Purpose
This memo will highlight a significant economic issue affecting healthcare delivery in the United States and demonstrate how it requires immediate and effective mitigation action. I have assessed the trends in healthcare spending and singled out one key economic problem: rising healthcare delivery costs. I drafted measures to address the problem of lower spending, inaccessibility of care, the cost of healthcare, and inequality in the health system.
Problem Statement
In the past years, healthcare spending in the U.S. has bounced up, reaching the $4.3 trillion mark in 2021(Shrank et al., 2021). Generally, this has been primarily created by pandemic-related reasons. While the efforts to control the expenditure are commendable, excessive spending on healthcare interrupts access, affordability, and equality standards, contributing to inadequate healthcare delivery. This is a significant economic issue, requiring broad-based economic research and analysis to discover the issue’s roots and develop and implement effective strategies. Economic methods like demand, cost, and supply curves can be utilized at this point. They will help to analyze the trends of healthcare spending and find opportunities for intervention. Investigating reasons for healthcare expenditure, for instance, organizational administration, private health insurance and public investments, draws attention to economic factors behind the rising expenditure levels.
Call for Action
From an economic perspective, strategies to address the issue of rising healthcare costs in America include expanding insurance coverage through alternative pathways such as strengthening individual insurance marketplaces and lowering the Medicare eligibility age to fifty-five, fostering bipartisan approaches and public-private partnerships for coverage expansion, and reallocating resources from ineffective care to fund coverage expansion effort (AMA, 2023). This can accelerate the transition to value-based care by increasing the adoption of the payment models in Medicare, aligning payment models with equity, stabilizing finances for independent primary care providers, and promoting care coordination. Also, advancing home-based care by formalizing changes to telehealth reimbursement, making some COVID-19-related reimbursement policies permanent, and balancing affordability with the need for innovation are among the actions that come in handy. These strategies strive to improve healthcare accessibility, ease of allocation, and equity in the U.S. health system while ensuring that the cost does not go through the roof, thus building long-term sustainability.
Comparison of U.S. and Japan Healthcare System
The U.S. healthcare system has many problems, but it is still impossible to guarantee that any citizen will get high-quality care. Although the United States is the country that spends more per capita than any other nation on healthcare, this system always falls considerably short of achievements in the field of equity, chronic disease management and provision of services that otherwise could be considered neglected: mental and oral healthcare and prevention. The U.S. has a system composed of doctors, facilities, insurance companies, and regulators in the private and public sectors. The communication and collaboration among the various arms of the system could be improved; hence, the system’s ability to handle public health emergencies properly is improved. However, despite facing the difficulties of an ageing population and high costs for healthcare, Japan’s healthcare system still provides better services and hence could be a benchmark for America. Japan’s universal health system gives complete coverage to all people, regardless of how much they have, this is to ensure all Japanese citizens that they have access to care day and night(Uno et al., 2023). The Japanese government actively leans on a large data bank to determine how healthcare policy decisions can be made and, subsequently, for health reforms based on evidence seeking to improve health delivery and cost containment. Additionally, Japan’s health policy encourages outpatient care and strives to solve the issue of regional disparity in the country’s healthcare resources, which the U.S. can adopt to improve access and efficiency within its healthcare system. By income porting some of Japan’s primary principles, the United States can implement comprehensive coverage, data-driven revamping, and expanding outpatient services, which may help it address its health system issue of high treatment costs and better the health outcomes of its population.
Critique of State and Business Sectors
There is uncertainty about whether the government and the private sector can be an effective means for correctly resolving this immediate problem of health service provision in the United States. As the policymaker and resource award holder, the government could and should carry out the mission of wide-ranging reforms targeted at lowering costs and improving deliverability. However, often, the administration and diverse interests hamper the efforts. For the most part, the government intervention may come under resistance from other participants, such as health insurers and healthcare providers, who are concerned that they can lose revenues or their independence(NLM, 2020). On the other hand, the private health sector, as the main driving force in healthcare and economically motivated, can open up new horizons and increase the system’s efficiency. Nevertheless, profit considerations may direct a cost-effective solution, but that could contribute to the expansion of gaps in care and level of results.
Regarding mitigation measures, collaborative attempts characterizing the government climate and private sector, applying for policies and market incentives, give us good hope for solving economic problems in healthcare. All stakeholders must promote collaboration to achieve a sustainable and equitable health system. They can do this by practising transparency and accountability.
In summary, the economic challenges for the healthcare delivery system in the USA can be best dealt with through economic analysis, comparison, and targeting of effective intervention policies. Using the outlined measures, we can pave the way for a healthcare system that is less costly yet improved, effective, efficient, and equitable and treats all Americans with the respect that such a system demands.
References
American Medical Association. (2023, March 20). Trends in health care spending. Retrieved from American Medical Association website: https://www.ama-assn.org/about/research/trends-health-care-spending
National Library of Medicine. (2020). The Health Care Delivery System. Retrieved from Nih.gov website: https://www.ncbi.nlm.nih.gov/books/NBK221227/
Shrank, W. H., DeParle, N.-A., Gottlieb, S., Jain, S. H., Orszag, P., Powers, B. W., & Wilensky, G. R. (2021). Health costs and financing: Challenges and strategies for a new administration. Health Affairs, 40(2), 235–242. https://doi.org/10.1377/hlthaff.2020.01560
Uno, S., Goto, R., Honda, K., Tokuda, M., Kamata, H., Shotaro Chubachi, … Hasegawa, N. (2023). Healthcare costs for hospitalized COVID-19 patients in a Japanese university hospital: a cross-sectional study. Cost Effectiveness and Resource Allocation, 21(1). https://doi.org/10.1186/s12962-023-00453-9
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