Premium Essay

Cost Reduction of U.S. Healthcare

In: Social Issues

Submitted By ctenneko
Words 1335
Pages 6
Memorandum
To: Dr. Robert I. Grossman, CEO NYU Langone
Date: November 7, 2012
Re: Restructuring Health Care Payment and Improving Quality
The U.S. devotes a much larger share of its national income to health care than any other country in the world. However, the gross over-spending has not yielded the healthiest population (OECD Health data, 2009). Our economy is continually growing at a lesser rate than healthcare spending. The need to restrain this unsustainable growth in health care costs is often overlooked in favor of reform focused on expanding access to care. Attention must be focused on restructuring the payment process with the goal of reducing costs without sacrificing quality.
With an aging population comes chronic conditions that require efficiently coordinated care. About 10 million Americans require long term care, 42% of which are under 65 with disabilities or chronic illness (Rowland, 2009). It is also not uncommon for chronic patients to receive duplicate testing, conflicting treatment advice, and expensive prescriptions from multiple practitioners. The Medicare system was a fee-for service payment plan, until a prospective payment was introduced. A contributing factor to the problem has been the trending of hospitals and insurers to better cover acute episodes rather than preventative or ongoing care. For example, the average length of stay is down from less than 8 days in the 1970s to 4.6 days in late 2000’s. In a similar trend, gross outpatient revenues as a percentage of all hospital revenues was 37% in the mid-2000’s as compared to 16% in the 1980’s (HPAM-GP 1830, 2012). Currently the health care system’s financial incentives are not structured to reward effective and efficient care. Payment systems pay doctors, hospitals and providers for services (fee for service). Oddly, when care is efficient, the savings go back to the…...

Similar Documents

Premium Essay

Cost Reduction

...A GreenPrint Technologies White Paper How to Reduce Printing Costs by 17%: A Guide to Doing Well and Doing Good by Printing Less By Caitlin McCool Director of Business Development Table of Contents Table of Contents ............................................................................................ 1 Introduction...................................................................................................... 2 The Real Cost of Printing ................................................................................ 3 The Myth of the Paperless Office.................................................................... 5 Stacks of Wasted Pages at the Printer ........................................................... 7 The GreenPrint Solution.................................................................................. 9 GreenPrint Case Study: Savills ..................................................................... 13 Summary ....................................................................................................... 15 Contact Information ....................................................................................... 16 © September 2008 Version 1.1 -1- GreenPrint Technologies www.printgreener.com Introduction In the past few years there has been a significant shift in corporate America and beyond toward a dual awareness of internal efficiency and environmental impact. “Carbon Neutral” was named word of the year...

Words: 4394 - Pages: 18

Premium Essay

The Cost of Healthcare

...The Cost of Heath HCA 305 MRS. John July 1, 2013 One of the most controversial topics now days is health care and that is because it affects the person who seeks it directly. Health care can be an issue when is not handle appropriate and not make wise choices when it comes to it. One way that this topic would go smoothly is when there is communication among those who are in charge and those who use this method. When health care becomes too much the best way to handle it is to find solutions that will benefit not only the patient but the community. Health care is any activity that is intended to improve the state of physical, mental, or social function of people it comprises a wide spectrum of activities including for health promotion, disease prevention, creative care rehabitation, long term and palliative care. It is also to maintain and restore of health by treatment or prevention of disease. Another definition of health care is any field or enterprise concerned with supplying services, equipment information, for the maintenance or restoration of health. This health care can be provide by trained and licensed professionals in which could be in medicine, dentistry, clinical psychology, and public health. Also by a health provider which is the one that provides health care in which is an individual or an institution that provides preventive, curative, promotional, or rehabitative health care services in a systematic way to individual, families or communities. Health......

Words: 1404 - Pages: 6

Premium Essay

Economics in the U.S. Healthcare System

...Economic in the U.S. healthcare system: The $765 billion price tag on wasteful spending Our country aims at continuing to increase the quality of patient care but medical services are being overused at an alarming rate causing great concern. The health spending of this country’s gross domestic product or GDP is 17.6% which is more than any other country (Feldstein). A report from CMS in 2010 states that the total health spending in the U.S. was roughly $2.6 trillion which is twice as much per capita of the average for any other nation yet delivers a lesser amount of care. These figures translate to $8,402 per person. (CMS) The Centers for Medicare and Medicaid Services predicts that this figure will reach $4.6 trillion by 2020 which translates to almost 20% of our GDP. Table 1. Health care spending as % of GDP in 2010 Source: OECD; The Economist, 2009 Out of the trillions of dollars spent in healthcare, the 2009 PricewaterhoseCooper’s report The price of excess: Identifying waste in healthcare spending estimates that $1.2 trillion is wasted. This is equivalent to more than half of what is allocated towards health spending in the U.S. and the figures are broken down in various categories. The report attributed health wastefulness in the following areas: 1. $765 billion towards issues related to healthcare reform debate (6 major areas...

Words: 3125 - Pages: 13

Premium Essay

The U.S. Healthcare System

...The U.S. Healthcare System Non-Profit Versus For-Profit The U. S. healthcare system is generally made up of two classifications. Hospitals may either be classified as non-profit or for-profit institutions. The majority of the hospitals within the United States are considered non-profit. The definition of a non-profit hospital is that its purpose is to serve the healthcare needs of the community. The reason that non-profit hospitals and other organizations were established was with the intention of servicing the needs of all communities. Over time there missions and values changed to have a primary focus on the indigent population. Most are/were well rooted in religion or were created by religious sponsors while others were formed by the humanitarians, nurses, and doctors. One of the distinct differences between non-profit and for-profit hospitals is the rules and regulations, particularly tax status. Non-profit hospitals are not required to pay property, sales, or income tax. It has been suggested that due to the fact the organizations were providing specific social services to the community, they were to be exempt from paying certain taxes. As of April 2012, non-profit hospitals had to begin to abide by four new mandates: * Community Health Needs Assessment * Must have written financial assistance and emergency medical care policy and procedures * Necessary medical care and emergency services must be at the minimum charge/cost. * Be in......

Words: 834 - Pages: 4

Premium Essay

Healthcare Costs

...Assignment #3 Health Care Costs Patricia Kalendowicz HSA 500 02/15/2014 Dr. Russell Healthcare in the United States has evolved over the past several decades. The challenges faced by government and individuals have evolved from public health issues, government regulation, private health insurance and government health insurance. The U.S. has enjoyed the benefits of advancing medical technology, new drug developments and a growing older population but with that has come an increasing cost for healthcare and no clear cut plan to pay for it. In 2003 healthcare spending in the U.S. rose at five times that of inflation, the fastest rate in U.S, history (NCHC-Costs, 2004). The Gross Domestic Product (GDP) is a measure used to gauge the health of the country’s economy. The GDP is the overall worth of goods and services produced in a country within a specific period of time. Total health expenditures are expressed as the percentage of the GDP. The U.S. spends a greater percentage of its GDP on healthcare than any other major industrialized nation. In 2001 this amounted to 14.1%, compared to Germany’s 10.7%, Canada’s 9.7%, Frances 9.5% and Sweden’s 8.7%. It is predicted that if medical spending continues to rise by just 2% more than personal income by 2040 Medicare and Medicaid will hit 18.5% of the GDP leading the overall federal deficit to be 20.7% of GDP. New healthcare cost projections by Medicare and Medicaid indicate that health spending will reach 20% of the GDP by......

Words: 557 - Pages: 3

Premium Essay

Cost Reduction

...Intelligent Cost Reduction Developing & executing a program to reduce cost & create a sustainable operating platform July 2008  Contents Section 1 2 3 4 5 6 Point of view Anatomy of a successful total cost management program Beginning with the business & front office Opportunities in the support units Some lessons learned PwC qualifications to help Page 3 7 11 16 19 21 Point of view Point of view • Cost management is a key issue today and for the foreseeable future – The market is experiencing a severe liquidity crunch and the explosion of a global asset bubble well beyond sub-prime. At the root of this crisis is not only asset values, but the amount of capital in the financial system today versus the size and liquidity of the balance sheets (and off-balance sheet commitments) of financial institutions. This situation is not likely to reverse itself for a number of years. In the environment of de-leveraging and scarcity of capital, we believe fundamental re-thinking regarding business strategies, operating models and cost structures will be necessary. • A pre-securitization baseline may be the appropriate mindset – If one assumes that the securitization markets have significantly contracted in a permanent fashion, then the appropriate way to think about the business may be in a pre-securitization baseline, adjusted for key acquisitions/divestitures, etc. This means that the proper mindset to consider in the business strategy and budgeting area may...

Words: 4954 - Pages: 20

Premium Essay

Healthcare Costs

...INTRODUCTION The United States has a profound problem with health care spending. Rising health care costs are stifling economic growth, consuming increasing portions of the nation’s gross domestic product, and putting added burdens on businesses, the public sector, individuals, and families. GROSS DOMESTIC PRODUCT Health care accounts for about one-sixth of the entire economy — more than any other industry. Spending on health care totals about $2.5 trillion, 17.5% of our gross domestic product a measure of the value of all goods and services produced in the United States. That's up from 13.8% of Gross Domestic Product in 2000 and 5.2% in 1960, when health spending totaled just $27.5 billion — barely 1% of today’s level, according to the Kaiser Family Foundation, a nonpartisan health policy group. (http://usatoday30.usatoday.com/news/health/2009-06-19-health-economy) A variety of factors that has contributed to the growth in health care spending relative to the GDP. These factors include the following: • rapid development and dissemination of medical technology that expanded the treatment of disease • rising expectations about the value of health care services • government financing of health services • the nature of third-party reimbursement • the growth in the proportion of elderly • the lack of competitive forces in the health care system to increase efficiency and productivity in delivery of services , and • the misdistribution of physicians and other......

Words: 1922 - Pages: 8

Premium Essay

Healthcare Costs

...Costs Of Healthcare Christine Amargo HCA305 The U.S. Health Care System Sherry Grover June 9, 2014 Everyone wants to have access to health care and in order to access it they need insurance, but unfortunately not everyone can afford health insurance. The United States spends more money on health care than any other country, but raise the cost of health insurance to the citizens. Health care should be affordable if the government is willing to spend as much money as they are on it. Health insurance should be able to affordable to all classes lower, middle, and higher. The citizens of the United States has the right to know why their insurances cost are going up and if they are going to get more bang for their buck. The reason why healthcare cost is rising each year is because no one is managing the spending. Money is being spent between all accounts of healthcare and shared amongst each other. There needs to be a line where companies stop spending and try to manage the money they have if they don’t the cost of healthcare will just keep rising. The primary issues of healthcare cost are access to healthcare, and affordability of healthcare. The United States health care spending has been growing rapidly for many years, but many citizens are without appropriate health care. This is affecting the two governments major health insurance Medicaid and Medicare and the private insurance companies. As the health care spending rises, the citizens will be faced with difficult......

Words: 1975 - Pages: 8

Premium Essay

Healthcare Cost Access and Quality

...Health Care: Cost, Access and Quality-What does the Future Hold? Health care is a big debate in the United States today. With the implementation of the Patient Protection Affordable Care Act of 2010, health care is at the forefront of people’s minds. The PPACA of 2010 has been met with much opposition, but is the best step toward a National Program, which is needed to ensure a healthier nation. The lack of health care that exists now has caused a decline in the nation’s overall health and an increase in its overall health costs. The PPACA of 2010 has placed an increased focus on health care costs, accessibility to health care and the quality of health care that is provided. Healthcare costs have been on the rise for decades and continues to grow. There are many factors that contribute to this. People that are privately insured and have to pay little to no out of pocket for care, are over using the system. Since there is not much regulation on the market, care is driven by need as opposed to demand. With the growth of technology also comes an increase in cost. While new technology is important to the treatment and diagnosing of illness and disease, it is expensive to develop and test. The nation’s baby boomers are reaching the elderly age and that combined with increased life expectancy, the cost of providing these people with care is for more than the cost of the general population, nearly three times as high (Singh, D. & Shi, L. 2013). And lastly the model......

Words: 886 - Pages: 4

Free Essay

Biosimilars and Healthcare Costs

...Biosimilars – Does it reduce healthcare cost or not? As the US healthcare costs are skyrocketing, the legislators are making intensive efforts to find new ways to reduce them. One approach is to reduce the high cost of biologic drug products. Having the intention to reduce healthcare costs, the Congress established an abbreviated approval pathway for biosimilars as part of the Affordable Care Act (ACA), which became law in March 23, 2010. The Affordable Care Act authorized the US Food and Drug Administration (FDA) to develop regulations for the approval of biosimilars. As a matter of fact, the benefits of biosimilars to all its stakeholders seem modest due to the complexity of biological molecules, challenging manufacturing processes, expensive clinical studies and the barriers to market access. Unlike chemical-based prescription drugs, biologic drugs are derived from living cells. They are used to treat cancers, immunological diseases and other chronic illnesses. Biosimilars are generic versions of biological drugs that are similar to innovative biological drugs. The Patient Protection and Affordable Care Act (PPACA) became law in 2010. Section XII of the law allows an abbreviated approval pathway for biosimilars. FDA is currently developing a specific regulatory route to govern the abbreviated approval process for biosimilars. There are no biosimilars approved in the US under the law yet, but more than 17 Investigational New Drug (IND) Applications for biosimilar......

Words: 1491 - Pages: 6

Premium Essay

Rising of Healthcare Cost

...The Rising of Healthcare Costs Over the past 30 years, the American healthcare system has been afflicted by the continuous rise of healthcare cost. One of the reasons for the increase in healthcare cost is that in today’s society people are living longer lives than they did in the past and the prevalence rates of contracting chronic diseases and developing life threatening injuries are causing the United States healthcare system to suffer a financial crisis. Another reason for the rise in healthcare cost includes but is not limited to expensive hospital visits, complex procedures, and cost of prescriptions. Consumers find several ways to reduce healthcare cost for the insured and uninsured individuals. Some patients questioned where most of the money goes when they pay premiums for health treatments. There are some occurring solutions to the ever-rising cost of healthcare. Decisions you make can determine how much you pay for healthcare. Review your health insurance plan, you can do this by getting involved in your open enrollment, there you may find better or more affordable options available that may fit your needs. If there is no need or emergency in going to see your doctor other than for an annual checkup, getting a different health plan will be beneficial. If your employer subsidizes your care versus that of your dependents, it might make sense to have the dependents get their coverage on the open market, if they only subsidize the employee’s coverage. Other......

Words: 766 - Pages: 4

Premium Essay

Funding the Rising Cost of Us Healthcare

...Funding the Rising Cost of U.S. Health Care. BY Vilando. HSA500 November 15, 2015 Funding the Rising Cost of U.S. Health Care. The United States continues to spend significantly more on health care than any country in the world, however, even though with this statistics the U.S has a lot of uninsured and does not have the healthiest citizens. In this paper, opinions will be given on the rising cost of overall’s health care’s impact in the U.S economy, followed by a comparising and contrasting factors impacted by the new health care act, pros and cons of using the private insurance rather than using the new health care reforms and the cost associated with its implementation and access to different groups will also be discussed. Rising Cost of Health Care The cost of the U.S health care system is higher than any country in the world. Its efficiency is also under serious scrutiny. If it was not an emergency, most physicians would require insurance verification. Therefore patients will be delayed of treatment. Moreover, the health care system in the U.S should be redesigned in terms of prevention rather than treatment with people who are already sick. Insurance should not go higher for people that have pre-existing conditions or with more health risk. Also the emergence and new discoveries in the field of...

Words: 4666 - Pages: 19

Premium Essay

Health Improvement and Cost Reduction Plan

...2010 Health Improvement and Cost Reduction Plan (HICREP) Sammy Osei MPA/Healthcare Management Health Improvement and Cost Reduction Plan (HICREP) 2 INTRODUCTION Medicare, an entitlement program that provides healthcare benefits to seniors over 65 years old, patients with disability and those suffering from end stage renal diseases, contributes enormously to the rising cost of care in the United States. Key cost drivers within Medicare are the leading chronic diseases and its risk factors. This program plan institutes preventative educational and training programs to help minimize and alleviate ailments associated with major chronic diseases and its risk factors. The plan identifies demographic groups affected by leading chronic diseases, specifies target stakeholders, and justifies how their contribution impacts the program. This plan outlines program case statement detailing the mission, goals, objectives, organizational history and structure as well as plans devised for fundraising. The plan does a thorough problem analysis to identify unmet needs necessitating this intervention plan. This P Plan presents a financial statement that describes the tax status of the P-Plan and reports a year’s budget estimate with relevant financial policies that justifies and strategically integrates budget with objectives, goals and mission to ensure fiscal accountability and responsibility. A human resource structure is illustrated in this P-Plan detailing list of positions......

Words: 8065 - Pages: 33

Premium Essay

The U.S. Healthcare System

...The U.S. Health Care System Catherine Wiley HCS531 September 12, 2011 Kenneth Feldman The U.S. Health Care System A health care system is a “network of agencies, facilities, and providers of health care within a specific geographic region” (Widipedia). The health care system is designed to meet the health care needs of a target population. According to Shi and Singh (2008), “A health care delivery system has two primary objectives: 1. Provide health care to all its’ citizens; 2. Services must be cost effective and meet standards of quality” (5). A system, “consists of a set of interrelated and interdependent components designed to achieve some common goals, and the components are logically coordinated (Shi & Singh, 28). As Shi & Singh (2008) state the health care system in the United States is a mixed market system. The source of coverage comes from the government, insurance from employers, and private payment. The health care system in the United States is not a system because there is no standardization, and is fragmented. Financing, insurance, delivery, and payment is from private and public sources. These four components creates the fragmentation of the system. These components compose the Quad-function Model and are necessary for the delivery of care in the United States. The components overlap to varying degrees in traditional insurance, government-run......

Words: 1430 - Pages: 6

Free Essay

Cost Reduction Strategies for Manufacturing Unit

...1 SAVINGS FOR PROFITS © BY SUBODH KUMAR SINGH In today’s world when Corporate are struggling for profits and with fierce competition in the market, cost reductions, productivity enhancement and lean organizations have become today’s mantra s for survival.Folllowing are the key area where you can implement cost reduction methods with significant results. 1. Raw material procurement: 2. Logistics- Inbound and Outbound: 3. Warehouse and Stores: 4. Manufacturing Process (Production) : 5.Energy, fuel & Water 2 6.Information Management 7. Finance 8. Human Resources 8. Sales & marketing 3 FEW BASIC IDEAS PROCUREMENT IT CAN BE DIVIDED INTO TWO MAJOR GROUP A. PRODUCT B. SERVICES Raw material purchases constitute around 60-65% of the cost of product; hence any savings on this front would be significant for profit of the organization. 4 1. BULK BUYING: A. The company which has units spread across the geography can negotiate better price when the volumes are high, instead of buying for individual units its recommended to have central buying policy. B. You can negotiate better price if you can put your entire annual consumptions to a vendor and ask him for annual rate contracts. Bulk buying should be supported by bulk handling and storage system. 2. OPPORTUNITY BUYING: Most of commodities and raw material has seasonal Cycle of prices they peak and fall in intervals hence you have to look for the lowest price...

Words: 2408 - Pages: 10