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According to Shi & Singh (2008), ownership of the health care system in the United States, is mostly by the private sector, even if federal, county, city, and state governments own certain facilities as well. The U.S health care system has remained a complex problem to most of American citizens over a number of years. This comprises of a number of independent medical practices, and provider organizations and partnerships; public and not-for-profit institutions for instance nursing homes, hospitals and other facilities offering specialized care as well as main privately held corporations.
In the United States, health care is considerably the largest service industry. But more threatening than its size, conversely is its complexity nature. The U.S. healthcare system is characterized by the healthcare labor intensive, and in addition the functions and types of its increased personnel change Not only is healthcare labor intensive at all levels, but also the types and functions of its numerous personnel change occasionally to adapt to new knowledge, technology, and means of offering healthcare services.
Owing to the fact that the U.S healthcare system is associated with development, medical betterments frequently bring about new problems even when the old ones are yet unsolved. The sudden increase of medical awareness that formed narrowly distinct medical specialties has intensified an enduring limitation of the medical care in America. The delivery of advanced healthcare calls for support of a fabulously complex infrastructure that allows many chances for patients to fail from succeeding in its narrowly defined specialists and services. In addition, this system has been found to be feckless in ensuring even a scrap of collective coverage. It is apparent that the complexity and size of healthcare in the United States leads to its persistent problems of inadequate consumer access, uncontrollable costs, and inconsistent quality (Young, 2010).
Even though American citizens gain from most of the health care investments, the latest rapid cost growth, matched with general economic retardation and increasing federal shortage, is putting immense strains on the systems that are involved in financing health care, and this includes public insurance programs for instance Medicaid and Medicare as well as personal employer-sponsored health insurance treatment. It has been found that from the year 1999, the family insurance premium for employer-sponsored health coverage have heightened by 131 percent, putting increasing cost problems on workers and employers. In the case of worker, their wages grow at a much slower rate as compared to costs of health care, while most of them find it hard to afford out-of-pocket expenditure (Porter & Olmsted, 2005).
The U.S government programs, for instance Medicaid and Medicare, provide reasons for a substantial share of health care expenditure, though the rate at which they increase is slower than that in private insurance. The Medicare spending per person has increased at somewhat slower rate as compared to the spending of private health insurance, at roughly 6.8 versus 7.1% yearly respectively as from 1998 to 2008. Similarly, Medicaid expenditures have increased at slower rate as compared to private spending, even if registration in the program has improved in the present economic depression, which may bring about increased Medicaid expenditure statistics soon (Shi & Singh, 2010).
Since the issue of increased costs is of greater concern, it is important to identify the factors that result into this health care problem. The major factors considered include technology and prescription drugs, chronic diseases, and administrative costs. A variety of remedies against the problems of increased cost have also been put in place and they include investment in information technology, improving quality and efficiency, adjusting provider compensation, government regulation, prevention of diseases, increasing consumer involvement in purchasing, and altering the tax preference for employer-sponsored insurance.
Technology and Prescription drugs
Studies by Porter & Olmsted (2005) have shown that over a long period of time, spending on prescription drugs and new medical technology has been a leading contributor in the rise of overall health spending; though the expenditure rating on prescription drugs has slowed down in recent years. A number of analysts put forward that the accessibility of more expensive, advanced technological services as well as new drugs stimulate health care spending. This is because the development costs of the products have to be reimbursed by industry and due to increased consumer demand on effective products and services even though they are not inevitably cost-effective.
According to Young (2010), the nature of health care in the United States has been modified significantly over the previous century with greater incidence of chronic illnesses and longer life spans. This has put fabulous demands upon the health care system, especially an increased demand for treatment of enduring illnesses and long-standing care services for instance nursing homes. It has been approximated that health care spending for the intervention of chronic diseases account for about 75 percent of national health expenditures.
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It is approximated that about 7 percent of health care spending are for administrative costs for example billing and marketing, and this part is low to a greater extent as compared to the Medicare program whose administrative costs are less than 2 percent of health care expenditure, and this is what is ran by the U.S. federal government. Other individuals reason that this public-private system which is a mixed system brings about large profits as well as overhead costs that are making the health care spending to go high (Shi & Singh, 2008).
The commencement of the economic recession and a new administration demonstrate an open opportunity for health care reform as well as controlling the costs for health care. Nevertheless, as from the year 1960, the efforts for Government of America to operate health care costs have not realized long-term result, motivating a debate regarding the proposals that are really able to adequately reduce costs. Nonetheless, spending has been rebounding acutely while the health sector appears to have completely explored former savings and a repercussion relaxed most of the policies of managed care, mainly limitations on consumer choice. The varied proposals presently in the policy showground are divided generally by debate concerning a more substantial role for government concession or market-related models depending on competitive coerces (Porter & Olmsted, 2005). The U.S. government has come up with remedies to combat the problem of increasing cost of health care. The following are the remedies against the problems of increased cost.
Investment in information technology
According to Young (2010), the increased application of new technology, for instance electronic medical records (EMR), has time and again been advanced and researched to explore its potentiality to more expeditiously share both information and cut down overhead costs. The federal funding amounting to 19 billion dollars has already been apportioned to bring about uniformly upgrading of health. The chief component of President Obama's administration health reform plan represents that the progress to invest in information technology has acquired considerable traction.
Improving quality and efficiency
A variety of go-aheads in play that target to assisting making the health care system extra higher quality and efficient, and therefore more cost-efficient. Taken as a whole, diminishing unjustifiable difference in medical practice and unneeded care is considered as a priority, especially geographic variation, because elevated spending on health care in given geographical areas has been found not corresponding to improved health outcomes. A number of experts approximate that, up to 30 percent of health care is superfluous hence stressing the requirement to make the health system more efficient and do away with this gratuitous spending (Porter & Olmsted, 2005).
Adjusting provider compensation
America's present system of provider compensation pays medical attendants a specified fee for every test or procedure, for instance as determined by the Medicare Physician Fee Schedule guiding principle for the approximate value of about 10,000 general practitioner services. Presently, there are proposals to overhaul some provider payments to ascertain that fees paid to health practitioners motivate health and value outcomes, instead of the volume of care. The main purpose of doing this is to do away with unneeded care and consequently bring down costs. There is an increasingly stressed research on comparative effectiveness as a way to find out those treatments that are most effectual for specified circumstances, so that to make available the necessary information for doctors as they make the most dependable alternatives for patients' care (Young, 2010).
Mentioning the accomplishment of the Medicare program in managing the spending per person for the past period and warning that market-related approaches joined with more outstanding individual fiscal responsibility can disfavor those with restrained fiscal resources and make barriers to demanded care, various policymakers encourage more government participation in the health care sector. Evaluators reason that such regulation stifles invention and that market-related approaches are more cost-efficient and will give consumers a broader range of alternatives (Harrington, et al. 2004).
Prevention of diseases
The encumbrance of persistent diseases, for instance cardiovascular disease and diabetes, has risen considerably; both of these persistent situations are experienced to be associated with smoking, diet, and obesity, and are very costly to care for over extended periods of time. It is fortunate that proposals have been submitted to stress on prevention by giving financial motivators to workers to get involved in prevention and wellness, so that to bring down the prevalence of these situations and keep away from incurring the long-run costs of medical intervention. Nevertheless, it is uncertain about the amount of prevention programs that will effectively cut down costs, as in contradiction healthier individuals will possibly live and benefit form the health system longer. For the individuals who are already suffering from persistent diseases, disease administration endeavors to ameliorate and reorganize the treatment routine for chronic, common health conditions (Young, 2010).
Increasing consumer involvement in purchasing
It has been found that supporters of consumer-driven health care think that better price transparency would make consumers extra price sensitive as well as more prudent purchasers and therefore save employers and consumers money. Of the main forms present, is tax-favored health repayment accounts, to which employers make a payment funds that are handled by the employee to use on main health care as she directs. Critics of the user-directed approach bring about concerns regarding the possible wallops that the higher cost-sharing would exert on lower income individuals and concerning the potential for the new preparations to be unreasonably utilized by healthy people, moving sicker groups to extra expensive kinds of insurance (Harrington, et al. 2004).
Altering the tax preference for employer-sponsored insurance
Presently, workers do not pay payroll or income tax on the money their bosses use on their health insurance, in spite of of the cost of those reimbursements. Some present health reform proposals put forward changing or eliminating the tax exception for employer- sponsored health care to assist funding the costs of increasing coverage besides reducing motivators for the most generous and hence costly health strategies (Young, 2010).
Costs have come out as a fundamental element of any government health reform attempt. As policymakers make suggestions with plans to ordain comprehensive health reform, costs will certainly go on to be at the head of the bordering policy debates.