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Financing in American Healthcare System

Abstract

One problem with the US healthcare system is poor financing. The solution to this problem is full participation of all individuals over fifty in a national long term health care insurance program. As a proposal, it will be seen how US citizens can benefit from such a scheme.

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Problem

The American healthcare system is one of the most poorly financed in the developed world and the government is spending too much on healthcare compared to any other public service system. In recent rankings conducted by the World Health Organization, it was discovered that the United States was the most expensive member of the OECD. (Roehr, 2008) Despite all this tremendous spending, there are still minimal returns to show for this expenditure because health outcomes were still low. Excessive spending on health care has placed intense pressure on numerous supporting programs such as Medic aid and to a smaller extent Medicare.

Aside from directing a lot of state resources towards medical care, poor financing is also leading to low quality health care. This was revealed by WHO that placed America seventy second in terms of quality of health care. They came to the latter result after examining the level of responsiveness in all the countries under analysis.

The third concern brought on by poor financing in health care is low healthcare accessibility. Health access is rapidly fluctuating especially among vulnerable groups. Statistics indicate that there is an ever expanding gap between the rich and por. As if that is not enough, health care coverage among immigrant populations is also declining rapidly and if nothing new is introduced then fewer citizens will be able to get health care in the country.

Proposal

Audience

A suitable solution to this poor financing is adoption of a long term health care solution plan that will require participation by all persons over the age of fifty years.

This proposal will be most suitable for those persons who are no longer eligible for Medic aid since the latter scheme is quite rigid. Besides that, there may also be a number of citizens who may not be able to afford their own long term care through out of pocket schemes especially since they are aging. Long term health care insurance proposals are tailored to the aging population as this particular group can be very demanding in the health care system. More often than not, they may require health care coverage to cater for chronic illnesses or terminal ones that require permanent or frequent hospital/ nursing care. (Anderson, 2003)

Pros

Through the latter scheme, it will be possible for the aging population to receive support for their long term health care needs. This can go a long way in minimizing the pressure presented to families that have to contend with funding of their own problems. Consequently, individuals who require money for their terminal illnesses need not look outside for funding since this kind of insurance scheme can cover them.

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Besides this, health care facilities may not have to worry about financing for any of the following issues;

  • diagnostics for chronic or terminal illnesses
  • extended stays within health care facilities or nursing homes
  • low quality life among the aged who may not be able to perform their day to day activities.

In other words, both the costs and health care outcomes will have been dealt with though such insurance.

The latter option would offer a lot of options to the affected parties. This is largely because most insurance companies have flexible payment options. Some may pay out anywhere between fifty to seventy percent of the entire premiums. Additionally, in some states, there may be no tax charged on long term insurance benefits meaning that the individuals under consideration can be able to deal with expenses at any one time. Because of all these flexibility and options available to members aged fifty and beyond, then they can find the insurance plan that works for them.

The latter policy is likely to do well because the target audience of age fifty and beyond is likely to embrace the latter idea as most of them tend to have insurance and it can offer them substantial savings. (Yu & Cohen, 2006)

Cons

There are a number of objections that may be raised with regard to this policy option. First, long term health care is quite an expensive endeavor. This is largely because it entails payment of insurance premiums for a very long time. The problem with this is that in case an individual fails to meet his or her respective obligation, then chances are that one might loose all the premiums that one had invested.

People may also object to the latter policy because they are afraid (and rightfully so) of all the obstacles that insurance companies place prior to collection. One may be in urgent need of the amount but an insuring firm can look for legal excuses to postpone payment. Usually, long term insurance plans are very complicated and even the most attentive individuals may not have the ability to understand all these details. In the end, they may end up loosing more than they hoped to gain.

Other individuals may oppose this system because such a scheme requires a lot of time. This means that the decision to take it up should be done on the premise that an insurance company will remain in existence probably thirty or forty years from the time the payments commence. Such an assumption can be quite risky especially given the fact that some insurers have questionable book balances. (Dubay & Cook, 2007)

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The analysis

Q1) is the proposal adequate?

Uncertain. There may be some level of apprehension from members of the population largely because a long term perspective is unappealing to them.

Q2) is the proposal desirable?

Uncertain. Long term health care requires a lot of research on the most viable insurance firms otherwise it would be too risky

Precautionary principle with root cause analysis

Justified in applying principle:

Currently, the cost of health care is growing at alarming rates. The mount of money spent on medicaid cannot be ignored and it would therefore be wise to do something about this current issue. This policy option will go a long way towards boosting personal accountability in health care among the aging population which requires a lot of health care expenditure. Besides that, this method will boost planning for people’s lifestyles thus improving the quality of health care within the current setting.

Potential Positive Effects

Health care will be available to those who need it especially to this vulnerable population. Besides that even those who may not be able to access their long term care benefits, their heirs or spouses could benefit from such an arrangement thus making it a viable option. This health care option will be able to accommodate all the terminally ill and chronic individuals covered. This means that it will increase health care accessibility and the overall health care quality within the country. Because of the flexibility within such a system, then chances are that all members over the age of fifty will be allowed to choose the most flexible plan for them. (Krugman, 2006)

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Potential Negative Effects:

Some individuals may invest so much in the scheme only to find that their insurers are no longer around and that they have lost all their health care investments. In other circumstances, the amount of coverage offered may not be sufficient to meet the health care needs of the person under consideration. This is especially the case when one’s complications require a lot of health care attention.

Root Cause: 5 whys

  • Premiums keep going up every single time and it may never be a good time or individuals to purchase health care coverage – why
  • Some people may not meet the citric required for coverage –why?
  • Policies tend to have limitations since insurance companies have so many deductible that they charge

There is a lack of federal or statewide support for long term health care with minimal tax incentives, employer bonuses and educational campaigns being carried out by the government on long term health insurance – Root Cause

Conclusion

The latter proposal is likely to reduce health care costs tremendously. It would also increase accessibility. Aside from that, it is likely that the quality of health care would go up since one will have planned for it.

The root cause can be addressed by conducting educational campaigns about long term health care insurance and how to choose the right insurer. Additionally, federal governments need to pass laws that exempt taxation/ minimize tax on such benefits. This should also be coupled with a relaxation on requirements for the terminally ill. Lastly, incentives need to be given to employers so as to encourage them to consider the option of long term health care.

References

  1. Anderson, G., Reinhardt, Hussey, P. & Petrosyan, V. (2003). “Why the US is different from other countries.” Health Affairs, 22 (3), 56
  2. Roehr, B. (2008). ‘US health care ranked lowest among OECD countries.” Biomedical Journal. 337 (21), 889
  3. Yu, W. & Cohen, S. (2006). “Heath expenditures over time.” Health care research and Quality Agency Report. Statistical brief. No. 124
  4. Krugman, P. (2006). Health care crisis and what to do about it. New York: Routledge
  5. Dubay, H. & Cook, A. (2007). Affordability of health insurance and the uninsured. Journal of Health Affairs, 27 (5), 359

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