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Price Setting and Price Regulation in Health Care

Identify a problem or concern in your state, community, or organization that has the capacity to be advocated through legislation. Research the issue and complete the sections below. For each topic that requires the listing of criteria, a minimum of two criteria should be identified and discussed. Add more rows as is appropriate for the topic/proposal.

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Problem
In no more than 250 words, describe the problem, who is affected, and the current ramifications. Explain the consequences if the issue continues.
According to a large survey in Virginia, the primary issue in the healthcare system is affordability. More than half (55%) noted experiencing affordability burdens in the past, and 78% are worried about affordable healthcare in the future. Some of the major affordability burdens include lack of insurance due to high premiums (46%), delaying or forgoing care due to cost (46%), and problems with paying medical bills (30%) (Virginia Center for Health Innovation, 2019). The growth rate of healthcare costs and spending in the U.S. has outpaced growth of GDP, median incomes, and population for many years. As a result of rising costs and associated health insurance premiums, it has become a growing economic burden on lower and middle-class families across all demographics and age groups. If the trend continues, middle class families will soon not be able to afford necessary and emergency healthcare costs while maintaining the same lifestyle (Komisar, n.d.). Christopher et al. (2018) found that medical outlays reduce median income of the poorest by 47.6% compared to only 2.7% for the richest, effectively more than 7 million people are being pushed into poverty solely because of healthcare expenses.
Idea for Addressing Solution
In no more than 250 words, outline your idea for addressing the issue and explain why legislation is the best course for advocacy.
The proposed idea takes what is currently being enacted partially and builds on that legislative based. Recently, the Trump administration enacted legislation which establishes price transparency in the healthcare sector and for insurers, making the prices readily available to consumers in order to make informed decisions and “shop around” (Cohen, 2020). The proposed legislation seeks to establish federal regulatory standards across the country, or essentially ceilings above which prices for commonplace procedures or healthcare services cannot rise. Such practices are commonplace for other consumer products and services, particularly in crises.
Legislation is the best course of action because of the regulatory influence it has over the healthcare sector. Despite the U.S. healthcare system being highly privatized in comparison to other countries, legislation plays a key role in regulating and overseeing all aspects of it, including funding and standards, both at the federal and state levels. Making significant regulatory changes such as this will require legislation as it will require both restructuring of the system as well as different distributions of funding.
Research the Issue
Perform research and compile information for your idea. Present substantive evidence-based findings that support your idea for addressing the problem (studies, research, and reports). Include anysimilarlegislation introduced or passed in other states.
Evidence 1 Price controls may include limits on reimbursements such as price setting, fee schedules, price negotiations, as well as controls of production factors such as profits, wages, and capital/pharmaceutical inputs. Price control measures are practiced successfully across OECD nations, particularly in Europe. Budgeting total or sector expenditures is a commonplace policy targeted at containing spending (Stadhouders et al., 2019). Multiple economists and experts agree that price controls are a necessary first step at beginning to regulate and stabilize the healthcare market similar to the manner that many other public commodities or services (i.e. electricity) are managed. Currently, there are three major factors which contribute to such rapid pricing including 1) bilateral negotiations between hospitals and health plans; 2) uncapped out-of-network care pricing (considering networks are tightening and many systems fail to accept national Obamacare plans); 3) Monopolies in hospital care which results in widespread unshoppability. These elements can be actively and comprehensively addressed through competent price control reforms (Frieden, 2019).
Evidence 2 Previous legislation supports price controls. The Balanced Budget Act in 1999 limited total spending on Medicare by $112 billion which resulted in the agency introducing cost-containment measures such as price reductions and payment reform. As a result, volume of patients did not decline. Meanwhile, in the UK, budgeting controls resulted in decreased pharmaceutical expenses of more than 27%. Another example is the US Omnibus Budget Reconciliation Act of 1989, where spending was reduced by 6% of every 10% reduction in price (Stadhouders et al., 2019).
Stakeholder Support
Discuss the stakeholders who would support the proposed idea and explain why they would be in support.
Stakeholder(s) Supporting 1 Politically, from a legislative perspective, Democrats and liberals typically favor populist, social-oriented policies such as this that provide welfare-type of support for the working class and legislation that reduces the burden on lower economic classes while regulating a specific sector.
Stakeholder(s) Supporting 2 Patients – the primary and key stakeholder in healthcare. Patients across all states, including Virginia, are being overwhelmed by high costs and premiums, difficulty in finding network coverage, as well as facing surprise or overbearing billings for even standard healthcare.
Stakeholder Opposition
Discuss the stakeholders who would oppose the proposed idea. Explain why they would be in opposition and how you would prepare to debate or converse about these considerations.
Stakeholder(s) Opposed 1 Politically, the GOP and conservatives typically oppose government legislative intervention, particularly in terms of economic barriers to any particular sector. This political party support private healthcare and self-regulation rather than social-based healthcare reform.
Stakeholder(s) Opposed 2 Generally, hospital-representative organizations and unions, as well as insurers and other organizational stakeholders, oppose price controls vehemently. They argue that any such interventions will cause more harm to the system and consumers, in the end actually cause more price hikes in other areas, or a decrease in innovation and quality of provided care.
Financial Incentives/Costs
In no more than 250 words, summarize the financial impact for the issue and the idea (added costs, cost savings, increased revenue, etc.). Provided support.
Financially, the issue is inherently complex due to the sheer size and complications of the U.S. insurer-based semi-private healthcare system. Initially, if price ceilings are established, hospitals and providers would actually bear the financial burden. Private practices will experience significant financial challenges. In the long-term, it is likely that the government will have to subsidize providers in order to maintain price controls, resulting in the need for taxation (potentially targeted at ultra-rich and healthcare/pharmaceutical corporations at first).
The primary cost savings may reflect on consumers which will both, have greater control over their healthcare finances and choices and potentially see some financial relief long-term. The increased savings may result in greater utilization of other necessary primary care services. Price controls will have to be followed by other rather significant changes to the system, including cost structures so that prices reflect the efficiency of services being produced, unit costs, and level of capacity and utilization. Costing exercises reflecting service delivery systems, including delivery efficiencies and quality, therefore rates reflect current clinical practices in the health system and regulations should aim to reward efficiency and quality (Barber et al., 2019).
Legislature: Information Needed and Process for Proposal
Discuss the how to advocate for your proposal using legislation. Include the following:
Provide the name and complete contact information for the legislator. Donald McEachin
Representative for Virginia’s 4th congressional district
202-225-6365
314 Cannon House Office Building
Washington, DC 20515
Describe the steps for how you would present this to your legislator. A meeting can be set with the legislator. It would be best to gather necessary data and information and create a short but comprehensive presentation that would outline the benefits of creating legislation targeting the issue. Furthermore, it may be beneficial to garner support from both healthcare providers and regular citizens, potentially through gathering of signatures in support of the legislation as well as present relevant polls and surveys which highlight public support for the idea.
Outline the process if your legislator chooses to introduce your idea as a bill to congress. If the legislator accepts the idea, they can draft a bill. Commonly with the use of aides and experts, a bill is drafted to make necessary changes or create new legislation. In the U.S. House of Representatives, any member or delegate can introduce a bill. Those who introduce the bill become sponsors, so it is possible to have the backing of multiple legislators.
Christian Principles and Nursing Advocacy
In no more than 250 words, discuss how principles of a Christian worldview lend support to legislative advocacy in health care without bias. Be specific as to how these principles help advocate for inclusiveness and positive health outcomes for all populations, including those more vulnerable, without regard to gender, sexual orientation, culture, race, religion/belief, etc.
Advocacy is a core concept in Christianity as the Bible specifically calls upon faithful to protect and speak on behalf of others, particularly those who are vulnerable. In a modern democratic society, legislators play a key role in creating policy and agendas which influence millions of people. Legislative advocacy inherently multiplies the ability to care for people. In healthcare and public health, the Christian ethos is prevalent and necessary, embracing elements of mercy, human dignity, the common good, and solidarity. While healthcare trends and solutions may vary, the ethical principles and desired outcomes are virtually universal. It is these principles listed above as well as striving to meet quality and accessibility standards which support the need for policy that is inclusive for all populations, but especially the most vulnerable (Cuellar De la Cruz & Robinson, 2017).

References

Barber, S. L., Lorenzoni, L., & Ong, P. (2019). Price setting and price regulation in health care: Lessons for advancing Universal Health Coverage. Web.

Christoper, A.S., Himmelstein, D. U., Woolhandler, S., McCormick, D. (2018). The effects of household medical expenditures on income inequality in the United States. American Journal of Public Health, 103(8), 351-354. Web.

Cohen, J. (2020). On healthcare, price transparency may be lasting legacy of Trump administration. Forbes. Web.

Cuellar De la Cruz, Y., & Robinson, S. (2017). Answering the call to accessible quality health care for all using a new model of local community not-for-profit charity clinics: A return to Christ-centered care of the past. The Linacre Quarterly, 84(1), 44–56. Web.

Frieden, J. (2019). Price controls best way to cut health costs, economists say. Medpage Today. Web.

Komisar, H. (n.d.). The effects of rising health care costs on middle-class economic security. Web.

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Stadhouders, N., Kruse, F., Tanke, M., Koolman, X., & Jeurissen, P. (2019). Effective healthcare cost-containment policies: A systematic review. Health Policy, 123(1), 71–79. Web.

Virginia Center for Health Innovation. (2019). Most Virginians concerned with health care affordability; show bipartisan support for government action to improve. Web.

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