The high cost of healthcare has always been a concern for many Americans worried about their health and affordability. Despite efforts made through the Affordable Care Act (ACA), the country still has one of the world's most expensive care systems. Hence, for the uninsured, illnesses become a matter of life and death since hospitals cannot afford to cater to financial strains' without compensation. Since the healthcare institutions operate as business ventures, the costs are attributed to expensive drugs, insurance premiums, ineffective payment systems, and limited regulation of the sector that makes it easy for providers to take advantage of the situation through price hike.
Impact of Stressor in Our Organization
Consequently, high costs continue to impact hospital care prices. For our institution, inpatient and outpatient expenses increase annually, indicating the expensive charges needed to cater to essential checkups and hospitalizations. Still, with fewer practitioners, the hospital does not have extenders which can perform basic minor issues such as common cold at a lower cost. Since hospitals are ventures, hospitalization prices vary from one institution to another, which is catastrophic for patients. Indeed, such facts mean many are times where we have to turn away patients who need help but cannot access care because they do not have insurance. Unfortunately, with high insurance coverage costs, high overhead costs, health care costs are impacted as part of the gains go administrative costs. Hence, to influence hospital costs, there is a need to ensure a cost-effective labor force.
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Moreover, quality is adversely impacted as patients settle for affordable care that is ineffective to their conditions. There are no criteria for every drug in the market or new ones to ensure that some drugs are less costly. The same applies to the provision of medication approved by a physician. Therefore, some of our patients who cannot afford the drugs end up skipping medicines because they cannot turn to the hospital. Similarly, the high costs of hospitalization and tests mean that underprivileged persons fail to access the medical attention they need to manage serious illnesses. Indeed, as practitioners, any patient turned away due to financial strains indicates indigent patients' in consideration.
Articles’ summary
Lewandowski (2014) outlines the need to reduce administrative costs to ensure a cost-effective system that caters to patient care and quality. They argue that although some institutions are in good financial position, those who do not depict such success paint a clear picture of the influence of high operations cost on low-quality care. The author insists that institutions need to balance the hospital budget, input control, and legitimacy of medical procedures and overheads control for cost mitigation. When top managers keep track of hospitals' financial expenditure, it helps ensure that viable financial situations exist; patients are treated in the right manner, and payables are natured. In evaluating one of the hospitals named B, departments' overhead costs are allocated on a fixed rate basis that determines the number of beds and employees for cost analysis.
The article by Mathui et al. (2015) indicates that there should be an adaptation of better payment models for patient care without increasing healthcare costs. They outline that part of the causes for high costs include administrative costs and medicine. With the fee-for-service system, physicians and institutions focus on generating revenue, which means more tests and procedures. For patients without insurance covers, they end up paying more due to hospitalizations and unnecessary tests. The authors give an analysis taken by Henry Ford Hospitals in Detroit that indicates that 24% of underprivileged communities have a higher readmission chance. Therefore, an adaptation of a more effective payment system such as value-based focuses on prevention and cost control ensures that patients are not overcharged to cater to administration costs.
Strategies to Address the Organizational Impact
Through effective financial systems, providing a clear plan that helps manage high costs is made possible. Through articulate budgetary requirements, hospitals can keep a close eye to the financial capabilities from time to time. Such prevents any disparities that influence an institution's decision to compensate for missing funds. Additionally, mitigating overhead costs is more straightforward as hiring employees can be matched with available revenue.
Also, through a value-based care system, health providers are compensated based on the care's effectiveness. The system is more effective since it does not rely on the quantity of care as the service model's pay-for-service model. As a hospital, the systems help in better financial planning that prevents the entity from overcompensating due to over expenditure. Indeed, through the American Board of Internal Medicine (ABIM), practitioners are encouraged to make decisions on patient’s conditions based on appropriateness of the care rather than following guidelines that end up costing more money for tests not needed. Similarly, patient care improves, which is ideal in serving the various underprivileged persons who are turned away due to lack of insurance.
On the contrary, the interventions could negatively impact innovativeness. The hospital relies on revenue to conduct research on illnesses or invent new technologies to combat health issues. However, value-based systems can be demanding due to workload and inefficient performance measures that affect the quality of data available to proceed to research. With the focus shifting to lowered costs, funds available to conduct any research on health risks analysis could be an issue. Similarly, we could struggle with attracting skilled personnel that helps in researching how to improve systems. As Auerbach et al. (2018) assert, the increased delegation of work and technological innovations ensure that entities meet the patient's needs. Indeed, with tight budgets, working on innovative ideas is a risk that hospitals are unwilling to take.
References
Auerbach, D. I., Straiger, D. O., & Buerhaus, P. I. (2018). Growing ranks of advanced practice clinicians-implications for the physician workforce. The New England journal of medicine , 378 (25), 2358-2360.
Lewandowski, R. A. (2015). Cost Control of Medical Care in Public Hospitals–a Comparative Analysis. International Journal of Contemporary Management , 13 (1).
Mathur, P., Srivastava, S., & Mehta, J. L. (2015). High Cost of Healthcare in the United States-A Manifestation of Corporate Greed. J Forensic Med , 1 (1), 1000103.
