Application: Efforts at Containing Costs in Health Care
Many people believe that health care in the United States is unaffordable. Do you agree? If so, what can and should be done to address this?
For this Application, you will propose ways to contain costs by altering demand or supply in one particular area of the health care industry. As you do this, it is important to consider the distinction between the costs incurred by particular consumers, providers, and insurance companies or payers versus the overall expenditures endured throughout the health care system. Although some strategies may shift the financial burden from one entity to another, this assignment asks you to take a broad, analytical view and examine the potential impact of cost containment efforts on society as a whole.
To prepare for this Application:

• In your view, are the overall costs associated with health care too high? On what grounds do you base your conclusion?
• Select one of the following submarkets of health care:

o Physician services
o Nursing services
o Medical technician services
o Physical facilities (e.g., hospitals, specialized, imaging, long-term care)
o Medical technology
o Pharmaceuticals
• Review this week's Learning Resources, including the articles "Cost Shifting Does Not Reduce the Cost of Health Care" and "Market Failure and the Failure of Discourse: Facing Up to the Power of Sellers."
• Use the Walden Library and credible websites to conduct research on cost containment efforts related to this submarket. Find at least one resource that describes a specific effort to address costs in this health care submarket in relation to supply or demand of the service or good. Evaluate the strengths and weaknesses of this approach.
• With regard to this submarket, what else do you think could be done to contain costs? What specific aspects of supply or demand could be shifted to help bring down market price or otherwise contain costs?

• Evaluate possible unintended consequences that may result from these efforts.

• Identify one specific approach for cost containment that you would recommend. Do you think this approach would reduce-or increase-overall expenditures in the long term? Could the results differ in the short term? If you are proposing a strategy that might increase total expenditures or shift the costs to another entity, evaluate your rationale for selecting it and be prepared to support your argument.
Write a 2- to 3-page paper in which you address the following:
• Briefly summarize your views on whether the total expenditures for health care in the United States are too high. Provide your rationale, including the criteria you are using for your assessment.
• Propose one specific approach to help contain costs in some way. How would supply and demand be affected? Explain how this shift could be brought about.
• Describe the benefits of this approach. How much do you think this approach would lower market price? Could the outcomes differ in the short term and long term?

• Assess potential unintended consequences of this cost-containment effort.

• Do you think this is a feasible approach for reducing overall costs? Why or why not? Provide the rationale for your response.