Health Care Market Analysis

1701 Words4 Pages
bulb-icon

Recommended: Health care cost in the united states essay

The Health Care Market The US health care sector is large and growing – health care spending in 2011 amounted to $2.7 trillion and 18% of GDP (Gaynor, Ho, & Town, 2014). In fact, approximately half of health care output is allocated via markets. Although most Americans like to think that the U.S. has the best health care system in the world, the fact is that Americans pay far more for health care than any other country (NCHQA). Processes generated within health care systems can be evaluated in two ways: 1) by examining factors that influence health; and 2) measuring what medical care is ideally supposed to produce (Hicks, 2014). Some of these ways will be visited in this paper. This paper will discuss several aspects of the health care market, …show more content…

Rose Hoban notes that according to Kevin Schulman, director of health sector management at the Fuqua School of Business, there little evidence that mergers result in substantial changes on the ground in terms of service provisions (2013). She also notes that David Dranove of the Walter McNerney Professor of Health Industry Management at Northwestern University’s Kellogg School of Management share a similar perspective. Dranove suggests that the result is that the people end up with organizations that have accumulated market power but haven’t really changed the way health care is …show more content…

There are several benefits of being a part of an HMO, especially for the providers. For instance, under some managed care organizations (typically IPAs or PPOs), providers are provided a straight salary (Hicks, 2014). Under salary compensation, a physician’s income is not affected by treatment choices made. Also, under another alternative, capitation, a physician receives a certain sum per patient, irrespective of what services are provided to the patient (2014). The disadvantage with that is that an extreme form of capitation would pay a primary care physician receives a certain sum per patient and makes him or her financially responsible for all care (2014). Hicks posits that this provides a very strong incentive to limit the care provided and puts the physician at great risk if a patient should need treatment for a catastrophic illness

Show More
Related

  • The Broken Healthcare System of The United States

    1498 Words  | 3 Pages

    An issue that is widely discussed and debated concerning the United States’ economy is our health care system. The health care system in the United States is not public, meaning that the states does not offer free or affordable health care service. In Canada, France and Great Britain, for example, the government funds health care through taxes. The United States, on the other hand, opted for another direction and passed the burden of health care spending on individual consumers as well as employers and insurers. In July 2006, the issue was transparency: should the American people know the price of the health care service they use and the results doctors and hospitals achieve? The Wall Street Journal article revealed that “U.S. hospitals, most of them nonprofit, charged un-insured patients prices that vastly exceeded those they charged their insured patients. Driving their un-insured patients into bankruptcy." (p. B1) The most expensive health care system in the world is that of America. I will talk about the health insurance in U.S., the health care in other countries, Jeremy Bentham and John Stuart Mill, and my solution to this problem.

    Read More

  • The Merger of Two Competing Hospitals: A Case Study

    3362 Words  | 7 Pages

    Zuckerman, A.M., Healthcare mergers and acquisitions: strategies for consolidation. Healthcare Financial Management. 2011 Summer; 27(4):3-12; discussion 39-41.

    Read More

  • Persuasive Essay: The United States is not The Greatest Country in The World

    1772 Words  | 4 Pages

    Despite the established health care facilities in the United States, most citizens do not have access to proper medical care. We must appreciate from the very onset that a healthy and strong nation must have a proper health care system. Such a health system should be available and affordable to all. The cost of health services is high. In fact, the ...

    Read More

  • Problems With the U.S. Healthcare System

    1646 Words  | 4 Pages

    The U.S. expends far more on healthcare than any other country in the world, yet we get fewer benefits, less than ideal health outcomes, and a lot of dissatisfaction manifested by unequal access, the significant numbers of uninsured and underinsured Americans, uneven quality, and unconstrained wastes. The financing of healthcare is also complicated, as there is no single payer system and payment schemes vary across payors and providers.

    Read More

  • Characteristics of the U.S. Health Care Delivery System

    613 Words  | 2 Pages

    The United States health care system is one of the most expensive systems in the world yet it is known as being unorganized and chaotic in comparison to other countries (Barton, 2010). This factor is attributed to numerous characteristics that define what the U.S. system is comprised of. Two of the major indications are imperfect market conditions and the demand for new technology (Barton, 2010). The health care system has been described as a free market in

    Read More

  • Managed Care: An Overview and Its Uncertain Future

    1114 Words  | 3 Pages

    One being the Health Maintenance Organizations (HMO), which was first proposed in the 1960s by Dr. Paul Elwood in the "Health Maintenance Strategy”. The HMO concept was created to decrease increasing health care costs and was set in law as the Health Maintenance Organization Act of 1973, after promotion from the Nixon Administration. HMO would, in exchange for a fee, allow members access to employed physicians and facilities. In return, the HMO received market access and could earn federal development funds. An HMO is a integrated delivery system that combines both the delivery and financial aspects of health care for consumers. Under the HMO, each patient is appointed to a primary care physician (PCP), who is essentially accountable for the long-term care of the members that she/he has been assigned and any specialists that a patient needs to see should be referred by their PCP. Some examples of HMOs are Kaiser Permanente and Humana. HMOs are licensed at the state level, under a license that is known as a certificate of authority. A pro of an HMO is that treatment for a patient can begin prior to their insurance being authorized; A member may benefit from this because there would be little to no treatment delays. A con of an HMO is that in order to save cost, most HMOs provide narrow provider networks; A member may not benefit if in an emergency because their “in-network” emergency room might be far or there are “quick-care” in their

    Read More

  • Optimizing Worker's Compensation Claims Processing

    535 Words  | 2 Pages

    HMOs were designed–by Democrats and Republicans to dispose of individual medical coverage. Under an HMO course of action, individuals pay a set sum each month, and the HMO consents to give all their care or to pay for the secured mind that they can't give. The HMO enlists doctors and sets up clinics. The individual picks a particular supplier for his or her care called a primary care physician (PCP). Individuals agree to accept HMO coverage through their employer or through an individual arrangement.

    Read More

  • The Norwegian Health Care System

    872 Words  | 2 Pages

    Gerard F. Anderson, Uwe E. Reiinhardt, Peter S. Hussey, Varduhi Petrosyan. It’s the Prices, Stupid: Why the United States Is So Different From Other Countries. Health Affairs. (2003, May) www.medscape.com/viewarticle/452954

    Read More

  • Price Control In Health Care

    754 Words  | 2 Pages

    Regulation plays a huge role in the healthcare industry. The healthcare industry restrain of health care costs by imposing price controls ignore the long history of failure through that process. Regulated prices prevent markets from efficiently allotting resources, leaning to unescapable deficiencies and failing quality, while boiling improvement and averting care to inequitable black markets. Internationally, tight price controls in Japan manifest many of these failures, while the Netherlands has relished advances in cost and quality by abandoning them for market-based pricing. Government –fixed prices for hospitals in Maryland and under Medicare have worked only to expand costs and the power of providers. Now, with Obamacare increasing the taxpayers’ duty for funding health care, all knowledge proposes that efforts to regulate provider prices will likely prove expensive and counterproductive.

    Read More

  • Obesity and Metabolic Syndrome

    1015 Words  | 3 Pages

    The Center of Disease Control and Prevention (2013) reported that, more than 35% of U.S. adults are obese and suffer metabolic syndrome which can include heart disease, stroke, type 2 diabetes and a variety of cancers, causing the US more than hundreds of billion dollars for their medical care. It makes some wonder whether the health care Americans have chosen to support our country was the right choice. A managed health care system might not be the most efficient at times but compared to a Universal plan, Managed care looks golden. America’s managed health care dates back to the 19th century when rural American workers agreed to a set fee for physicians to deliver care to them and their families. After World War II however, hospitals and clinics started popping up all over our country enrolling more than half a million people. By the 1970’s healthcare became common place and the choice of HMO, PPO etc... were formed. Employers began to see managed care as a necessity for their employees and now healthcare comes as a job benefit (Tufts Managed Care Institute, 1998). Having a health care plan through work The alternative choice to a managed healthcare is a Universal healthcare which is a government-funded program. This health care system dates back just as far as managed health care however, this has never been much of a success in the American System (Karen S. Palmer,1999).

    Read More

  • Beveridge Model Of Health Care

    406 Words  | 1 Pages

    The most important component of health care reform system in the United States of America is economic transformation. In the first instance,

    Read More

  • Benefits Of Competition In Healthcare

    972 Words  | 2 Pages

    Market economics, especially in healthcare has advantages and disadvantages. For example, market economies are based on the concept that people are free to make their own choices about what services or products to purchase within the healthcare industry. This system can be efficient because a capitalist market system aims to produce goods with a minimum of wasted resources (Metcalf, 2012). Then on the downside a market economy will produce what people want, not necessarily what they need, which can raise prices for the average consumer/patient. For instance, the more consolidated a healthcare system is the greater the drawbacks. In other words, higher healthcare prices resulting from greater market power. “Market power increases because it is difficult for insurers to bargain successfully with one of only a few health systems and clinicians gain market power through consolidation by raising prices to the payers” (Cutler & Morton, 2013). Therefore, there are many decisions healthcare facilities need to consider before opening up to the public such as looking for a less concentrated area, identifying new sources of patients for referrals, offering something unique to differentiate from other providers, and creating a healthcare market that has not been built

    Read More

  • The Health Care System Is Inevitable

    872 Words  | 2 Pages

    This allows physicians the opportunity to provide the best treatment options that are available without worrying about cost. If hospitals are offered incentives to limit or reduce care based the belief that administrators, patient-provider relationships will be affected. Consumers believe that the health care team has their best interest at heart. They also believe that the health care team will do everything possible to ensure they receive the best treatment possible. Inference from hospital administration in the care of patient could delay life saving treatments, and tie the hands of physicians when quick action is needed. If a pricing standards are established across the board for every hospital and every physician, health care may not be affected. Physicians might become more concerned with meeting the mark instead of providing the best care, depending on the consequences. I believe that in this case malpractice insurance will increase, hence physician cost will increase. Kaufman stated, “medical directors should have the authority to set the standard for their service line”, but what standard at one hospital may not be the same at another (Kaufman, 2011). Another problem with this proposal, who sets the standard? For example, treat for patients in emergency rooms vary from hospital to hospital. Patients are different, illness present in different ways, therefore treatment should remain in the hands of the treating physician without the cloud of management looming over. With that being said, unless a realistic cap or standard is placed on the treatment of patients, I think that a reduction in physician autonomy would cause a decline in patient care. In contrast, the ACA includes provision that recognizes the need for physician autonomy. Many provisions in the ACA offer consumer’s health care plans that allow for

    Read More

  • Health Care Industry Analysis

    1711 Words  | 4 Pages

    Welcome to our city YRN. We have 600,000 residents in our city. Our city is cold during the winter and hot during the summer. We love the cold weather because it helps get rid of fungus on plants and crops. We love the hot weather because the sun helps our crops with photosynthesis. Our city consist of many mountains, oceans, and plains. We get our water from snow, rain, hail, rivers, oceans and lakes. 25 percent of our city is crops, 25 percent of our city is forests, and 50 percent of our city consists of industries. We need forests because we not want our city to trap heat.

    Read More

  • Essay On Us Healthcare 2050

    1009 Words  | 3 Pages

    The cost of US health care has been steadily increasing for many years causing many Americans to face difficult choices between health care and other priorities in their lives. Health economists are bringing to light the tradeoffs which must be considered in every healthcare decision (Getzen, 2013, p. 427). Therefore, efforts must be made to incite change which constrains the cost of health care without creating adverse health consequences. As the medical field becomes more business oriented, there will be more of a shift in focus toward the costs and benefits, which will make medicine more like the rest of the economy (Getzen, 2013, p. 439).

    Read More

More about Health Care Market Analysis

Open Document