Essay on Healthcare Costs

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Healthcare costs

There are few topics as controversial and important to the American electorate than that of healthcare. This sample paper is a brief introduction to a very complex topic. Ultius offers a broad range of essay writing services including the economics of healthcare finance.

Healthcare forms the basis of entire political platforms and can be seen as the dividing line between major strains of American political thought. Whether or not a person supports government-funded healthcare can be a clear indicator of their political affiliation. In order to test the costs of competing healthcare systems, pilot programs can be instituted by various states to determine the program's efficacy. 

Vermont healthcare pilot program: bundled payments

Pilot programs are informative as tests of a given piece of legislation. For the case of healthcare, there is pressure to find a new and affordable way to provide medical care to people with dire financial circumstances. One initiative has been implemented on behalf of the Vermont Legislature. This initiative outlined a way to:

“provide comprehensive, affordable, high-quality, publicly financed health care coverage for all Vermont residents in a seamless manner regardless of income, assets, health status, or availability of other health coverage”  (Vermont Legislature, 2011, p. 1).

The details of this initiative included a comprehensive payment system that is done over a given time period. In this way, patients would not have to incur high costs at the time of their visit. Ultimately, while this program has proven to reduce healthcare costs, it has impacted overall care quality and is difficult to implement across different providers.The program was effectively implemented in Vermont and across a wide range of providers.

According to Alan Panebaker (2011),

"the state and hospital association applied to operate programs that would include bundled payments rather than a traditional fee-for-service payment where patients pay for each operation, test or visit individually”  (n.p.).

The paradigm shift from an 'on-notice' payment to a fee is much more effective for the patient and provider because they can retain financial sustainability. For example, cost management in hospitals is one area where financial sustainability is of critical importance. Vermont has initiated this pilot program in the hopes that it will be a great solution for the national stage as well. Ultimately, the pilot program’s vision for

“moving close to a single-payer system and paying a single price for all of the health care services needed by a group of people for a fixed period of time” (Panebaker, 2011) is a progressive program that has the capacity to change the way healthcare functions.

While the costs are reduced in this pilot program, it does not effectively increase care quality. For example, Peter Hussey et al (2012) conducted an in depth study of pilot programs like these. The researchers concluded that:

“the introduction of bundled payment was associated with: (1) reductions in health care spending and utilization; and (2) inconsistent and generally small effects on quality measures”  (Hussey et al, 2012, p. 75).

Further discussion of pros and cons

Clearly, there are some promising aspects of this pilot program. People’s bills would be reduced and it would be more economically efficient for the providers to handle it, and may be an acceptable option for those who oppose universal healthcare. However, while there is some evidence that the Vermont and other programs may provide some support to reduce healthcare programs, not everyone supports them. Although Hussey et al. (2012) found that there were few improvements to the quality, this pilot program should be evaluated further. It is vital that the providers still retain the same quality as the system intends to provide. 

This pilot program should be evaluated within the context of healthcare reform (sometimes called 'Obamacare' of the last decade). The effects, advantages, and drawbacks of healthcare reform under Obamacare are complicated and faced start-up issues. The Vermont pilot program also posed some implementation problems. For instance, coordinating among many different providers is a formidable challenge.

Conclusions

Given that this program is only being done in one state, it may not be a solution for the whole nation. According to Jim Hester, who was head of the committee that implemented the Vermont pilot program, entire state systems much change (Panebaker, 2011). This transformational change implies complex coordination among a plethora of different healthcare providers. Such cohesion may be impractical or take too long to implement. This may suggest that this solution may not be as comprehensive, but just a shortterm fix instead. Finally, the report by Hussey et al (2012) found that implementation of the changes in Vermont were quite difficult for providers, such as doctors and hospitals. The difficulties associated with the plan may suggest that national implementation and scaling may not be worth the effort if it will not work appropriately. 

References

Hussey, P., Mulcahy, A., Schnyer, C., & Schneider, E. (2012). Bundled Payment:  Effects on Health Care  Spending and Quality. Evidence report/technology assessment, 208, 1-76.

Panebaker, A. (2011, December 11). State to try "bundled" health care payment pilot program. VTDigger.org: Independent, investigative news for Vermont. Retrieved February 9, 2013, from http://vtdigger.org/2011/12/11/state-to-try-bundled-health-care-payment-pilot-program/

Vermont Legislature. (2011, May 26). No. 48. An act relating to a universal and unified health system. Vermont Legislature. Retrieved February 19, 2013, from http://www.leg.state.vt.us/docs/2012/Acts/ACT048.pdf