: Government expenditure on healthcare and social welfare Source: Writer’s own diagram. As the above diagram illustrates social welfare increases when the government spends more on healthcare and subsidizes its final consumption by the consumer. The political debate has gone one step further to bring in nursing practice related issues such as the continuity of skills training and development programs and encouraging immigrant labor. In fact the latter issue has acquired a further political dimension because private hospitals in Scotland are following in the footsteps of their counterparts in England, by hiring nurses from other regions. Thus NHS has become the focal point of criticism for Source: Writer’s own diagram In the process terms and concepts have been redefined and reexamined. For instance the concepts of deficit budgeting and nursing profession’s changing environment of practice have acquired a hitherto unprecedented dimension because health care policies would be less friendly and above all made available with a restricted impact on the very patient whose significance has diminished in societal cohesiveness (McGuire, Henderson and Mooney, 1987). The associated nuances of government expenditure cut debate go further than this. By implication the debate has not only given rise to a diverse and complex set of outcomes but also produced a set of connotations and denotations about what health care policy discourse ought to be like. Government as the ultimate decision maker occupies a very important place here. The argument put forward by those who advocate a fully comprehensive set of professional nursing standards in Scottish NHS is based on the fact that there is no excuse for government expenditure cuts on healthcare and it would go so far as to shift resources away from efficient uses to less efficient uses. This has given enough ammunition to the supporters of welfare expenditure by the government, i.e. a shift in resources would weaken the NHS as feared by those who oppose the government’s current policy of healthcare that rests on global trends. They demand a qualitative change in the provision process (Whittington, 2008). In other words it’s a catalyst that would emphasize nursing practice oriented provision of health care thus bringing in all citizens under the protective umbrella of the state health care policy. While the assumption seems to gather some momentum among even the fiercest critics of the government there are those residual elements that still question the motive behind the government’s continuously ballooning healthcare budget. However the rhetoric of both those supporters and opponents on either side of the divide is obvious enough. The whole governmental apparatus would be cluttered with giant service sectors while the quality of service would suffer setbacks. Priorities in nursing practice within the Scottish NHS The current nature and extent of priorities in nursing practice within the NHS in Scotland signify a broader level of policy and strategy shift away from government sponsored health plans to private ones. In the process nursing profession has become a victim of government negligence. Thus a set of priorities has to be defined in advance to broaden the understanding of the outcomes. Nursing profession within the NHS has been subject to a series of setbacks as a result of the government’s expenditure cuts on healthcare. The primary reason being adduced by the government is that of the current financial crisis. Despite this claim many critics point out that such expenditure cuts have more to do with the government’s general belief that private enterprise is more efficient and cost effective while NHS has become a burden on the taxpayer. There is good substance to this claim, especially taxing more and more an already overburdened taxpayer. According to those who lean on an interpretation based on structural functionalism, the societal system consisting of various individual units such as families has been torn apart by the monopoly power inherent in private health care provision. NHS in Scotland has been more concerned of curtailing subsidized services including surgical procedures for which specialized nurses are required. The raison d’être provided by those who are opposed to the government providing healthcare services through deficit budgeting is too simplistic though. According to some critics, “Cost-effectiveness is the primary tool for comparing the cost of a health intervention program with the expected health gains”(www.dcp2.org). Such intervention is basically carried out with resources such as human and capital equipment in order to achieve social, economic and even political outcomes such as the reduction in incidence of diseases, disease control and total cure programs. The following shows how the Cost-Effectiveness ratio is defined and illustrates possible outcomes in the field of health care. The sum total of all benefits is divided by the sum total of all costs. For example let’s look at constant efforts of the NHS nursing staff in Scotland to increase the life expectancy rate among heart patients. A very simple and less costly treatment method is the prescription of aspirins and beta blockers to the patient. The nursing staff here plays a pivotal role by helping the patient to purchase cheap drugs by giving them “unofficial advice”. A more expensive but equally more effective method of treatment involves not only continuous medication but also a combination or single use of angioplasty/by-pass surgery/stents/cardiac catheterization and so on. As the table illustrates the cost effectiveness is determined by the incremental marginal effectiveness or benefit. The table is based on the Primer on the Cost-Effectiveness Analysis: Effective Clinical Practice, published by the American College of Physicians (Primer on Cost-Effectiveness Analysis, 2000, Vol.5. pp.253-255). The writer of this paper altered it to give a more realistic cost representation. Despite its deviation from the above formula the health outcomes as measured in the table convincingly prove the systematic rise in costs and equally fast improvement in health outcomes. Source: www.acponline.org However it must be noted that according to the above formula all benefits are divided by costs. But nevertheless benefits cannot be quantified in any other way other than by calculating the number of years the patient is likely to live after surgery. Thus it’s practically feasible to calculate the Cost-Effectiveness ratio as shown in the table (Pizzi, 2005). If we assume that there is another alternative before simple treatment is adopted, then it would be to have no treatment at all. This might as well prove why government expenditure is essential. The marginal cost of the complex method involves an incremental addition above the cost for the simple method. As such the final health outcome measure is the CE ratio but it cannot be solely determined by an absolute analysis. There must be a comparative analysis. All available and relevant methods of treatment have to be compared in order to arrive at a conclusion based on a more practical assessment of facts. The effectiveness data as shown on the table have to be more realistic. For example if the data are based on hypothetical costs and benefits figures taken from a variety of sources, there is less likely to be a reasonably fair representation of CE outcomes. Therefore randomized data obtained from random samples are better. Next the source of the data matters. In contingency model building, researchers have a tendency not to discriminate between sources of information (Hazlitt, 1988). Thus those analysts who fail to take into consideration the additional costs associated with revisits, readmissions and so on are likely to provide the CE analysis with wrong information. Finally the source of funding matters because there can be bias. For example researchers who work for pharmaceuticals companies would naturally be tempted to show more benefits against costs in using the drugs manufactured by those companies. However it’s not so with NHS nurses in Scotland because their nursing practice is determined by the very nature of the dedicated professional service. Prioritizing the use and adoption of CEA in the health sector of the country requires a series of qualifying data. An effective CEA should have the capacity for adaptability to the practical treatment environment. In other words isolated or/and disconnected CEA cannot have the desired results in a completely practical treatment environment where programs tend to be associated with cost and benefits alone. The psychological impact on the patient apart, there can be an attendant divergence of opinion among the health care staff as to what constitutes moral and non-moral aspects of prioritizing that include nursing advocacy (McCrone, 1998). According to health care planners and specialists who emphasize the need for prioritizing the use of CEA in the health care industry setting, there are a number of associated strategic choices available to the administrator and planner to quantify the effectiveness or benefits arising from such CEA prioritizing, which in turn is determined by efficiency criteria and equity criteria. Cost-Effectiveness of the intervention program. Horizontal equity which refers to equality between the need and the treatment irrespective of the ability/inability of the patient to pay for it. Vertical equity which refers to those patients with worse health conditions either benefiting or not benefiting from such intervention. Vertical equity which refers to those benefits which are directly addressed to meet the needs of the poor or not. The resource constraint criterion which refers to both opportunity cost and direct benefit of intervention to an individual. The criterion for the strategic choice to intervene such as when and on what conditions such intervention would be decided. The need is just one such condition. These efficiency criteria for prioritizing CEA in a health care environment have received greater attention from both specialists and laymen. The first rule tells that the cost-effectiveness must be determined first. For instance a patient with no hope of recovery being put on the life support system simply because euthanasia is not allowed by law is not a practical measure. Since efficiency here refers to the optimum level of societal well-being, there is very little freedom for the planner or administrator to decide otherwise, even within the nursing advocacy environment in the NHS context. 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Primer on Cost-Effectiveness Analysis, 2000, Effective Clinical Practice, Vol.5, pp253- 255. 10. Whittington, R. 2008, Introduction to Health Economics Concepts - a Beginners Guide Spiral-bound), Rx Communications Ltd, Flintshire. 11. Cost Effectiveness Table retrieved from www.acponline.org on November, 3 2010. 12. Definition of Cost Effectiveness retrieved from www.dcp2.org on November, 3 2010. Read More