Executive Summary
Memo Block
To: Gavin Christopher Newsom, Governor of the State of California
From: Dr. Eli Klouvi, MPH student at GWU
Subject: Assessing increasing and identifying solutions to drive down health care costs
Date: August 27, 2019
Problem Statement
The US healthcare system is the most expensive in this world; it is twice as much, for instance as the developed nation median. Healthcare system in the US is the most expensive in the world and amounts to twice as much in the developed nation median. The National Health Expenditure Accounts (NHEA) has clearly demonstrated that it is a fact our healthcare costs a lot more is because our costs are higher. In 2017, .US expenditure on health care increased by 3.9 percent to $3.5 trillion or $10,739 per individual. Health spending accounted for 17.9 percent as a percentage of the nation’s Gross Domestic Product. Approaches to healthcare cost containment that have been used in other states can be identified in California. Only viable alternatives should be adopted by other states.
Background
Medicaid spending is affected partially by the cost of procuring health care in the state market. Differences in the cost of obtaining health care in a particular state affect the amount state Medicaid programs have to spend in order to purchase services. Health care costs typically outpace inflation. In 2009, national health expenditures (NHE) per capita were $6,815. Half of all US. residents and 56% of non-elderly residents are covered by employer-sponsored insurance (ESI) plans. In 2015, the average premium cost for a family (including the employee and employer shares) for employer-based coverage was $17,322. The employers paid approximately seventy-three per cent of the premiums.
The Affordable Care Act (ACA) in the United States has changed the way community health centers function and the policies in place that have directly influenced community health. Even an integrative approach in integrating Deferred Action for Childhood Arrivals recipients to healthcare benefits, California still has high healthcare cost.
Options
Expansion or patient-centered approach.
Recommendation
Patient-centered approach.
Policy Memo
Memo Block
To: Gavin Christopher Newsom, Governor of the State of California
From: Dr. Eli Klouvi, MPH student at GWU
Subject: Assessing increasing and identifying solutions to drive down health care costs
Date: August 27, 2019
Problem Statement
Healthcare system in the US is the most expensive in the world and amounts to twice as much in the developed nation median. The costs of operation have been termed by the National Health Expenditure Accounts (NHEA) as the cause for such an expensive system. In 2017, US expenditure on health care increased by 3.9 percent to $3.5 trillion or $10,739 per individual. Health spending accounted for 17.9 percent as a percentage of the nation’s Gross Domestic Product. Aapproaches to healthcare cost containment that have been used in other states can be identified to be used in California. Only viable alternatives should be borrowed.
Background
The Affordable Care Act (ACA) changed the way community health centers operate and the policies that were in place, greatly influencing community health. According to Rosenbaum, et al., (2010), ACA directly affected community health centers by increasing funding, expanding insurance coverage for Medicaid, reforming the Medicaid payment system, appropriating $1.5 billion to increase the workforce and promoting training. The impact, importance, and success of the Affordable Care Act is still being studied and will have a large impact on how ensuring health can affect community standards on health and also individual health.
The Senate health care bill proposes shifting Medicaid financing to block grants for the states depending on enrollment, and aims to phase out the federal funding implemented under Obamacare for Medicaid expansion (Abramson, A., 2017).
Deferred Action for Childhood Arrivals (DACA) recipients are ineligible for most forms of government healthcare assistance. The programs unavailable for DACA recipients include the Children’s Health Insurance Program, Medicaid, and tax credits under the Affordable Care Act. Some states, such as California, Illinois, Massachusetts, New York, Oregon, Washington state and Washington, D.C., have opted to fund health insurance to all children regardless of immigration status. The requirements to obtain a professional license vary from state to state. Ten states – California, Florida, Illinois, Minnesota, Nebraska, Nevada, South Dakota, Utah, West Virginia and Wyoming – have enacted legislation to provide legal and/or unauthorized immigrants with professional licenses. California passed legislation allowing qualified applicants to admitted to the state bar regardless of their immigration status. California also enacted a measure allowing about 40 state boards to accept a federal taxpayer identification number as proof of identification in lieu of a Social Security number when considering applications.
The changes in California have, however, not done enough to cut the cost of providing healthcare services.Residents need to either get healthcare cover or not and, choose to enroll in the California health care exchange, or other states. The insurance cover provided in California is not mandatory, and residents whose employers cover their health care costs are exempted. Most employers offer affordable medical insurance that meet government standards. If an employee is covered by employer-offered health plans, they usually cannot get a tax credit through Covered California. However, a few exceptions exist. For example, if the employee’s share of the premium for the cheapest plan offered by their employer costs more than 9.66 percent of their total income, the employee may qualify for government assistance.
Options
Several options are available that can help in cutting the costs of providing health care. For example, the value of expanding the funding provided for health care services should be considered. Also, the approaches taken should be patient-centered so that the funds provided are used for the right purpose. The state of California should borrow the strategies employed in other states that have worked towards cutting the cost of providing health care.
Option one: Expansion
First, focus on the value of expansion. In the United States, $ 8,500 is given per individual annually on healthcare. Taxpayers pay 48 percent of the care costs, which amounts to almost half of the cost of providing care. Therefore, of the $ 8,500 per person paid on healthcare, taxpayers give close to $ 4,100 per personaccording to McClanahan, (2014). Different ways of controlling prices must, therefore, be sought. The state of Massachusetts has better ways. The house of Romneycare, long known for being the forefront on changes in healthcare delivery, is stepping into the fight on healthcare expenditures(McClanahan, C., May. 2012). Annual expenditure on patient care for all diseases increased $ 258 billion to $ 697 billion, despite attempts to decrease employment that amounted to the $ 201 billion expenditure reduction. People got less hospital stays, but all the care they could have had only got packed into fewer times, and spending remained high (Kincaid, E., Nov. 2017). The emphasis on effort has been to decrease insurance cost but not the factors taking up the price of insurance. Politicians need to be reminded that the cost of providing insurance cover can only go down if the cost of providing healthcare goes down ((McClanahan, July. 2017). According to Abramson (2017), the best way to run down total prices while increasing quantity is to encourage competitively driven innovation. Also, the cost of procuring health care in the state market affects Medicaid spending. Besides, different states have different prices of providing health care, and thus, Medicaid programs have to spend so as to purchase services. Abramson (2017) stated that the coverage of health center patients differs in Medicaid expansion and non-expansion states. State Medicaid expansion decisions affect the coverage of health center patients. In states that expanded Medicaid, over eight in ten patients have health coverage, and over half are covered by Medicaid. In contrast, less than two-thirds of health center patients in non-expansion states have health coverage, and only one-third has Medicaid coverage. A slightly higher share of patients in non-expansion states has private coverage . However, because marketplace subsidies are not available to individuals with income below 100% FPL, which leaves millions of poor adults in the Medicaid coverage gap, health center patients in non-expansion states are more likely to be uninsured than those in expansion states.
Option two. Patient-centered approach.
Second, over time, the people have been forced to spend more on healthcare because the experience price of different goods and services has declined. Workers have been assigning more of their working time to buy health care. The value of healthcare and the quality of affordable services is becoming a burden to the people. The cost of healthcare can, however, be reduced by imposing government-administered cost controls (Goodman, 2014). Besides, the primary issue of concern is whether individuals are getting the value of their money for purchasing health care services. The most honest answer to the problem of the value of money is that the citizens are not getting value for their money (Conover, 2012).
Also, the rising cost of healthcare has put stress on the disposable income of consumers and government budgets. The government should, therefore, provide a comprehensive approach to reducing cost while improving quality of care. Additional services are sought from medical professionals to analyze, present, and prevent psychological and physical illness and trauma.
Medicare enrollees have the option to choose the organization that best suits their health care coverage requirements. Therefore, free exchange solutions are available to improve the health care system. Health care providers and pharmaceutical corporations can quickly be required to take down prices (Schoen, D., Jul. 2017).
The need to address the rising health care costs and access is a non-contentious issue. The growing health care costs are restricting access to high-quality care. Besides, ideas can be borrowed from Massachusetts’ healthcare survey of 2006.Recommendation
US citizens may be forced to seek cheaper health care services from other nations if the issue of high health care costs is not addressed. The world is growing homogenized, and countries are racing against time to cut down the costs of providing health care. The demand for health care services in the US keeps on growing, and thus cutting costs may not be an easy task. However, Economists suggest that the growth in buffered demand may act to reduce the prices of healthcare services. Care providers will be compelled by global competition to cut down costs to remain in business. The attempts for healthcare reforms in the US are aimed at providing greater coverage. Unfortunately, the US has not fully universalized the healthcare system. The consideration is challenged morally in choosing whether to provide general healthcare coverage or to provide quality-based healthcare coverage for all citizens. Government administered cost controls are essential in decreasing the cost of attention (Goodman, 2014). Generally, consideration should be directed towards ensuring the affordability of healthcare services.
The second option is cost-friendly and depends on the flexibility of the services provided by the professionals. Massachusetts has taken two years to ramp up healthcare reforms, and California can follow suit. For example, the number of people without health coverage has been reduced considerably, while governmental assistance has remained broad. Besides, the expenditures in healthcare systems are causing a threat to the sustainability of the system (Steinbrook, 2008). The recommendation given by experts has always been to listen to the patients (Sifferlin, A., Mar. 2018). Generally, the Californian population is on the verge of benefitting from patient-centered policies.
Investing in patient-centered approaches will ensure that service provision is made more comprehensively and quality-based value will be offered. Option one may prove to be demanding and costly, and thus option two will come to rescue. The California population may be reluctant to follow the guidelines provided for the expansion program. However, option two will be economical and effective since the interests of the patients will come first. Generally, the Californian population will find value for the money and resources used to acquire healthcare services.
In sum, the government is responsible for the welfare of the Californian people. Healthcare should be provided on the basis of competency and quality. The attempts to cut on the costs of delivering healthcare should not interfere negatively with the quality of services offered. The provision of healthcare services should be specified with the services being up to date.
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References
Abramson, A. 2017. State Medicaid leaders call senate health care bill ‘unworkable’ Time. Retrieved from http://time.com/4833096/health-care-bill-medicaid-leaders/
Centers for Medicare & Medicaid Service. 2017. National health expenditures 2017 highlights. Retrieved from https://www.cms.gov/About-CMS/Agency-Information/OMH/resource-center/hcps-and-researchers/data-tools/sgm-clearinghouse/hcps.html
Centers for Medicare & Medicaid Service. 2019. Immigration status and the marketplace. Retrieved from https://www.healthcare.gov/immigrants/immigration-status/
Conover, C. 2012. The cost of health care: 1958 vs. 2012. Forbes. Retrieved from https://www.forbes.com/sites/chrisconover/2012/12/22/the-cost-of-health-care-1958-vs-2012/
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Schoen, D. 2017. Bipartisan reforms, like part D, improve health care for all Americans. Forbes. Retrieved from https://www.forbes.com/sites/dougschoen/2017/07/18/bipartisan-reforms-like-part-d-improve-health-care-for-all-americans/
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