The Demand of Health Care Services Workshop Proposal Part II

The Demand of Health Care Services Workshop Proposal Part II

HCS 440

The Demand of Health Care Services Workshop Proposal Part II

As the health care system changes from a business-to-business model to a business-to-consumer model, patients are becoming more active and engaged participants about their insurance providers, coverage options, medical needs, and treatment plans. Advancements in technology have also contributed to the shift in the health care system. As a result, communication is more important than ever and with the assistance of modern technology, it has led to an overabundance of social media outlets and internet applications that allow consumers to communicate more efficiently and in real-time with their health providers and other health care professionals.

Cost-Benefit Analysis in Health Care

The study of health care resource expenditures that are related to potential medical benefits is called cost-benefit analysis. When faced with prioritizing limited resources this analysis is beneficial in determining the benefits and level of access to health care being provided. In health economics, the evaluation of factors such as costs and benefits of various programs and services is a vital part of the process.

Cost-Benefit Techniques

The cost-effective analysis method is an alternative to cost-benefit analysis (CBA). This method differentiates the comparative costs to the outcomes/effects of two or more courses of action (CDC, 2015). CEA is most functional when analysts face constraints which avert them from conducting cost-benefit analysis. CEA measures costs in a common monetary value (££) and the effectiveness of an option in terms of physical units (BETTEREVALUATION, 2016). This method uses a set of measures and techniques that assist in identifying efficient use of resources; this method is used as a comparative analysis in order to objectively measure outcomes such as cost-effectiveness and cost-benefit (Rice, Unruh, 2016). insurance companies may utilize this tool to select which services to provide with plans, and what medications they will cover. The purpose of this tool is to measure the impact a decision will make, not just financial but also how it will impact the patients.

This method is used in addition to Cost-Effectiveness Analysis (CEA). The difference is that BIA develops a comprehensive economic assessment for adopting a new policy, technology, and or intervention for all budget levels within a health care organization. According to U.S. Department of Veterans Affairs (2016), “A budget impact analysis (BIA) takes the true “unit” cost of an intervention and multiplies it by the number of people affected by the intervention to provide an understanding of the total budget required to fund the intervention.” Furthermore, BIA uses short-term data with no discounting to determine what specific resources are needed during its analysis process.

Fixed Costs vs. Variable Costs

Fixed costs such as electricity, facility and equipment maintenance at hospitals will stay the same regardless of the number of patients admitted or services used or not used. A hospital that carries a lot of fixed costs will struggle if it doesn’t maintain an adequate number of admissions. Variable expenses such as payroll, medical equipment and marketing are ever changing and dependent on the amount of business and the cost involved in conducting that business. If less business is conducted then variable expenses also decrease, but fixed costs will stay the same regardless, thus it is better have more variable costs than fixed costs in health care.

Methods and Tools: Used for Financial and Economic Challenges in Health Care

The fundamental economic considerations of supply and demand require methods for quantitative analysis such as econometric modeling for population-based resource allocation exercises, macro-level modeling of the effect of wealth or lack thereof on health and models that determine the technical efficiency of health interventions (Chisholm & Evans, 2007). Economic evaluation throughout these processes is often used to guide clinical decisions and health policies by establishing the cost and impact of health interventions while amplifying population health for the available means.

Role of Health Insurance Companies/ Billing & Reimbursement Processes

In the U.S. there are generally three ways in which health care costs are paid for: out of pocket/personal funds, private insurance, and government insurance programs (Trivedi, 2016). Two of the largest government insurance programs are Medicaid and Medicare. Medicaid gives health care coverage to people who are considered living below what they deem “poverty level” and also to those with disabilities (Trivedi, 2016). Medicare gives health care coverage to the elderly and the disabled as well as those undergoing long-term medical treatments (Trivedi, 2016). Nearly 30% of the nation’s population has coverage through government insurance or government provided care (Trivedi, 2016).

There are a total of six main government programs available that assist in health care services: Medicaid, Medicare, the Department of Defense TRICARE and TRICARE for Life programs (DOD TRICARE), the State Children’s Health Insurance Program (SCHIP), the Veterans Health Administration (VHA) program, and the Indian Health Service (IHS) program. These programs all provide medical services to about one-third of Americans. The federal government has a primary responsibility to make sure that more than $500 billion is invested yearly in these programs and that the funds are used intelligently to diminish the burden of injury, illness, and disability as well as improve the functioning and health of the nation’s population.

Diabetes: Changes in Health Care Services

Diabetes affects more than 29.1 million Americans and is one of the fastest-growing diseases in the nation (CDC, 2016). As obesity and diabetes rates rise across the nation, health care institutions have begun creating outpatient diabetes centers (Wiesman, 2015). Inpatient and outpatient diabetes programs will provide all the necessary tools and resources to assist people living with diabetes types 1 and 2. Health care facilities working alongside local communities can integrate the essentials of community-based programs that are thriving across the health care continuum to better patient-centered outcomes, enable patient acceptability, and ultimately lead to enhanced patient engagement and satisfaction (Philis-Tsimikas, A., & Gallo, L. C., 2014).

Diabetes: Challenges of Delivering Health Care Services

Diabetes is affecting millions of Americans and has grown rapidly over the past few decades. “In 2012, 29.1 million Americans, or 9.3% of the population, had diabetes. Approximately 1.25 million American children and adults have type 1 diabetes” (Statistics about Diabetes, 2014). Of the 29.1 million, 21 million were diagnosed, and 8.1 million were undiagnosed (Statistics about Diabetes, 2014). In the year 2012, there was 1.7 million new diagnosis for diabetes and 86 million Americans,

20 years of age and older were diagnosed with pre-diabetes (Statistics about Diabetes, 2014). Diabetes continues to be the 7th leading cause of death in the United States (Statistics about Diabetes, 2014). Different health care access options are available for the targeted audiences, and how diabetes programs are marketed.

Diabetes affects high-risk minority communities, such as African-Americans, Asian-Americans, Pacific Islanders, and Native Americans. By knowing more information about the potential consumers’ background, they can help HCPs better treat those they encounter and seek out better insurance coverage. Research has shown that the most life-threatening health issues that African Americans face today are diabetes. Just a few other leading causes of death in ages sixty-five and over. Heart disease, cancer, and stroke are also the top three causes of death for white, Asian/Pacific Islander, and Hispanics. Some ethnic populations are prone to have more health issues than other ethnic groups. The reasons why they differ are because of ethnicity, culture, education, and barriers to their access to health care. Differences in a culture where diet and exercise are involved are the reason African Americans get exposed to these types of conditions. These conditions include hypertension, coronary artery disease, stroke, end-stage renal disease, dementia, diabetes, and certain cancers.

When looking at diabetes, you will see a large number representing that roughly 29.1 million people who currently are living with diabetes (CDC, 2016). But when you look at diabetes through different ethnic groups you will notice that some groups are more affected than others. As a result, the HCPs and program director will need to target ethnic groups such as African-Americans, Asian-Americans, Pacific Islanders and Native Americans and educate them based on their particular ethnic beliefs and culture. Each ethnicity has a different way of living based on their convictions and characteristics of their culture; which is why there is an increase in diabetes within these particular ethnic groups.

New Types of Health Care Services

In recent years several improvements to the health care system have been made including access to medical facilities, cost reduction and the overall quality of attention (Gustafson, Hawkins, & Boberg, 1999). Changes to health policies and financing and the practices of healthcare providers have aided in driving these positive changes (Gustafson, Hawkins, & Boberg, 1999). The landscape of the health care system is shifting from a business-to-business model to a business-to-consumer model. With this change, patients are gaining more control over health care decisions being made. Advancements in technology and refinements in medical equipment have also aided in the overall improvements in health care. Communication plays a significant role in the health care industry. For health care providers and professionals to properly care for and diagnosis patients they must communicate effectively.

As technology continues to advance, many health care organizations are using social media to communicate and stay in contact with consumers and patients. Social media gives health care providers and professionals the ability to communicate with customers cheaply and speedily from marketing new services, promoting wellness programs, and announcing the newest accomplishments in patient care (Backman, 2015). More often than not, health care facilities are using social media to voice their vision and mission, provide health education, and give a detailed description of the services they offer.

Another common use of social media in the health care setting is to sponsor online support groups that allow people who are dealing with chronic conditions such as diabetes to find support among others who are dealing with the same disease. Clinicians, physicians, and other health care professionals use websites to educate the public on universal conditions, coping mechanisms, and how to enhance the quality of life for people who are battling a disease (Backman, 2015). However, using social media as a form of communication in the health care industry comes with challenges. These implications can include risks to information accuracy, individual privacy, and organizational reputation (Backman, 2015). The marketing of diabetes will include in the website, social media outlets, and television commercials. By using these various communication methods, will increase patient understanding and retaining of diabetes valuable related information. The suggestions will improve involvement in self-care activities, and promotes better health outcomes.

Impact of Preventative Care Services

When it comes to combating the diabetes epidemic in this country, knowledge is power (Lourdes Health System, 2015). Patients who are diagnosed with diabetes have to sustain a current lifestyle to control this complex disease. Diabetes requires the patient to have knowledge of self-management education to allow the patient to responsibly manage their daily care which at times can become increasingly overwhelming for anyone (Lourdes Health System, 2015). Health care professionals and providers assist in the setup process of the treatment plan, but it is up to the patient to carry the plan out which includes making informed and educated decisions about healthy eating, exercise, and medication. Diabetes Education Programs being launched throughout the U.S. are designed to instruct patients how to self-confidently manage their disease as well address any concerns the patients may have (Lourdes Health System, 2015). The education program will use the Chronic Care Model which is known to improve diabetes as well as chronic disease care in the community and the primary care medical home (Philis-Tsimikas, A., & Gallo, L. C., 2014). One of the key components of the Chronic Care Model is self-management education. This form of teaching connects with improved knowledge, self-care behavior, and improved clinical outcomes such as, lower self-reported weight, higher quality of life, healthy coping, and reduce costs in patients with diabetes (Philis-Tsimikas, A., & Gallo, L. C., 2014).

The impacts outside agencies have on the services offered at the facility that is available to the health care consumer varied by specific factors. The main contributing factors to disability, illnesses, and death in the United States are chronic medical conditions; approximately half of the United States is plagued by chronic ailments (Hoffman et al., 1996). One of the health care industries greatest tasks and challenges is the treatment of these continual conditions (Anderson and Knickman, 2001). Several government programs were developed to aid people suffering from chronic medical conditions, such as diabetes. The Affordable Care Act and Better Diabetes Care Act both boosted the quality of diabetes treatment, care and screening and prevention by improving surveillance and quality standards nationwide. Medicaid and Medicare also offer prevention programs that specifically target diabetes (National Center for Chronic Disease Prevention and Health Promotion, 2012). The Center for Disease Control and Prevention (CDC) and the U.S. Department of Health and Human Services (HHS) both partner with local and national organizations to measure the effects and burden of diabetes. Also, informing the general public with the collected medical data with hopes of providing strategies for dealing with diabetes as well as prevention of the condition.

Drivers and Barriers for Health Care Reform

In the United States, there are almost 30 million people presently living with diabetes and an additional 86 million individuals diagnosed with pre-diabetes (Alexandria, 2014). As a result of the increased rates of diabetes, this epidemic takes a devastating toll mentally, physically, emotionally, and financially on millions of Americans across the country (Alexandria, 2014). Therefore the American Diabetes Association publicizes its state and federal legislative and regulatory priorities every year as part of their ongoing efforts to stop diabetes (Alexandria, 2014). Health care reforms such as the Patient Protection and Affordable Care Act and the Health Care and Educations Affordability Act offer new insight and information on stopping diabetes that also aids with marketing the diabetes program (ADA, 2011).

Challenges: Government and Insurance

The Affordable Care Act has made it possible for families and individuals who do not have the opportunity to purchase insurance through their employer and who are not eligible for public aid programs to acquire a medical plan within the individual insurance market. Prior to the ACA, countless individuals who were previously diagnosed with diabetes or other serious medical conditions had a challenging time locating an insurance that would accept them that was sensibly priced and provided adequate coverage (ADA, 2015). For young people who suffer with diabetes or other pre-existing conditions, now have the continued option for health care coverage. According to the ACA, young adults can have coverage until the age of 26 years old if they choose to remain on their parent’s insurance plan. There is coverage for people who have diabetes that include individual projects that cannot deny or increase a patient’s charge because they have diabetes or any other pre-existing medical condition. Patients have the power to ask for a summary of benefits and coverage of a health plan’s benefits.


A tug-of-war has begun in the economic spectrum of the healthcare industry. With the quality care requirements becoming stringent, the income starts to diminish from one point of the range to another. With the balance of power changing, the days of employers, payers, and providers managing mainstream care are numbered. As the U.S. health system is undergoing this new shift, it is more and more important for medical professionals to meet the needs and wants of their up and coming customers. As a result of consumers taking a more active role in their health care and as social media continues to engage, the conventional B2B-B2C difference is surfacing. The change in patient care and evolving technology is causing a shift in the group to group connections, values and ideas are being copied from C2C (customer to customer) and C2B (customer to business) relations, and compatible consumers are educating relationships with one another and profoundly influencing provider treatment decisions and selection. Despite the current and potential future challenges that may arise down the line, the health system has proved their solutions to be effective.


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