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The Impact of Various Accounting Approaches - Essay Example

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This essay "The Impact of Various Accounting Approaches" discusses policies that are appropriate for the health care system in the United States is imperative. Because the country needs to change its rank from position 43 to another position that fits the position that the country holds…
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The Impact of Various Accounting Approaches
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The impact of various accounting Approached on U.S healthcare reimbursement systems: Ethical and managerial implications AffiliationThe impact of various accounting approaches Introduction The healthcare repayment system is an extremely complex framework of obtaining payment services. However, the most challenging issue facing the reimbursement system in the healthcare systems is the rules and procedures govern it, which keep on changing all the time. This has resulted from the government payers who keep on changing from day to day. Additionally, health care delivery have been influenced over the last sixty years by different reimbursements methods that have evolved from a cost-center to a profit center to know what is referred to as an investment care approach. The evolution of reimbursement systems have brought about many challenges since 1950’s to the present day. However, the accounting changes have led to resource allocation issues that influence directly on the managerial and ethical issues that are relative to all stakeholders. The article examines the how different accounting approaches have influenced on the United States Healthcare reimbursement systems. Additionally, the article further looks at the managerial and ethical implication that the reimbursement systems have on the health care system. The development of the health care system in the United States is approaching crisis and it has been established that there is no compromise on the horizon. This has been because of the increased domination of the sector by the private sector. The main aim or objective of the private sector in the health care system is profit making rather than providing quality medical care for the citizens of the United States (Davis, Davis & Schmelzle, 2013). Additionally, accessibility of medical care in the United States has decreased significantly. According to statistics taken in 2009 by the Institute of Medicine, it was indicated that approximately fifty million American citizens do not have any health insurance. Therefore, public and private institutions play a vital role in the health care cost; hence, measuring the allocation of scarce health care resources within the United States healthcare system. The article further examines that allocation or resources within the classification of the healthcare system in the United States. The main points in the article Various issues have been discussed in the article in relevance to reimbursement system in the United States. However, the main issue is how the reimbursement systems have affected the health care system in America deteriorating the health care system. For example, it has been established that the World Health Organization has ranked the United States the 43rd country in providing quality health care for its citizens. It has been established that there is a crisis in the United States health care system, especially after the introduction of the Medicare and Medicaid to help the old and the poor in the society. The second point in the article is that the hospitals have made their organization a business where they get profits from the patients, especially in the private sector. By so doing, they decreased the quality of health care because between 1973 and 1979 Medicaid expenditures. For example, the expenditures had risen at rate of 15.6% per year; hence, solving the problem of inflating rates of the expenditures become more complex because of political realities that were happening during that time. Therefore, profit making was only beneficial to the private sector and not the government (Burd-Sharps, Lewis & Martins, 2008). In that, the only way or the simplest means that the federal government could reduce the Medicare cost would have been to limit the number of citizens who were eligible for Medicare program. This action has proved to be a difficult one because it has ended up shifting the cost of Medicare on the individual states and cities; thus increasing, the total health care for the patients who feel in these categories. The other issue that the article examines is on the Diagnostic Related Groups, which were introduced after the government shifted the medical control from the federal government to the state control. The DRG is a system that is used in the United States to classify hospital cases in one of the 467 groups where the 467th group is the ungroupable (Davis, Davis & Schmelzle, 2013). The main aim of creating this grouping method was to convince the Congress to use the method for reimbursement in the healthcare system, and replace it with cost-based reimbursement that was in use at the time. For example, an urban teaching hospital may receive $3,000 per hernia another hospital a suburban non-teaching hospital may receive $ 1,500 per hernia. In this case, it was complicated because direct costs of providing episodic services to each patient was unknown making many overhead costs to be allocated. At the beginning of the DRG, the implication of its reimbursements were not realized until later where the calculation of the DRG were driven by estimated average-length-of- stay in the hospital for a case of mix diagnosis. Profit calculation made the revenue constant only allowing the hospital to improve by controlling costs. This made the hospital to adopt differ cost-control strategies where some of them were considered sub-optimal, especially those that were related to patient care (Haseltine & Brookings Institution, 2013). Therefore, it is clear that the DNG systems provided incentives that would help in discharging the elderly patients, but no equal incentive to provide with the appropriate place for the elderly to go. Thirdly, cost control is another issue that is discussed in the article where it was established that large differences in the amounts that Medicare were spent on patients. Additionally, the differences in cost control resulted from the differences in geography. An example, which was given, was that of patients in Miami and Manhattan who received far more aggressive care than patients found in Salt Lake City, Minnesota, Utah, and Rochester. This difference was caused by age, race, sex, and overall health in the community. However, it was established that even patients who received care that is far more aggressive were not in any better position than those that received conservative care. It was established that cost accounting from industry can be effective in bringing down health care cost; hence, being an effective way of costing in the health care system. Lastly, the article discusses about the importance of information technology when it comes to reimbursement in the hospital. This is because through technological knowledge people become aware of things that the hospital requires and offers in terms of services. Hence, reducing the cost of medical care for people who do not have adequate financials to go to private hospitals that no have become and investment center (National Research Council (U.S.)., National Research Council (U.S.)., & National Research Council (U.S.), 2010). In that, many people have opened hospitals not because they want to provide the appropriate medical care for the patients but because they want to gain profits from them. Therefore, providing services that only the rich in the society can afford and the poor and old miss quality healthcare. Importance of the article Although President Obama through the enacting of Obama Care Act tried to ensure that there is equality in the provision of adequate medical care, it is clear that that objective has not been achieved. Because even the insurance companies are taking advantage of the enactment of Act where they find loopholes to ensure that they do no reimburse the patients appropriately through their medical insurance (Roger, 2001). Some of the companies have taken out the some of the services they were offering before the introduction of Obama care. This means that people who depended on the insurance companies cannot be treated for long-term illness or diseases that are expensive. For example, patients with diseases such as diabetes, cancer and other diseases that use a lot of money; conversely, have problems making the insurance companies pay their for their expensive treatment. This article is important because it gives insight on the development of reimbursement of healthcare system in the United States. The article indicates how the United States has been held by the World Health Organization to have the poorest medical system despite of many laws, and regulations been created in relation to medical care (Watcher, Goldman & Hollander, 2005). United States has the world largest population in the world, it is expected that the United States should have the most appropriate medical care for its citizens, but that has not been the case. Additionally, the changing of the reimbursements systems in the country has also played a major role in preventing the development of medical care in the country. This article is vital because it identifies that the hospitals have forgotten what their role is in the community. Where instead of helping people in the community achieve appropriate medical care they have made the hospitals a place where they can make profits and investments centers. For that reason, the article has been enlightening in the sense that it has created a new understanding as to the reason why the health care system in the United States is poor. Additionally, the article has identified clearly how the insurance companies have benefitted from the new reimbursements systems that keep on changing in the country. Where the introduction of Medicare and Medicaid played an integral role in the disruption of the healthcare system as the government funding on the two systems was taken the state government. Some state governments have not managed to handle the pressure to the extent that they are offering medical services that are not adequate to their constituents because of lack of funding. Conclusion In conclusion, having the right reimbursement methods and accounting methods in the country is important because they ensure that the country is healthy and productive. Therefore, introducing policies that are appropriate for the health care system in the United States is imperative. Because the country needs to change its rank from position 43 to another position that fits the position that the country holds. This means that there is a need to improve medical technology not only in the federal government level, but also in the state level to ensure that there is equality in the delivery of health care in the whole country. By so doing, there will be great delivery of medical care that will be equal to all citizens in the United States. Reference Burd-Sharps, S., Lewis, K., & Martins, E. B. (2008). The measure of America: American human development report, 2008-2009. New York: Columbia University Press. Davis, D. C., Davis, S. W., & Schmelzle, G. (n.d.). The Impact of Various Accounting Approaches on U.S. Healthcare Reimbursement Systems: Ethical and Managerial Implications. Journal of Management Policy and Practice, 14(4), 2013. Haseltine, W. A., & Brookings Institution. (2013). Affordable excellence: The Singapore healthcare story : how to create and manage sustainable healthcare systems. Washington, D.C: Brookings Institution Press. National Research Council (U.S.)., National Research Council (U.S.)., & National Research Council (U.S.). (2010). Accounting for health and health care: Approaches to measuring the sources and costs of their improvement. Washington, D.C: National Academies Press. Roger, F. F. H. (2001). Case mix: global views, local actions: Evolution in twenty countries. Amsterdam, Netherlands: IOS Press. Watcher, R. M., Goldman, L., & Hollander, H. (2005). Hospital medicine. Philadelphia [etc.: Lippincott Williams & Wilkins. Read More
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