Introduction
Containing costs and improving healthcare capture the very essence of healthcare operational principles. The paper shall look at five arguments that support the latter statement with particular emphasis on recent researches and surveys.
Whether managed care is containing costs and improving access to quality healthcare
It maximizes profitability
It is important to realize that every strategy adopted by a healthcare institution can reflect on its goals and one of the primary ones for most health institutions is to maintain profitability. Managers and entrepreneurs alike agree that the easiest way to do this is by cutting costs or containing them. This measure has been quite common among organizations after the global credit crunch took a toll on organizational functions. Subsequently, the same issue has befallen health enterprises. (Nach, 2008).
Aside from the state of the economy (that affects consumer abilities to meet their healthcare costs and healthcare institutions’ ability to provide healthcare), there are still other biting factors that would necessitate such a strategy. These factors are reducing revenue streams and lowering reimbursement levels. In the past, several healthcare providers have been offering a wide range of healthcare services to diversify their product portfolio and hence their revenue possibilities. But this is becoming very difficult these days as there is a move towards specialization. On top of the latter, those companies that highly depended on reimbursement have found that this is not as forthcoming as it once was.
In other words, all these challenges are reducing the number of operating margins available to healthcare stakeholders thus heightening their costs. It would therefore make sense for any company to consider minimizing both its operational and fixed costs to maintain profitability or even to stay afloat; this is the reason why such a strategy should be considered very seriously in healthcare management.
Improving access to quality healthcare is an indication of an organization’s success
Research shows that certain populations are particularly vulnerable to healthcare complications than others. Consequently managed care ought to be judged by an institution’s ability to improve access to healthcare by such populations. It is logical to assume that effective healthcare is judged by its ability to reach those who need it the most. If a hospital or a service provider cannot reach clients, then its very purpose is in question.
This argument can be solidified by examining a specific population known as the aged. Recent figures (2006) indicate that the elderly report the highest rates of hospitalization in the country. (Stahl, 2006) In fact, this group represents only 12% of the country’s population yet they account for thirty-six percent of all hospitalizations occurring nationwide. This population has significant effects on health care costs for all stakeholders. Studies on the correlation between hospitalizations of these populations and their effects on healthcare costs have indicated a direct relationship. The higher the number of aged patients reporting to healthcare institutions the higher the amount of money to be spent by the latter organizations on their treatment even though most of their ailments are chronic. Conditions such as heart complications, obstructive chronic lung disease, cancer, arthritis, hypertension, and diabetes are quite common among them. This population, therefore, takes up immense resources from healthcare institutions without yielding positive results. Most of the time, the elderly usually report to the hospital after conditions have worsened and very little can be done to alter their conditions. This means that such hospitals tend to be ineffective in providing patients with better health outcomes. The best way to deal with such a dilemma is by reaching the grassroots of the problem; improving access to quality healthcare among the aging population early enough. Timely interventions can go a long way in boosting the health of this population thus minimizing the number of resources utilized. In the end, better health outcomes will be achieved and the overall population will record fewer cases of health complications. This means that managed care will have been achieved because the major goal of maximizing health to specific populations will have been realized. Likewise, the same thing can be said of other vulnerable groups such as low-income households.
Low-quality care causes worse health and increases costs
Containing costs and improving access to quality healthcare are very workable solutions owing to recent revelations made by analysts in this sector. These researches have shown that when patients overstay in hospitals or other health institutions without the proper quality of care, then those individuals are likely to develop further complications. For instance, about ninety thousand patients die out of illnesses that they contracted in hospitals. Another alarming statistic is the fact that other deaths occur when wrong medical diagnoses have been carried out. This eventually leads to the administration of the wrong medicines or the provision of excessive dosages to concerned parties. Sometimes it is even possible to find that a patient has undergone an unnecessary surgery or a necessary surgery carried out in the wrong way. These issues all result in more deaths and poor health outcomes for healthcare institutions. (Buchbinder, 2007)
Some of the top medical practice studies indicate that close to thirty billion dollars are spent annually on wrong diagnoses. As if this is not enough, it has also been shown that health care schemes offered by employers have spent an excess of forty-five percent to account for the latter situations. Also, over four thousand lives could be saved annually if all hospitals within the country offered the same quality of healthcare that the top one hundred hospitals offered when dealing with cardio-vascular issues. This can translate to about one billion in savings. Perhaps even more interesting is the fact that the latter study only dealt with cardiovascular-related deaths. When hospitals extend the same quality of care about all types of diseases, then chances are more lives will be saved and there will be more satisfaction with the level of services offered.
There is a clear link between improved access to quality healthcare and mortality rates in health institutions
To further ascertain the latter stance, in 2003, it was shown that when pneumonia patients are diagnosed early enough, then their length of stay in hospital is minimized and this improves their health while at the same reducing costs encountered by the hospitals handling them.
In the Internal Medicine Archives, it has been found that there are no negative repercussions that emanate out of shortening patients’ stay in hospitals. The latter study dealt with myocardial infection cases alone. This research found that when the patients’ mortality risks were minimized when they accessed improved healthcare upon hospitalization and when this care was administered over a short period. Also, pneumonia patients who were given cultures promptly, who were subjected to the right type and amount of antibiotics found that most of the mortality rates went down and so did the costs linked with dealing with these cases.
It can therefore be ascertained that detection and treatment of chronic complications can go a long way in boosting the level of health for specific patients while at the same time boosting a patient’s ability to live longer. This implies that a healthcare institution’s name will improve and their costs will also have been managed. In the end, both groups can benefit from improved access to health care. This revelation is quite important owing to certain medical myths; that the more an organization spends, the higher its level of quality and hence the better its health outcomes. However, as statistics have indicated, this is not always the case, efficient health organizations are those who increase the availability of sound medical care to those who need it that reducing the resources and time that must be spent on a patient that was admitted into a certain institution. (Mara et al, 2007)
Competition from specialized providers based on price dictates that health institutions must also follow suit
The medical landscape has changed dramatically over the last few years. This has come in the wake of the entry of specialized care providers. Numerous employees and patients are no longer content with the ‘wholesome’ arrangement where one size is assumed to fit all the healthcare needs of an individual patient. These days, consumers want to get value for every single amount that they invest in healthcare. It has been shown that numerous companies are purchasing healthcare services from several vendors. For instance, one may find that an employer does business with a certain provider when his or her employees need maternity services. When radiological services are required, that employer may go to another provider. Besides that, it is also likely to find that casualty cases will be addressed by a third provider.
In this era of specialty, most organizations have found a way of minimizing their costs and thus competing based on price. What this means for large healthcare institutions that offer numerous services is that they need to look for a way of gaining a competitive advantage. One way of doing this is by competing on a price basis too. The best way such a strategy could work is by containing costs and increasing access to quality healthcare. These two combinations can go a long way in putting hospitals on the same level playing field as these specialized providers. Managed care must therefore constitute these two aspects to remain relevant today. (Schellekens & Reinertsen, 2005)
Conclusion
There are five major reasons why healthcare experts need to consider improving access to quality healthcare and cutting costs. All these reasons have been stated above and they largely revolve around two major issues; the first is that they improve an institution’s ability to meet its financial objectives and the second is that they boost their ability to meet health-related objectives. These two parameters are the best measures of success and they should therefore validate the need to contain costs and improve access to quality healthcare in managed care.
Annotated bibliography
Buchbinder, S. (2007). Introduction to healthcare management. Toronto: John and Bartlett Publishers.
This book has dealt with all the basics of healthcare care management. For instance, the author has talked about medical ethics, human resource optimization, information technology usage, strategic planning, and marketing. About the topic under concern, the author has offered suitable guidelines on the cost containing and improving access. For instance, she has used case studies to support the notion that low access to quality healthcare can lead to worse health.
Mara, C., OlsonJack, l. & Berman, E. (2007). Handbook of Long Term Care Administration. New York: CRC press.
In this book, the authors refer to the changing attitudes towards long-term health care. They assert that hospitals have the responsibility to improve the quality of services offered to such groups as this boosts their risk tendencies. This book is essential in supporting the argument that there is a link between mortality rate and improved access to quality healthcare among most term patients.
Nach, D., Oetgen, W. & Pracilio, V. (2008). Governance for healthcare providers. New York: Productivity Press.
These writers claim that most medical professionals lack knowledge on how to run healthcare institutions in a business-oriented manner. They claim that most of them are governed by diligence rather than by knowledge. Consequently, they put out the argument that successful organizations should be able to sustain themselves by being profitable.
Schellekens, W. & Reinertsen, J. (2005). 10 Powerful Ideas for improving patient care. Alta: Health Administration Press.
In this book, the authors offer advice on how healthcare institutions can stay ahead of the pack. They cite instances such as competition, extended hospital stays, lack of patient-centered systems, and competition as being the major hindrances to success in these organizations. Practical solutions have also been given to dealing with these hindrances. About the discussion topic, this book supports the argument that hospitals must counter competition based on price from specialized care providers.
Stahl, M. (2006). Encyclopedia of HealthCare Management. Knoxville: Sage Publications.
The latter book looks into the business aspects of healthcare management. Several relevant issues to this topic have been addressed such as accessibility of healthcare and cost-cutting strategies within companies. The encyclopedia provides both sides of the debate on this pertinent issue. It supports the argument that certain populations are more susceptible to illness than others.