Third-party payments are arguably the most important factor that determines the cost of medical treatment in the United States. They are responsible for increasing the price of treatment and thus rendering health care services inaccessible to many Americans. Calls for the reduction of treatment expenses primarily major on government policies and programs that aim to lower the money paid directly by patients. Private insurance companies and government insurance are the main types of third-party payment systems in the US.
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These systems pay a portion of the treatment cost medical service providers on behalf of the patient. These costs have evolved over the years as service providers seek to make medical services accessible to more Americans.
The US has the most expensive health care system because the prices of medical services are not regulated. Health care organizations decide how much to charge for the various services that they offer. One of the effects of third-party payments is a lack of transparency (Chapin, 2015).
Under this system, patients seek medical services and the cost of treatment is covered by an insurance company. In that regard, many patients are not aware the price of treatment and the amount of money paid to the service provider by the insurance company (Mason, Gardner, Outlaw, & O’Grady, 2016). Many patients suffer financially because they do not explore other options that could have led them to cheaper medical services. The dynamics of supply and demands are non-existent under the third-party payment system.
The launch of Obamacare was widely perceived as a lasting solution to the issue of high treatment costs. However, the scheme caused both political and economic debates as it makes medical services more expensive (Chapin, 2015). Experts argue that third-party payments are an obstacle to making medical services affordable. A study conducted by the Center for Improving Health Care in Colorado (CIVHC) has revealed that organizations charge different prices for similar treatments (Nickitas, Middaugh, & Aries, 2016).
The cost depends on where the service is offered. A lack of transparency in the health care markets affects Americans because they find it difficult to evaluate treatments and chose the most cost effective option (Chapin, 2015). Information regarding the costs of treatment is unavailable. Moreover, it is impossible for suppliers of medical services to compete effectively due to lack of regulation. In that regard, they cannot compete with regard to providing affordable and effective services. Patients are excluded from the pricing system and so, they pay more for simple treatments.
Third-party payments distort the health care market by creating inequality regarding the cost of treatment, make the delivery of medical services expensive, and eradicate competition with regard to pricing and the effectiveness of patient care (Mason et al., 2016). However, many wealthy countries insist on using third-party intermediaries to purchase health care. This system increases access to medical services by covering the premium costs of treatment that are not incorporated in tax credits (Nickitas et al., 2016). Health care costs are high. However, all Americans have access to quality health care services.
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Elder citizens experience more difficulties paying for medical services than the younger citizens. Therefore, the government created a separate payment program for seniors. A study conducted by the Employee Benefit Research Institute (ERBI) revealed that an elderly couple required at least $280,000 in savings to cover the cost of medical services excluding long-term care or the cost of assisted living (Nickitas et al., 2016).
Special programs such as Medicaid, Medicaid, and Veterans Association are created for seniors to increase access to medical care and avoid the possibility of entering into medical debt (Nickitas et al., 2016). Seniors who experience long-term health care problems need financial assistance from the government because of the high costs of assisted living. Therefore, it is important for the government to create a program that helps low-income seniors pay for medical care expenses.
Chapin, C. F. (2015). Ensuring America’s health: The public creation of the corporate health care system. New York, NY: Cambridge University press.
Mason, D. J., Gardner, D. B., Outlaw, F. H., & O’Grady, E. T. (Eds.) (2016). Policy & politics in nursing and health care (7th ed.). New York, NY: Elsevier.
Nickitas, D. M., Middaugh, D. J., & Aries, N. (2016). Policy and politics for nurses and other health professionals (2nd ed.). Burlington, MA: Jones & Bartlett Learning.