The Increasing Cost of Health Care - Research Paper Example

The Increasing Cost of Health Care as New Technologies are introduced The Increasing Cost of Health Care as New Technologies are Introduced Introduction There have been numerous technological innovations in the medical sector in the recent past. This has resulted in the increased use of more efficient treatment alternatives in different medically related subjects. The majority of technological advancements have occurred in the medical device, pharmaceutical, medical supplies, support systems, administrative, and surgical fields. These innovations are in the process of transforming the way in which medicine is practiced. The continued use of new technologically adept methods of treatment is likely to compel policy makers and other medical practitioners to find ways of effectively implementing them. Moreover, implementing new medical technologies in any hospital or clinic is not an inexpensive procedure. This is because medical innovations in the medical sector are taking place at a time when the healthcare sector is also suffering from the scarcity of resources. This has resulted in a need for more rationing of resources, priority setting, and technology management elements. The economic assessment of medical technological innovations is important because it will likely expose the costs as well as consequences of using these innovations in a practical medical setting. Definition of the Problem Even though individual new medical technological innovations can, by themselves, decrease or increase spending and health care, it has been established that when combined together, they have caused the rise of healthcare costs. Technological innovations in the past decade have resulted in the use of new treatments for formerly incurable conditions such as A.I.D.S. and diabetes, while also effecting the use of new medical procedures for tackling secondary diseases as is the case with dialysis patients (Miller & Sim, 2004). Technological advancements have also resulted in the discovery of better quality methods of treating long-term medical conditions. Whether a newly discovered medical treatment will hike healthcare costs or decrease them is something that is dependent on factors such as its effect on the expanse incurred in taking care of an individual patient. The cost per patient also includes the reality of whether the patient will be hospitalized during the duration of the treatment or not. The increase or decrease of healthcare costs when medical technologies are used is also dependent on how often the new technology will be used. For instance, new medical technologies created to cure untreatable diseases or survey the population for certain symptoms will mean that the technology will be used quite often. Other technologies that could reduce costs are new diagnosing implements which are more targeted. In some cases, new technologies could actually decrease as well as increase healthcare costs. For instance, a new vaccine could be quite expensive to produce on a large scale. However, in future it will result in the saving of money that might have been spent in treating the disease (Miller & Sim, 2004). Determining the effect of a new medical technology is not an uncomplicated process. For instance, a research study might establish that a certain treatment is cost effective because it is cheaper than that which was formerly used. However, if this technological innovation is to be used often, it will naturally result in increased costs for the healthcare sector. The Crux of the problem from a variety of perspectives using economic analysis There are numerous factors that determine the generation of different kinds of medical care innovations. According to Dentzer (2009) past research studies have proved that people invest more in healthcare as they grow more financially stable. That means that a healthy national economy is the best setting for the generation of medical innovations. In addition, consumer demand is driven by the increased dissemination, among members of the public, of information about the most recent medical innovations. Another factor that could increase the rate at which medical innovations are created is the inception of health insurance. Medical treatment is for the most part unaffordable for the poorer classes who can only acquire it through private or public health insurance (Pauly, 2005). Health insurance is also important because it provides a measure of assurance to medical researchers and suppliers that they will be reimbursed for the use of their technological innovations whenever patients use them. The continuous investment in research in order to come up with better methods and techniques of treating patients also contributes towards the generation of medical innovations. Competition among health-care based establishments also contributes towards the increase of medical innovations. In order to attract the greatest number of patients, hospitals and other medical facilities have to invest in the ‘safest’ and ‘latest’ medical gadgets. The ambitions of most health care professionals also include personal goals such as tenure, peer recognition, and prestige e latest medical innovations to treat patients. There are also the commercial interests of establishments such as medical device makers and pharmaceutical corporations. A Solution to the Problem of Excessive Cost with the Incidence of Medical Innovations There are different methods that have in the past been suggested as ways to keep costs down in the healthcare sector even as medical innovations increase. Most of them are based on finding ways of doing away with inefficiencies and wastage of resources. This could be particularly effective in innovative procedures generated to aid in disease prevention and management. Waste management, though, is something that is difficult to implement in itself. It would be more successful if it was used as a part of a move to change organizational culture in health-based institutions. In many nations, it is believed that providing universal care which is supervised by the national government is the only effective way of managing healthcare costs. The implementation of universal care allows for negotiated doctors’ fees, price controls, and the existence of policies to determine the generation of new technologies. While this method can be quite advantageous, it is more rewarding to implement a complete cultural change in health-care based establishments. This is the only way through which healthcare costs across the board can be effectively contained. It is harder to implement smaller changes in specific departments because in healthcare, the resistance to any new changes can be quite formidable. Cutting costs is not something that calls for just the medical practitioners to be able to stop the wastage of resources. It will involve additional changes that affect the patients as well as medical personnel. For instance, patients might be compelled to give up their preferred treatments for more cost effective ones (Clancy, Anderson, & White, 2009). Also, medical practitioners may be forced to change the way they deal with their patients in favor of a more time saving and cost effective method. These are changes that will likely be met with resistance in any setting. However, organizational culture change across the board is the only thing that can effect changes such as dealing with the variances in terms of health care costs in different geographical areas without harming the dispensation of healthcare to ordinary patients. The reality is that in many developed nations, the citizens have become familiar with disorganized and expensive health care systems which can only generate increased cost. Effecting cultural change in medical institutions across the board will call for certain important issues in the subject of healthcare reform to be re-addressed. For instance, doctors and other medical practitioners can begin by determining if the aim of the healthcare sector should be to combat death at all costs or ensure that all people have a life that is devoid of medical complications of any variety during their life spans. Another subject of concern revolves around caring for the elderly. There have been discussions that center around the fact that the elderly require better home care and financial support instead of being committed in intensive care units. It is evident that healthcare has been diverted into other purposes in the reality that the healthier nations in the first world become, the more they allocate to healthcare. It would seem that the opposite of that is what should be in force (Pauly, 2005). Even though changing the culture in the healthcare sector is an extremely challenging undertaking, it is obvious that it is quite necessary. Strengths and Weaknesses (benefits and costs) Associated with the Proposed Solution In numerous health-related organizations, the prevailing culture encourages healthcare personnel to adopt qualities such as the acceptance of mediocrity, being risk-averse, and the harboring of suspicion of the plans of supposedly accomplished outsiders. This naturally means that the employees will be wary of accepting any proposals that appear to present a threat to their existing work environment. In most hospitals, the cultural inclinations are well-established; whether they work for the bad or good of the healthcare system as a whole. Moreover, it is possible for change to be encouraged by highlighting the positive aspects of the existing hospital culture and offsetting the negative aspects. According to Chrisman (2007) in medical organizations, the existing strong cultures are a result of visible and consistent leadership, as well as performance feedback. Moreover, the cultures of medical organizations, just as those of other business organizations, cannot be formed or changed directly. Culture is something that emerges from among a group of people who labor and work or live together. Organizational culture cannot be formed as a result of strategic implementation of definite policies or even the creative leadership provided by visionary executive directors. It has to emerge by itself; after which the organization in question can ensure that it is constantly under vigilance so as to be preserved. There are ways through which cultural change in health related organizations can be ‘helped’ to come into existence. This is mainly accomplished by generating awareness among the healthcare employees, patients, and other stakeholders that there is a need for change to be embraced in the healthcare sector. This is of great importance because the reality is that every healthcare worker in a healthcare based organization has a practical but distinct role within the establishment. To generate a new culture, it is necessary for each worker to be stimulated to find the impetus within him or herself to perform at his or her best ability so as to inspire organizational change. One other way through which change can be realized is through implementing changes within the educational or training system in the healthcare sector (Bozic, Pierce, & Herndon, 2004). Teamwork could also be encouraged during training so as to encourage a situation whereby collaboration is an ordinary aspect in the healthcare sector. When this is encouraged while medical practitioners are still being trained, it will result in generating a different type of work culture in the future. In the present healthcare industry, change is inevitable. Healthcare stakeholders such as patients, medical practitioners, telemedicine programs, outpatient clinics, and home health agencies all have to come together and review their practices, relations, and even systems of delivering care. In the light of realities such as diminishing financial resources, all facets of healthcare will have to go through change in order to remain relevant. There will have to be changes in different aspects of hospital culture such as the inclusion of partnerships in order to reach objectives. Advantages and Disadvantages There are different advantages and disadvantages involved in effecting culture change in health-related organizations. Some of the advantages include: Employee engagement- Changes made to organizational culture will affect employees and inspire them to aim for more than just realizing organizational objectives Attraction of New Clients- Change in organizational culture is likely to impress consumers who feel that the firm is changing itself so as to be able to cater to their demands in a more efficient way. This means that the image of the medical organization that undertakes cultural change becomes more esteemed among consumers and may even attract more. Boosting Financial Revenue- Effecting cultural change in an organization will result in more efficient practices and time saving strategies as every worker strives to accomplish his or her best through self-motivation. This will naturally result in saved costs and thus improved proceeds. Disadvantages The Possibility of making the Wrong Choice - Healthcare-based institutions, like numerous other business organizations, are eager to implement improvements in different aspects; including that of its culture. This can be both advantageous as well as disadvantageous in different settings. This can be particularly dangerous if the element to be changed is the organizational culture. In the past, there are numerous business organizations that have presumed that progress can only be achieved through change. Sometimes this is unnecessary; and organizational leaders who wish to implement changes as a way of progressing may just be impatient to see some semblance of change. However, particularly in cases that involve changes in organizational culture, change will manifest in due time, by itself, and cannot be rushed or imposed on the personnel. Ratio of Cost-to-Benefit- Change takes time and training, and is not likely to come cheap. There is also an opportunity cost that accompanies every change. For instance, investing a large fraction or percentage of a hospital’s equipment budget on purchasing new computers may mean that there will be delays in paying for the upgrading of other equipment. There are also other intangible costs that come with the implementation of cultural change like customer satisfaction and the fluctuation of workers’ morale in the course of the adjustment period. Internal Resistance- According to Anderson, Frogner, Johns, & Reinhardt (2006) people resist organizational change due to the fear of the unfamiliar and a lack of information and statistics on how to operate once the change has been implemented. In an industry such as the health industry, culture change will include the physicians having to change the way they relate with their patients, among other things. This could be perceived as being quite threatening and could actually prompt disgruntlement and outright rebellion among the medical personnel. Deciding on the Wrong Solution- Many times, an organization will plan on cultural or other large scale changes as a way to solve an existing problem. However, it could be quite dangerous to presume on the root cause of an existing problem if a solution is decided upon prematurely. If an organization’s directors do not take into account the real cause of the organization’s problem, how the organization’s stakeholders will be affected by the decision for change, and plan to counter any negative probable consequences which will come with the implementation of the change, they may be unable to sustain the change even if it is achieved for a short period of time. Conclusion In any healthcare-based institution, cultural change cannot be implemented by actual rules and regulations. The only way to encourage the staff to embrace cultural change is by educating the personnel and creating awareness about the need for change. To assist this process, an organization can seek to ensure that it has less tolerance of subversive practice such as mediocrity, corruption, or even the acceptance of low standards of performance. This means that if it is established by a hospital’s executive directors that the medical organization is providing poor care, they should take immediate action to correct the situation even if it means stopping to provide it if the hospital does not have the necessary resources to present it for the patients in the best form. To help in sustaining a good culture, hospital directors can also ensure that they provide rewards or even incentives for those who outdo themselves in furthering the acceptance of the good or preferred culture. References Anderson, G. F., Frogner, B.K., Johns, R. A., & Reinhardt, U. E. (2006). Health Care Spending and Use Of Information Technology In OECD Countries. Health Affairs, 25(3), 819-831. Bozic, K. J., Pierce, R. G., & Herndon, J. H. (2004). Health care technology assessment- Basic principles and clinical applications. J Bone Joint Surg Am., 86(A), 1305–1314 Chrisman, N. J. (2007). Extending cultural competence through systems change: academic, hospital, and community partnerships. J Transcult Nurs., 18(1):68S–76S. Clancy, C. M., Anderson, K. M., & White, P. J. (2009). Investing In Health Information Infrastructure: Can It Help Achieve Health Reform? Health Affairs, 28(2), 478-82. Dentzer, S. (2009). Health Information Technology: On the Fast Track at Last? Health Affairs, 28(2), 320-321 Miller, R. H., & Sim, I. (2004). Physicians’ Use of Electronic Medical Records: Barriers and Solutions. Health Affairs, 23(2), 116-126. Pauly, M. V. (2005). Competition And New Technology. Health Affairs, 24(6), 1523-1535. Read More