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Controlling health care cost essay

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Controlling health care cost essay example

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Controlling health care cost essay

  1. 1. Running head: CONTROLLING HEALTH CARE COST 1 Controlling Health Care Cost Author Institution
  2. 2. CONTROLLING HEALTH CARE COST 2 Controlling Health Care Cost Letter To the Congress Free market system is a system in which individuals are responsible for their own insurance coverage. Most people support single payer health insurance whereby the state finances health care although it is not engaged in delivering the care. One of the outstanding downsides of a free market system is that it leaves millions of people without healthcare coverage. As a result, a free market system is perceived to be cost prohibitive besides leaving most Americans without financial means of paying for medical expenses (Shi & Singh, 2010). Free market system is often accused of encouraging increased spending on aspects such as administrative costs. This leads to high insurance premiums and enhanced costs for out-of-pocket expenses for medication. One of the underlying principles of a socialized healthcare system revolves around the notion that every citizen has an unalienable right to receive at least the lowest standard of medical attention. The pros of a socialized care system include extending care and reducing medical costs. Some of the downsides of the system include raised taxes, eliminating competition, and longer wait times. The downsides of a free market system include high administrative costs, an ineffective liability system, and a shift in cost from uninsured to the insured. Socialist approach appeals to large sections of people and bears a number of benefits such as the ease of access for all people irrespective of their social or economic status (Friedman, 2011). Proponents of socialized medical system cite the high number of uninsured citizens in countries in which free market healthcare is the norm. A comparative analysis of healthcare in the US with healthcare systems in other countries manifests that the present healthcare systems is wasteful. For instance, when
  3. 3. CONTROLLING HEALTH CARE COST 3 Canada instituted its present healthcare financing system in 1968, the percentage of healthcare share of the national GDP was fairly comparable to that of the US (Canada had 6.9% as compared to 7.1% in the US). Since then, healthcare provision within the US has become dramatically more expensive as compared to other advanced economies (Niles, 2011). For instance, in 1971, per capital healthcare spending in the US rose by more than $6,900 compared to an increase of less than $3,600 within Canada and just $3,200 in other countries (from 7% of GDP in 1970 to the present 16% of GDP). The disparity between the US experience and that of Canada is cited to emanate from Canada’s single-payer system lower administrative costs. In fact, healthcare costs have been twice as high compared to those in countries such as Canada, France, UK, Sweden, and Germany. The administrative costs in the US are approximately twice as high compared to those of Canada (31% in the US vs 17% in Canada). The US gain in life expectancy since 1971 ranks low compared to that of other advanced economies (5.4 years for women compared to 7.3 years). The relatively low increase in life expectancy is blamed on gross inefficiency of the US private healthcare system. Had the US increased life expectancy at the same dollar cost commensurate with other countries such as Canada, the US would have saved approximately $4,500 per person (Armstrong, Armstrong, & Fegan, 1999). Analysts point out that the rising costs in healthcare provision are attributable to transaction costs accompanying the administration and coordination of a system fashioned at reducing the access. Coordination and cooperation between diverse healthcare providers are critical for the enhancement of effectiveness and efficiency within the healthcare system. Yours Sincerely, James.
  4. 4. CONTROLLING HEALTH CARE COST 4 References Armstrong, P., Armstrong, H., & Fegan, C. (1999). Universal health care: What the United States can learn from the Canadian experience. New York, NY: New Press. Friedman, G. (2011). Universal health care: Can we afford anything less? Retrieved from: https://www.commondreams.org/view/2011/07/01-3 Niles, N. (2011). Basics of the U.S. health care system. Sudbury, MA: Jones and Bartlett. Shi, L. & Singh, D. (2010). Essentials of the U.S. health care system. Sudbury, MA: Jones and Bartlett.

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