Spending And The Healthcare Economy
People have seen consistent rates of inflation over the past several decades in healthcare. This inflation has been driven by increases in costs for health insurance, technology utilization, and demand for qualified providers and facilities. Consider the many areas in which the U.S. healthcare system has seen steady rises in costs. Imagine you are a financial manager for an organization that has seen significant cost increases in the past few years or decades in an area related to your organization (e.g., supplies, technology, outside services). Prepare an outline for a proposal on how to help reduce or minimize these costs.Use your text as a resource for this assignment plus one other resource from the library. Please cite your sources. The outline should include the following:
Cost that is being looked at
History of increases
Potential future increases
1–2 suggestions for improvement or change
Sample Solution
Outline for a Proposal to Reduce Healthcare Costs
Organization: XYZ Hospital
Cost Being Looked At: Prescription Drugs
History of Increases
The cost of prescription drugs has been rising steadily for the past several decades. In 2020, the average American spent $1,260 per year on prescription drugs, up from $984 in 2010 (Kaiser Family Foundation, 2022).
Full Answer Section
There are several factors that have contributed to the rising cost of prescription drugs, including:- Increased research and development costs: Pharmaceutical companies spend billions of dollars each year on research and development to bring new drugs to market. These costs are passed on to consumers in the form of higher drug prices.
- Brand-name monopolies: Pharmaceutical companies often have monopolies on the drugs they develop. This allows them to set high prices without fear of competition.
- Lack of transparency: The drug pricing process is often opaque, making it difficult for consumers to compare prices and find the best deals.
- The aging population: As the population ages, there will be an increased demand for prescription drugs.
- The rise of chronic diseases: Chronic diseases, such as diabetes and cancer, are becoming more common, and they require expensive medications.
- The development of new, expensive drugs: Pharmaceutical companies are constantly developing new drugs, and many of these drugs are very expensive.
- Increase transparency:Â The drug pricing process should be made more transparent so that consumers can compare prices and find the best deals.
- Allow Medicare to negotiate drug prices: Medicare is currently prohibited from negotiating drug prices with pharmaceutical companies. Allowing Medicare to negotiate prices would help to lower the cost of prescription drugs for seniors.
- Support generic drug manufacturing: Generic drugs are much cheaper than brand-name drugs, and they are just as effective. Supporting generic drug manufacturing would help to increase competition and lower prices.
- Cap drug prices: The government could set a cap on the price of prescription drugs. This would help to prevent pharmaceutical companies from charging exorbitant prices.