Financing of Health Care
With coinciding concerns about health care costs and the imperative to improve quality of care, health care providers and others face difficult decisions in the effort to achieve an appropriate balance. Such decisions often are addressed in the policy arena. How do policymakers evaluate which health care services should be financed through government programs? How do ethics-related questions and other considerations play into this evaluation process? Is it possible to contain costs and provide accessible, high-quality care to all, or is the tension between cost and care inherent in the U.S. health care delivery system? These questions are central to health care financing decisions in the United States.
For this Discussion, you will focus on the policy decision-making process that determines what types of care are covered by public and private insurers and the ethical aspects of such financial decisions.
To prepare:
• Read the following case study, "Hard Economic and Finance Choices in US Healthcare" (Milstead):
o Case Study 1: Hard Economic and Finance Choices in US Healthcare
Applied economics is all about managing scarce resources. Economics is an amoral field of study: it is neither moral nor immoral. Morality and values are determined by individuals at the personal level and by group consensus or majority opinion at the national level. State and federal governments determine the ‘will of the people' about how to use scarce resources for the good of a nation.
The U.S. health care system is an exemplar of scarcity: primary care physicians, substance abuse treatment centers, trauma centers, registered nurses, and the money to pay for goods and services. Finance is all about how to pay for goods and services. The Medicare Payment Advisory Commission (MedPAC) is appointed by the Executive branch of the federal government to make decisions about what the Medicare program will and will not pay for. In this role, MedPAC makes decisions about medications, procedures and treatments. Examples of MedPAC decisions include coverage for left ventricular assistive devices as a destination therapy, coverage for bariatric surgery, and in 2010, coverage of the drug ProvengeTM. By law, MedPAC is not allowed to use price or cost of any treatment in its decision-making processes.
• Review the information in the Washington Post article "Review of Prostate Cancer Drugs Provenge Renews Medical Cost-Benefit Debate" in the Learning Resources.
• Consider how policy decisions currently are made about what will and will not be paid for and what changes, if any, could improve the process.
• Reflect on how the Washington Post example illustrates the tension between cost and care.
Analysis and assessment of the ethical and economic challenges related to policy decisions such as those presented in the Washington Post article. How does this type of situation contribute to the tension between cost and care? Substantiate your response with at least two outside resources.
Readings
• Knickman, J. R., & Kovner, A. R. (Eds.). (2015). Health care delivery in the united states (11th ed.). New York, NY: Springer Publishing.
o Chapter 11, "Health Care Financing" (pp. 231-251)
This chapter attempts to unravel several of the complexities in America's health care system, and it also provides an analysis of the health care/insurer/patient relationship and how hospitals are actually funded.
o Chapter 12, "Health Care Costs and Value" (pp. 253-270)
Rising costs of health care and potential approaches to constraining growth in health care expenditures are examined in this chapter.
o Chapter 10, "Health Workforce" (pp. 213-225)
This chapter looks at the nature of the supply and demand for health care professionals in the United States.
• Milstead, J. A. (2013). Health policy and politics: A nurse's guide (Laureate Education, Inc., custom ed.). Sudbury, MA: Jones and Bartlett Publishers.
o Chapter 10, "Overview: The Economics and Finance of Health Care" (pp. 191-206)
This chapter breaks down the basic elements of economics as they relate to health care, explaining how consumer choice combined with limitations on what hospitals can supply affects the type of care given.
• Reinhardt, U. E. (2010, Jan 20). State of the nation (a special report): Voices-A good start. The Wall Street Journal, p. R5. Retrieved from the Walden Library databases.
This article describes how the U.S. health care reform bill seeks to obtain better value for the U.S. health care dollar by generating more research into cost-effective care.
• Stein, R. (2010, November 8). Review of prostate cancer drugs Provenge renews medical cost-benefit debate. The Washington Post. Retrieved from http://www.washingtonpost.com/wp-dyn/content/article/2010/11/07/AR2010110705205.html
This article describes a federal review conducted to determine whether Medicare expenditures should be allocated to an expensive prostate cancer vaccine. The author details both sides of the debate on the issue.