Principles Governing the Financing of the American Health Care System - Essay Example

American health care system Principles governing the financing of the American Health Care System A health care system involves all the activities whose main aim is to promote, restore and maintain health. The U.S has a unique system of health care. It is characterized by a lack of central governing agency, unequal access to health care, delivery of healthcare under market conditions that are imperfect, multiple players that exist and third party insurers who function as intermediaries between the financing and the delivery of healthcare. Moreover, the U.S healthcare has legal risks that influence the behaviour, new technology that is very expensive and a focus on the improvement of the quality of healthcare delivered. There is no country in the world, which has a perfect system (Barker, 2009, p. 89). The American health care system has a decentralized system of financing and ownership. Currently, it is seeking to reform its financing and delivery system. In order to accomplish its reforms, it needs a concerted effort from the federal government along with considerable help from the private health care sector (Burns, 2014, p. 8). Financing health care is a tension among the ethics and values we place on human life. The implication is that the health care system would fail if completely governed by market forces, even though the health care system exists within a general market economy. At some level, health care competes for resources with production of food, production of movies and construction of homes and other numerous goods and services consumed by over 300 million people in a nation (Jonas, Goldsteen, Goldsteen & Jonas, 2013, p. 142). The public financing for the American health care system comes from the state, local and the federal government. Public funding is accountable for more than half of the health care spending. It covers over 27 percent of the U.S population. This percentage includes the aged population, the disabled, the poor, war veterans, children, government employees and Native Americans (Smith, Wertheimer & Fincham, 2013, p. 23). The centre for Medicare and Medicaid compiles the national health expenditure estimating the annual health spending of the entire U.S population. This is done using source of funding for those services (Sundararaman, 2009, p. 8). Medicare financing comes from general revenues, beneficiary premiums and the payroll tax contributions. Medicaid is a partnership between the federal government and the state government to provide health benefits to the disabled and low-income persons. Apart from the Medicare and Medicaid, the U.S government also finances other health care programs for children, veterans, Indians and the federal employees. Employers and the government are the main financiers of the health care in the United States. One may argue that the Americans, through their taxes, they finance their own health care and subsidize the health care for those who cannot afford it (Shi & Singh, 2010, p. 131). As health care in the U.S enters an age of increasing scarcity of resources, it has become very important to define the core principles governing financing and the role of spending to aid in the provision of care. The United States department for Human and Health Services projected that the funding for health care is going double by 2014. This will consume more than 18 percent of the economy. Economists also expect the rate of inflation to increase to around 30 percent during the same time. These figures represent the government’s spending to insure the persons on Medicaid and all other citizens that are uninsured. Adding the costs for covering employees, one can see why the American citizens and politicians are in distress and they are looking for a major overhaul in the U.S health care system. Changing the current principles governing the health care system will be very hard. This is because viewing the possible changes systematically, shows that changing the current health policies and structure is not a good decision (Kuan-Chou & Keh-Wen, 2013, p. 1). Principles governing the supply of healthcare The healthcare delivery system is a multilevel industry that transforms a wide range of resources into essential services required to cater for the population’s healthcare needs. The transformation occurs via a complex set of interactions among the providers, consumers, employers, players and the government. The U.S healthcare industry employs over 10 million workers (Lundy& Janes, 2009, p. 122). When supply economic theories are applied to the health sector, its characteristics are considered as economic goods. The theory of supply is applicable in the pharmaceutical companies in the private sector and the general medical practitioners serving the public sector. The health care output is the amount of care provided and is regarded as intermediate output used in health. Health care demand is a function of the supply of practitioners and facilities (Elhauge, 2010, p. 332). There is a geographic mal-distribution in the U.S because the physicians prefer working in the urban and suburban areas due to higher incomes. Recruiting doctors in the rural areas is very difficult because the access to technology is limited; the working conditions are not as good as that in the urban and suburban areas and the income is also less. Moreover, the U.S is also experiencing specialty mal-distribution. This is because the number of specialists is increasing more than the number of general practitioners. In the last twenty years, the number of specialists has increased by over 100 percent while the number of general practitioners has increased by only 18 percent. The Act for Affordable Care will increase the number of consumers by over 34 million. To manage the increase, president Obama called for an increment in the number of nurses, physicians and physician assistants (Niles, 2011, p. 183). A comparison of the U.S with most European nations shows that there is an aggregate oversupply of physicians in the U.S. From a technological point of view, the nation has highly developed infrastructure for the delivery of medical services. Most of these infrastructures are owned by the private sector. However, the government plays a supportive role. Since the U.S has state of the art technology, highly trained physicians in world-renowned facilities provide the medical services. The U.S healthcare provision is an envy of the world (Johnson & Stoskopf, 2010, p. 376). In response to a shortage in the U.S health care workforce, many health care organizations employ foreign healthcare professionals. This answers the equation’s supply side. The health care manager should consider this strategy and look into the immigrant policy issue, a growing concern on outsourcing and the effects of the English language deficiency on quality of care and patient satisfaction. The health care organizations hire medical assistants to reduce costs. Managers must ensure that this does not affect the quality of health care or the relationship between the health care organization and other professional health care providers (Hernandez & O’Connor, 2010, p. 75). Principles governing healthcare access Despite the technological advances in U.S healthcare, the clinical outcomes are not always better than those from other industrialized nations are. In 2008, the National Scorecard on health care performance ranked the U.S at number 65 out of 100. The national scorecard measures and monitors outcomes in the health care sector, efficiency, equity, quality and access. For preventable mortality, the U.S fell last in 19 industrialized countries. The health care access is the reason behind the less than auspicious health care indicators in the U.S. The lack of health care access can take several forms. The services required may not be available in an accessible place or they may not be available at the specific time they are required. In addition, the healthcare providers may not be culturally sensitive or multilingual in some locations. Routine healthcare may also not be accessible due to lack of funds or insurance coverage. Moreover, an individual may not have regular health care provider and therefore has to receive care from a variety of healthcare providers in different unconnected facilities (Lundy& Janes, 2009, p.122). Health care principles focus on the well-being of individuals, without ignoring diseases, illnesses and the equal health care access by all. It also recognizes poverty as an important cause of ill health. All people must have equal access to healthcare despite their levels of income. Resources affecting health should be equally shared. This is the equity principle (Zweigenthal, 2009, p. 8). Just because the U.S cannot have an equitable distribution of health care, it does not mean that the principle of equity is not valid. If these principles of access were applied perfectly and the U.S could find a way to pay for universal health care without limits, inequalities would cease to exist. Moreover, if the U.S were able to pay for all the medical technology and medicine needed by all residents, access inequalities would not exist. Essentially, if there were unlimited resources in the U.S, inequalities would not exist. The point is that the financial resources available in the U.S are not enough to pay for everything required by the residents. The scarcity mandates the maximization of the available resources. Therefore, the government must decide who gets what (Hammaker & Tomlinson, 2011, p. 95). The Commonwealth Fund recommends that the U.S should expand insurance including Medicaid and create policies that hold insurance companies accountable for ensuring timely access to health care providers and quality care. It also recommends that the health care providers to be held accountable for population health and advanced collaboration across the health care spectrum (Miller, 2013, p. 319). Advantages of the American health care system The government protects the vulnerable populations by defining them and accommodating them. The government also identifies the health care level and assures a specific level is attained. The government may also exclude or include certain unproven or experimental services. Moreover, the government ensures that there is equity in the distribution of health care services and addresses other public health concerns in a manner that compliments its other responsibilities. The Private Health Insurance (PHI) in the U.S is responsible for financing health care services. The cash that flows through the PHI is used to purchase medical technology and infrastructure and to conduct research. It also relieves the government some case loads and costs. It must remain solvent without raising taxes. The PHI enhances personal accountability and limits utilization to an extent that is tolerable to the health care market by using co-pays and deductibles (Fillerup, 2009, p. 24). A patient is now considered as a consumer, which has led to things like better food in hospitals. This was considered irrelevant before. The pharmacists and the nurses have now expanded the services they provide. There are improved business practises regarding the delivery of health care (Hart, 2010, p. 57). The unique health care benefits removed from a given set of insurance benefits has some advantages (Mullner, 2009, p. 124). The advantages include economies of specialization, use of market power to improve the quality of health care, controlling utilization and enhancing the access to care. Moreover, there is expertise knowledge that comes with the specialization and there is better coordination of medical services. The U.S uses electronic media in health care organizations. This is advantageous because it makes it easier to analyze patient data and finding patient’s information is very easy. Moreover, the information is presented in a neat manner and it is easy to note any mistakes done. It is also very easy to track and control diagnostic tests, referrals and other forms of utilization (Perednia, 2011, p.191). Many healthcare facilities have adopted the problem-oriented or the source-oriented methods of documenting (Carroll, 2009, p. 297). The U.S department of health came up with the Indian Act. This made their treatment easier. Before the Act was passed, dealing with the Native Americans was very hard because most of them believed in traditional healing and herbal medicine (Mcdonough, 2012, p. 280). Moreover, the government came up with the Medicaid, which provides medical services to people with limited resources and low incomes (Armstrong, 2011, p. 388). The U.S health care system has provided coordinated care. This includes strategies to make the health care system more cost-effective and responsive to the needs of the people who have complex chronic illnesses (Nicholas & Davis, 2009, p.136). Today, some managed care exists in almost all the insurance coverage available in the U.S. This allows the third party payers to manage the medical care. This has brought numerous advantages to the insurance systems (Devettere, 2009, p. 462). Disadvantages of the American health care system The government revenue is fixed and the healthcare budget operates within the limits of the budget. Therefore, the government only implements the technologies that they can afford. The medical services fee is set, which may limit the funding for new infrastructure and discourage patients from seeing patients whose payments are fixed at low rates. Moreover, there is a disconnection between demand for medical services and the revenue streams. The Medicaid program is mandated to provide care for the poor residents but the federal funding to do so is insufficient (Fillerup, 2009, p. 24). The Private Health Insurance (PHI) has some important disadvantages. Some insurers refuse to insure patients with existing illnesses or patients with high health risks. Someday they may even discriminate against patients with specific genetic markers. Those with a great need for medical care are sometimes not able to access it. Other PHI based on administrative costs charge higher fees to individual insurers and small businesses. The people with the least bargaining power will pay the highest premiums. Unless regulated, physicians have high probabilities of performing diagnostic tests or elective procedures for patients paying full price through PHI than for patients paying limited fees using government insurance (Fillerup, 2009, p. 24). Moreover, employers are having a hard time paying for medical insurance covers for their employees. Most of them are cutting down on the amount insured and some are scrapping off completely the insurance scheme in place (Davidson, 2010, p.182). Although the health sector has experienced rapid employment growth, there are areas where the number of qualified professional is too low. This comprises the quality of care delivered to the U.S residents (Thomas, 2009, p. 9). Furthermore, the community clinics open at late hours and the doctor’s offices are not opened at night. The primary care doctors in the U.S avoid visiting patients in their homes. Moreover, the primary care doctors are paid less than the specialists are. This de-motivates them and adds to their frustrations (Aiguier, Bretaudeau & Krob, 2010, p. 203). In spite of advanced technology, or because of advanced technology, there has been a serious erosion of health care. There is also a serious loss of trust in doctors and the U.S health care system. In addition, there is triple digit inflation in the provision of health care and the U.S health care system has not been able to keep its promise of controlling the health care prices. Furthermore, there is a mentality of medicine-is-a-market-place and the customer-is-king. This mentality has been detrimental in some health care services, teaching hospitals and medical schools (Hart, 2010, p. 57). The unique health care benefits removed from a given set of insurance benefits has some disadvantages. The disadvantages include lack of coordination between the different providers and the time required for coordination. Most of the time the patients are caught in the middle and they do not have any one to protect them (Mullner, 2009, p. 124). Racial and ethnic disparities also exist in provision of health care services in the U.S. The minority may be discriminated by medical providers. Several reviews indicate that there are disparities in the processes and outcomes of care for a wide range of clinical conditions and diseases. The U.S residents do not have equal access to the medical services (Afifi, Anderson, Rice, Rosenstock & Kominski, 2013, p. 5). The U.S is the only developed country that does not provide entire health care access through guaranteed coverage. This makes it very hard for the poor to access preventive care. The health care system’s efforts are towards treatment and not prevention (Mccarthy, Schafermeyer & Plake, 2012, p. 524). Moreover, U.S is the only industrialized country that does not consider the access to medical care a human right. 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