Write a 700- to 1,050-word paper in which you analyze a financial and economic issue in the health care industry.

Select a current financial or economic issue in the health care industry.
Analyze the financial impact of this issue on the health care industry.
Consider the following:
What are the economic trends of the health care payment system?
What are the supply and demand challenges for health care services?
Why are costs increasing in the health care system?
What regulatory issues are affecting, or will affect, the health care industry?
Provide recommendations for mitigating the problem.
Consider current strategies being used or presented for improving the issue.
Discuss what you believe would be the outcome of these recommendations if implemented.
Cite 3 peer-reviewed, scholarly, or similar references to support your paper.

Format your assignment according to APA guidelines.

ANSWER

An analysis of a financial and economic issue in the health care industry

A current financial issue in the health care industry

One of the critical financial issues facing the health care industry is expectations of offering affordable health care rates despite the rising cost of such services. Some of the rising costs in health care include insurance premiums and the costs of pharmaceuticals/. Pharmaceuticals, for example, have been under substantial public scrutiny due to repeated pricing of highly vital drugs, wherein in 2016 alone, there was an increase in prescription drug spending to $328.6 billion (Actuary.org, 2021). Despite such increases, the health care industry is expected to hit a slow rate and offer affordable services to the patients, posing a significant challenge. There is a great improvement in health care which has allowed for a larger aging population, where despite the improved quality of care, the process is expected to remain affordable.

The economic trends of the health care payment system

There are various economic trends in the health care net system. One of the trends in healthcare is that consumers are currently are driving industry change. Since 2006, according to a report by Price water coopers, medical cost trends are outdoing income growth and economic inflation. Consumers are therefore becoming more sensitive to how much they send on matters of healthcare services. Transparency is another trend in the health care industry, where patients insist on knowing about their financial responsibility before visiting their health care providers. Another economic trend in the sector is the individual insurance market (Fattore, 2019). This means that the patients are more likely to buy healthcare insurance directly from the payer without a third party to manage the relationship. This has led to the insurers conducting business and thinking about member experience and their retention. A final trend is the online payment option which has brought convince and also leads to security concerns. Many Americans opt to use online platforms to pay their bills, where many are increasingly preferring to pay medical bills electronically.

The supply and demand challenges for health care services

A critical human resource supply challenge includes healthcare provider shortages. This includes a shortage in nurse practitioners, physicians, and home care workers, which will likely decrease over the next decade. There is also a likely challenge of aging populations, which will likely place intense stress on the healthcare system, funding sources, and American families. A vast number of aging populations have one or more chronic diseases, which means there will be much pressure in the health provision. Another likely challenge is the closure of community hospitals. According to reports, there have been 97 closures of hospitals in rural communities since January 2020. This is likely to create a primary care physicians shortage, affecting the communities economically and in terms of healthcare outcomes.

The costs of increasing in the health care system

Costs of health care in the United States have been on the rise due to many factors. Some of the factors include expensive new diagnostic tests and treatments, which tend to upsurge the costs. There has also been an increase in administrative costs, mostly related to private insurance, which has resulted in increased health care costs (Schreck, 2020). There has also been a rise in the aging population, who are more likely to suffer from several chronic diseases. This is likely to lead to an upsurge in the total health care costs due to the increased number of people seeking treatment who may have one or more conditions or illnesses.

Regulatory issues affecting, or will affect, the health care industry

One of the regulatory issues affecting the health care industry is HIPAA and Data Breaches. This challenge has become a significant issue in most industries, where it has proven to be quite devastating to the healthcare industry. All states have, as a result, come up with individual regulatory laws for combatting data breaches. Another regulatory issue is the issue of false claims and whistleblowers suits. This covers any fraud that involves any federally funded program or contract. Anti-Kickback and Physician-Hospital Issues is another regulatory issue, where there is the Anti-Kickback Statute regulates the financial relationship between a patient and a physician.

Recommendations for mitigating the problem.

To mitigate the rising costs of health care services, there is first a need to Decreasing the Use of Health Care Services. This can also be preventing any preventable diseases, which would help reduce the number of people seeking health care. Another recommendation is to improve all the populations’ health, hence decreasing the later need for such treatments.

The current strategies being used or presented for improving the issue

Some of the current strategies sued include focusing on innovative strategies that can help reduce the country’s high costs of health care. This may include developing more efficient machines that take less time and energy and yet provide services at lower costs. Other strategies include decreasing overhead as a way of minimizing expenses of the running health care industry. The costs include malpractice insurance and administrative costs.

My belief on the outcome of these recommendations, if implemented

If implemented, these recommendations can play a massive part in ensuring that health care facilities enjoy reduced costs of services they offer. This will also ensure that they do not have the immense pressure of having too many health care seekers, hence making the quality of the service they offer to the patients better.

References

Actuary.org. (2021). Prescription Drug Spending in the U.S. Health Care System. Retrieved from https://www.actuary.org/content/prescription-drug-spending-us-health-care-system

Fattore, A. (2019). An Overview of The Economic Trends of The Healthcare Payment System in 2019. Retrieved from https://mybillingtree.com/an-overview-economic-trends-healthcare-payment-system-2019/

Schreck, R. I. (2020). Causes of High Health Care Costs. Retrieved from https://www.msdmanuals.com/home/fundamentals/financial-issues-in-health-care/causes-of-high-health-care-costs