Introduction
The economy plays a significant role in influencing and controlling a big part of healthcare. The US healthcare accounts to an average of $2.5 trillion which is equivalent to almost 18% of the gross domestic profits. The United States of America administration places a lot of emphasis on the healthcare system that it accords its citizens and strives to ensure that majority of the American citizens have access to ample medical care at affordable rates.
They also strive to subsidize the costs by using various methods. This piece will discuss the problems of healthcare, the causes and effects of the economy on healthcare, solutions to the healthcare problem, a comparison with other countries and a brief conclusion on the impact of the economy on healthcare.
Problems that the healthcare sector experiences
Healthcare is very expensive to any entity or government. Many citizens, employees and employers cannot adequately afford healthcare, hence, the need for different means of reducing costs. Healthcare costs have skyrocketed over the past years and this has greatly affected the country. Due to this, more and more patients have been unable to pay their medical bills because it has become unaffordable to them especially after the recession (Why reform healthcare 2009).
Healthcare coverage does not cover all citizens as 25% of Americans have little or no insurance coverage. This translates to a quarter of the population with significant problems when faced with a health problem.
The unemployed are majorly disadvantaged as far as healthcare is concerned. Statistics show that a 1% increase in the unemployment rate leads to a 0.59% increase of the uninsured meaning that their health coverage will be very expensive. Insurance firms have high premium rates that are not affordable to many, and the firms may increase them in case one has a pre-existing condition or disease and in some cases they may even deny people coverage.
Healthcare fraud is also another factor which heavily affects the healthcare industry (Why health care’s economic impact matters 2009). Some doctors take advantage of the people by overcharging them or taking them through steps that are irrelevant and not necessary so as to boost their profits.
Almost 51% of small businesses do not give insurance coverage to their employees, leaving their employees with serious problems forcing them to self sponsor themselves.
Effects of the economy on healthcare
It has become hard for employers to cover their employees, forcing some companies to lay off some employees in order to minimize the high costs incurred from the medical coverage (The economic impact of health care reforms 2009). The high healthcare costs have forced some employees to restructure their healthcare plan so as to include the employees in incurring the costs. This is through implementing a cost sharing plan meant to cut costs by sharing the overall healthcare costs between the employer and the employee.
Impact of the economy on healthcare
The economy has led to an improvement in the quality of healthcare as more funds are channeled to this field. This has led to groundbreaking advancements in medicine, research, improved health and cheaper and affordable alternatives to the more expensive procedures. This has also led to the eradication and cure of a lot of diseases.
The economy has also aided and also affected the healthcare industry both positively and negatively. In one way, it has reduced the costs of healthcare significantly due to subsidizing and sharing the rates with the government, but in some cases such as the time of the recession the government was forced to make cuts in health care funding. This led to cases like the firing of employees as healthcare premiums become very expensive.
Impact of healthcare on the economy
Due to the high healthcare costs, a lot of funds are channeled to the health sector hence, putting a strain on other sectors of the economy (Obamacare a major issue 2012). This sector alone accounts for nearly 18% of the gross domestic product. This leads to loss of investment income as the high insurance rates do not favor most people. There is less charity giving as most people do not have enough to give out due to the straining health insurance costs. Layoffs are also common so as to cut costs.
Causes of high costs in healthcare
Healthcare procedures and medicine is expensive. Consequently, the costs of healthcare premiums are higher. Another factor is the first and last 10 days of one’s life. This refers to the increased progress in the possibilities of saving pre-mature babies and extending the lives of the elderly, though these factors are positive the costs for catering for these improvements are high.
Lawsuits healthcare facilities face is also another problem. Due to this, many doctors over test their patients in order to avoid law suits for not checking everything in case a complication arises in future. This leads them to order tests like MRIs and colonoscopies for the sake of avoiding such lawsuits.
Less competition from the doctors increase the rates as most patients do not even know the prices on the medical bills. Patients undergo procedures knowing that the bill will be footed by their insurance coverage. They do not compare prices from the different hospitals and doctors. The US budget for the healthcare sector is twice as much compared to the other developed countries.
Solutions to the healthcare problem
Due to the urgency and need for a more convenient healthcare plan, a number of factors, if well implemented, can majorly aid in improving health care in relation to the economy. Reforms should be put in place so as to improve issues pertaining to healthcare as well as minimize and decrease healthcare costs.
The government should aid implementing measures solely aimed at improving healthcare quality (Medicare prescription drug, improvement and modernization act of 2003 2007). This can be achieved through funding various projects aimed at coming up with cheaper and more affordable alternatives to the expensive ones.
This could be in the form of funding organizations and the government with enough funds to help them conduct extensive research geared towards coming up with effective ways of dealing with the various diseases. The funds could also be used to enable the organizations to acquire quality equipment and skilled personal that will provide their professional input which, when combined with the better capabilities of the equipment, will be in a position to achieve good results.
The government can also cut costs on some medical practices by also chipping in on some costs or even reducing taxes so that the commodities become affordable to the people. The government should also come up with laws that cover the employees through a fixed health coverage cost for the employees of some companies especially the multi-billion dollar firms.
Group health insurance is also a very effective way of improving healthcare costs as the employer aids the employee in covering the insurance premiums. This would be more costly if the employee was left to cover these costs on his own, as self-sponsorship is very expensive and costly.
The government should also put more funds into hiring and staffing of the hospitals i.e. the doctors and nurses. Most government medical institutions claim that they are under staffed hence, in order to maintain and cater for the medical services the costs are higher so that they may be able to function.
Subsidized healthcare to those over 65 years will also prove useful. Those over 65 spend a lot of money on healthcare due since advanced age comes along with health complications. Another advantage to this is because due to the fact that those over 65 are retired they may not be in a position to cover some costs if they occur as they may be too costly for them to cover, hence, the need for government intervention to cover such cases.
Measures should be put in place to prevent any citizen from losing healthcare coverage due to the fact that one has a pre-existing condition. This is an important and serious issue as some firms do not cover such cases which make it hard for those concerned to be able to cater for their medical bills or even the high premiums.
The government should offer subsidies to small businesses to enable them to have more capital to cater for their employee’s medical premiums (The economic effects of health care reform on small businesses and their employees 2011).
This measure is important because small businesses are the ones who are majorly affected when it comes to health care. Due to the small capital that they have, they opt to cut costs by layoffs so that they can manage to continue with business and operate effectively. This will lower unemployment and boost the medical field significantly, below is a table from the small business majority organization.
The SBM-Report
* Cumulative numbers reflect a 10-year period, 2009-2018.
Children below the age of 26 should be able to be put on their parent’s health plan to enable them to also be covered in case of any medical complications. This could go a long way to cater for those who are not yet financially stable or not yet employed so that they may also be able to effectively cover their medical costs.
Preventive measures should be put in place to avoid or prevent some medical cases that can be avoided. The main strategy here is to reduce the long term costs by treating or preventing cases at an early stage.
This could be inform of giving out vaccines to the people e.g. this can apply to cases that are meant to prevent the outbreak or spread of a disease and also in the case of travelers to prevent the spread of a disease through vaccine administration. This could also include giving out free services and vaccines aimed at cutting long term costs, this could include setting up free institutions where things like tests can be administered to prevent or aid in dealing with medical complications early.
Prescription drug discounts on the costs of the medicine is also effective as they will aid the buyers and citizens in minimizing the costs hence, making them affordable. Some prescription drugs are very expensive and that makes them unaffordable and unattainable to a very big portion of the people who need them.
Spreading the insurance policy to cover a lot of the citizens is also a very important factor. This is mainly because if more people are insured it will mean that the insurance firms will be able to get more profits, and in the long run this will lead to decreased premiums to the general public.
This can be attributed to the fact that due to the spread of insurance cover to the young it will mean more capital to the insurance firms and less spending as a young person hardly requires a lot of medical coverage compared to an aged individual, hence, leading to the cut in costs.
Measures should also be put in place to prevent healthcare frauds as some medical experts are using their field illegally with an aim of getting more profits. This translates to high costs to be met by the insurance companies which force them to raise premiums so as to be able to cater for such services, hence, the need for strict penalties and policies to stop and prevent such cases.
Conclusion
The economy plays a major role in the running of the healthcare sector (Impact of the economy on healthcare 2010). The healthcare funding by the economies budget which is nearly 18% makes it possible for a lot of benefits to be realized.
Healthcare costs become affordable to a lot more people and the quality is improved leading to better medical standards and breakthroughs. This is made possible through government funding for things like research and facilities. Due to this and many other factors the economy impacts the healthcare significantly.
Works Cited
Impact of the economy on healthcare 2010. Web.
Medicare prescription drug, improvement and modernization Act of 2003. Web.
Obamacare a major issue 2012. Web.
The economic effects of health care reform on small businesses and their employees 2011. Web.
The economic impact of health care reforms 2009. Web.
Why health care’s economic impact matters 2009. Web.
Why reform healthcare 2009. Web.