Managing Health Care Cost

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LIBERTY UNIVERSITY|
Managing Health Care Cost|
How high cost of care affect U.S. Population|

MAXWELL POKU
|

Managing Health Care reform
“The United States spends more on healthcare than any other country in the world but has the higher rates of infant mortality, diabetes and other ills than many other developed countries.”- Reuters In an article reported by Bloomberg newsweek, about the effects of health care reform on business either self-employed or small business. It was noted that, some self-employed people and small employers will begin to feel the impact almost immediately while other won’t notice changes for a few years. The article went on to state that, by 2014, insurance companies will be barred from rejecting individuals because of preexisting conditions. The article went on to describe how many employers are wary in employing more workers since they will have to pay for their benefits. The tax credits for small businesses that have more than 50% of employees’ health benefits, have fewer than 26 employees and pay average annual of less than 450,000 can claim a tax credit of up to 35% the cost of premiums tax year.” “In the past three years, my health costs have increased each year by double digits. That cuts right into the profit margins of my company. For my small business, whether it has 10 or 500 employees, it’s a challenge having enough working capital. But to be competitive and attract the employers as the bigger guys, we have to offer the same benefits package the do” The growing and aging population in the United States has increased the cost of health care. The rising health cost threatens Americans and the spending of income on care has increased. As quoted by the New York Times, “the unrelenting rise in medical cost is likely to wreck havoc within the system and beyond it, and pretty much everyone will be affected, directly or indirectly.” Many people rely on government aid or programs to get treated by participating in the Medicare, Insurance, and Medicaid programs. It is reported that, in 2002, the United States spent about $5,3267 per person on health care. The United Kingdom, a frugal system, spent $2,160 per person in 2202, 41% if the U.S. amount. Four major actors occupy the healthcare stage: purchasers, insurers, providers, and suppliers. According to, Thomas Bodenheimer, MD.,” the high and rising costs are created by forces external to health system, by weakness of a competitive free market within the health system, by rapid diffusion of new technologies, by excessive costs of administering the health system, the absence of strong cost-containment measures and undue market power of health care providers.” The rising cost is a very big problem which is affecting every class and social environment. One of the reasons there is a high cost is because certain people do not go through preventative measure to control their conditions therefore leading to serious and dangerous health risks. The Centers for Medicare and Medicaid Services (CMM) concluded that; “private spending is expected to slow in 2008-2009 to a 15-year low due to the impact of a recession: conversely, public spending growth is expected to accelerate through 2009, in part due to increased Medicaid enrollment and expenditures, something that is typical in a recession.” Health day reported that 14,000 Americans are losing their health insurance each day during the recession. The cost of health care increased with inpatient and outpatient services. In a report by Craton et al, it describes how health care cost was evaluated. “To gain insight into factors driving growth in hospitals spending, we disaggregated the spending trend into its price and quantity components. We used all other prayers” series of the Bureau of Labor Statistics (BLS) Producer Price Index (PPI) for general medical and surgical hospitals to proxy changes in hospital quantity privately insured patients. A study done on the Outlook for the Future...
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