Problems/Issues
Numerous issues plague the American healthcare system and need fixing. The United States GDP grew by $3.2 trillion, or 18 percent, between 1980 and 2015. In 2014, healthcare accounted for 11.3% of Germany’s GDP and 9.1% of the UK’s (Henderson et al., 2018). Aetna acknowledges that these observations are alarming. A major factor in the issue is the widespread use of fee-for-service payment methods. An estimated 86% of physicians in 2016 had some prearranged fee-for-service payment plan (Henderson et al., 2018). What is more worrisome is that in 2016 alone, Americans’ out-of-pocket expenditure rose from $250 to an unbelievable $1,400. Mark Bertolini remarked that the healthcare system has to change because these various patterns will ultimately become unsustainable if they continue to expand. He saw his new position as CEO as a great opportunity to serve the group’s constituents. Prices in the healthcare industry are spiraling out of control, and action is needed to stabilize the industry for the sake of its consumers.
Possible Solutions
Enhanced primary care utilization
Primary care is often less costly than specialty treatment. One strategy to increase the use of primary care is to increase the number of primary-care physicians (WHO, 2018) and insurance companies raising primary care payment rates to entice medical students to seek employment in primary care. The federal government may decide to increase funding for primary care residency programs. Uncertainty surrounds the feasibility of certain approaches to increase primary care’s allure to medical school applicants.
Restricted access to healthcare
As a cost-cutting measure, limiting patient access to treatment has been common practice for quite some time. Before the Affordable Care Act, insurance companies may deny coverage to those who were more likely to need it or drop coverage entirely for those who used various healthcare services. However, such conduct is now unlawful in the United States due to the passage of the Affordable Care Act.
The government can make it more onerous to participate in healthcare assistance programs. Like many other insurance companies, Aetna could increase its customers’ out-of-pocket costs. For instance, insurance companies may put restrictions on how often and for what services a patient may be compensated. Raise the minimum payment and deductible. Cut down on how much they have to spend on certain medical services. Thus, individuals have a financial incentive to limit their use of healthcare services. It might take a long time to get treatment via certain insurance companies. Sometimes getting consent from patients is necessary before conducting diagnostic tests or referring them to specialists. The physicians a person may see may be limited. Enrollment processes and regulations are often cumbersome.
Recommended Solutions
Use of bundled payments
Bundled payments are helpful for payers who are interested in providing value-based treatment. To the benefit of both insurers and providers, bundled payments lower insurers’ financial risks compared to other payment options (Duncan, 2022). The financial risk for insurers is reduced with a bundled payment system, for instance, since they are responsible for just one payment that includes all services covered in a certain care episode. Bundled payments also make it considerably simpler for insurers to maintain track of reimbursement totals since they may be delivered to a provider organization as a single lump sum payment or as dividend payments to providers participating in it.
Expected Outcomes
Value-based insurance design and population health management techniques may help insurers care for high-risk, high-cost patients. A bundled payment model may make it possible for an insurer to pay for a wide range of treatments under a single population health program in the future. As the expense of healthcare in the United States continues to rise, insurers may find relief if bundled payments are combined with population health management. Insurers might potentially save billions of dollars by adopting cost-effective bundled payments to promote cost-effective health initiatives for populations.
Conclusion
Fee-for-service payment models may lower the quality of treatment while simultaneously driving up healthcare costs. To begin with, they inspire wasteful spending, especially on luxurious goods and services. Also, they do not make any moves toward making providers’ financial incentives more consistent. As a result, patients may get unnecessary or unwanted care, and physicians may have divergent opinions on the best course of action. Not only do insurers have to foot the bill for these inflated costs, but so do the people who use health care services because of increases in premiums, deductibles, and co-payments.
References
Duncan, I. (2022). Value-based contracting in health care. Health Insurance. https://www.intechopen.com/chapters/80812
Henderson, R. M., Eisenstat, R., & Preble, M. G. (2018). Aetna and the Transformation of Health Care. Harvard Business School Case 318-048.
WHO,(2018). Imbalances in rural primary care: a scoping literature review with an emphasis on the WHO European Region. https://apps.who.int/iris/bitstream/handle/10665/346351/WHO-HIS-SDS-2018.58-eng.pdf?sequence=1
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