The Demand of Health Care Services Workshop Proposal Part l

The Demand of Health Care Services Workshop Proposal Part l


The Demand of Health Care Services Workshop Proposal Part l

As the human services framework changes from a business-to-plan of action to a business-to-shopper show, patients are winding up more dynamic and drawn in members about their protection suppliers, inclusion alternatives, medicinal requirements, and treatment designs. Progressions in innovation have additionally added to the move in the social insurance framework. Subsequently, correspondence could easily compare to ever and with the help of current innovation, it has prompted an excess of web-based life outlets and web applications that enable buyers to impart all the more effectively and progressively with their wellbeing suppliers and other medicinal services experts.

Demand for Health Care Services

Human services are greatly unique from other “merchandise and enterprises” that customers by and large buy. Human services are badly characterized, and the final product is unclear, immense areas of the social insurance industry are vanquished by non-benefit associations/suppliers, and installments are made by outsiders (private and government safety net providers) (Morrisey, 2016). These components are altogether present in different enterprises; anyway, none of these components are overall present in the meantime as they are in social insurance (Morrisey, 2016).

The FDA is the U.S. will affirm a medicine or gadget on the off chance that it is turned out to be protected and viable. For meds, the approval procedure relies upon the correlation of a one treatment to a current treatment (Burke and Ryan, 2014). The standards are less strict for restorative gadgets, many are “discharged” for market under the “510(k)” arrangement, which requires just that a gadget be considerably equal to another gadget as of now available” (Burke and Ryan, 2014). There are right now no prerequisites for new gadgets or medications to be more adequate or a lesser measure of existing allowed medicines (Burke and Ryan, 2014). There are payers, for example Medicare, which have implemented these newer technologies without considering comparative effectiveness or cost effectiveness (Burke & Ryan, 2014). Thus, pricey innovative therapies are adopted lacking good proof that they give better patient outcomes (Burke & Ryan, 2014). A current illustration comes from the endorsement of new cancer drugs, which will cost over $100,000 per year and are only estimated to prolong life for a little more than a month (Burke & Ryan, 2014).

The medicinal services framework is changing into a buyer and patient focused conveyance display. An attention on both patient commitment and shopper commitment has a huge job in enhancing the general consideration and results and additionally keeping social insurance costs down (Burke and Ryan, 2014). Late research demonstrates that dynamic patient/customer commitment relates to diminished usage of therapeutic administrations and lower costs in human services (Burke and Ryan, 2014). This type of commitment is turning into an essential point of convergence of human services strategy and social insurance financial aspects. Shopper/quiet needs identify with human services administrations since patient commitment will be used as an asset or apparatus in accomplishing the three key objectives of enhancing results, offering the most extreme patient consideration, and bringing down the over expenses related with social insurance administrations (Burke and Ryan, 2014).

Cost Structure for the Delivery of Health Care Services

Approximately one-fifth of the U.S. population exists in rural areas (GEORGETOWN UNIVERSITY, 2003). Many people who live in rural areas are not situated financially and are often categorized as poverty-stricken, whereas those who reside in urban areas are deemed well-off, in regards to health care. According to data and reports, it is more common for those in rural populations to participate in precarious health-related behaviors and to experience increased rates of activity limitations and chronic conditions (GEORGETOWN UNIVERSITY, 2003). Rural residents are often uninsured for extended periods of time.

A huge percentage of the rural population in comparison to the urban population reports fair to poor physical and mental health (GEORGETOWN UNIVERSITY, 2003). Case in point, the amount of rural residents reporting fair to poor physical health is approximately one and half time the amount of urban residents. Rural residents aged 18 and older have larger percentages than urban residents that account for restrictions associated to recreational, social, and family activities. The overall median health care expenditures for rural residents is $434, this is somewhat higher than those for the urban residents at $418 (GEORGETOWN UNIVERSITY, 2003). Rural populations pay a higher percentage at 29 percent of their health care costs out-of-pocket than urban populations do, at 23 percent (GEORGETOWN UNIVERSITY, 2003).

Impact of Specialized Services on Health Care Costs

Specialized health care services (example: diabetes clinic and cancer institute’s) demand highly skilled and educated HCPs and medical specialists to deliver the highest quality of care to patients. The main force behind the growing number of medical specialists is the continuous development of medical technology. The expansion of therapeutic and diagnostic alternatives is due to continuous, quick advances in technology that are readily available to health care specialists. Thanks to third-party insurance payers, consumers are now freed from “financial restrictions”, resulting in a large portion of patients transitioning to medical practitioners who can give them the most refined, current treatment available (Leiyu, 2012). Thus, the quick advancement of medical technology adds to the high demand for specialty services and offers a momentum for additional specialty development. Therefore, drastically higher insurance repayment for specialists in relation to primary care providers also contributes to the existing imbalance in the U.S. health care system (Leiyu, 2012).

In the resource-based relative value scale (RBRVS), designed for U.S. Medicare physician payment, PCPs go on receiving lower payments than specialists for similar work; this is because in the past, provider payments were established based on probable practice costs and the overall work effort supplied (Leiyu, 2012). Furthermore, many insurance companies will disburse funds for hospital-based multifaceted diagnostic and invasive surgeries/treatments using modernized technology, but not for consultations and regular wellness/preventive visits (Leiyu, 2012). Primary care services are more or less, equally comparable to specialized services, yet specialized services are more expensive. The overall importance of effective primary care services should be better appreciated and understood in order to improve health outcomes, reduce costs, and deliver the utmost quality of health care available to consumers. Competition among providers such as primary care services versus specialized care services (for patients and payor contracts) can ultimately have a positive impact on health care costs (Dash, 2010).

Specialized Service Centers vs. Hospitals

In the past three decades the actual number of hospitals in the U.S. and the number of admissions per person has been declining; the same can be said about the on average length of hospital stays (Jones & Bartlett Publishers, 2016). Regardless, the costs of services received and the delivery of health care services within a hospital setting have continued to skyrocket in costs. The reason for this drastic change is due to advances in technology which have led to a faster and less invasive procedures, fixed with greater than before pressure from third-party payers (Medicaid, Medicare, insurance companies), health trends are seeing outpatient procedures at specialized centers trump hospital visits and hospitalizations (Jones & Bartlett Publishers, 2016). For example, urgent care centers are said to be one of the most up and coming recent trends in the delivery of health care which provide a variety of advantages to the consumer over the traditional hospital ER department, money and time being two big factors.

These specialized centers are developed to allow easy access, open availability, and rapid care for walk-in patients who need quick care for treatment of illnesses or injuries that are not categorized as life-threatening enough to require a trip to the hospital in a timely manner. Consumers dread long waiting periods in the ER to be seen by a physician and the same can be said about scheduling an appointment, which may take several weeks to see their PCP. Many consumers find specialized centers convenient, quick, and more importantly affordable (Jones & Bartlett Publishers, 2016).

For-Profit vs. a Non-Profit Health Care Organization

Non-profit and for-profit health care facilities continue to play a significant role in the financing and delivery of health care services in the U.S. as the past has shown. For-profit managed care organizations are competitive and actively search for contracts challenging the non-profit groups, and the increase in numbers of those enrolling in HMOs happened amongst for-profit businesses (Sackman, 2016). For-profit companies are regularly lowering prices compared to non-profit companies and offer added services (Sackman, 2016). Since they manage a larger share of consumers, the for-profit managed care organizations are pushing the rest of the system to imitate their methods to lower expenditures (Sackman, 2016).

There are not significant differences between for-profit hospitals and nonprofit hospitals (Cheney, 2016). For-profit and nonprofit hospitals are essentially comparable organizations with faintly different cultural approaches to running the economics of health care (Cheney, 2016). Both organizations share the same core mission which is to deliver the utmost quality of care possible. While each organization may function by somewhat different regulations and rules based on their business or tax arrangement, they both have the same fundamental challenges and goals (Cheney, 2016). For-profit hospitals contribute a distinctive component to the mix: producing a return for investors (Cheney, 2016). This added element gives the organizational culture at for-profits an ingeniously different flavor than the one at their nonprofit counterparts (Cheney, 2016). Cheney (2016), “The differences between for-profits and nonprofits reflect cultural nuances rather than cultural divides. While quality care is a priority for both, the culture at for-profits is business-driven. The culture at nonprofits is service-driven. Good hospitals need both. Without the business aspects on one hand and the service aspects on the other, you can’t function well.”

Consumers: Cost Structure for the Delivery of Health Care Services

There are numerous explanations as to why it is imperative for consumers to have a general understanding and knowledge of the cost structure for health care services. According to The COMMONWEALTH FUND  (2016), ” Transparency and better public information on quality and cost are vital for three main reasons: 1) to help HCPs improve by benchmarking their performance against others; 2) to encourage private insurers and public programs to reward quality and efficiency; and 3) to help patients make informed choices about their care.” It is also significant to have transparency; which will help level the “playing field”. The wide-spread method of charging patients an assortment of prices for similar care is intrinsically unfair, more than ever when the uninsured are being charged increased rates compared to other patients. The bottom line is that when consumers understand the cost structure for the delivery of health care they have more power to make knowledgeable, informed decisions regarding their overall care which includes: insurance providers, primary care physicians, treatment plans and courses of action.

Major Sources of Health Care Spending

The relationship between health care spending growth and the economy of the United States is inherently intricate and multidimensional. The U.S. health care expenditures have progressively increased as a share of GDP over the last century, with increases from 5.0% of GDP in 1960 to 17.4% in 2013 (THE HENRY J. KAISER FAMILY FOUNDATION, 2013). Throughout this time frame the mix up of services and goods consumed along with the programs, payers, and sponsors of health spending have witnessed striking changes (THE HENRY J. KAISER FAMILY FOUNDATION, 2013). Elements that add to the spending growth include price inflation, changes in health care utilization, advances in medical technology, and population demographics (U.S. Department of Health & Human Services, 2005).

Trend of Health Care Costs

The rate of spending in U.S. health care system has surpassed the growth rate in the GDP, inflation, and population for the last several years (U.S. Department of Health & Human Services, 2005). The most current year of data accessible was in 2003, the sum of nationwide spending on medical care skyrocketed to $1.67 trillion, or $5,670 per person (U.S. Department of Health & Human Services, 2005). In the entire economy, rapidly increasing spending is deemed to decrease the rate of expansion in GDP and employment, despite the fact of rising inflation (U.S. Department of Health & Human Services, 2005). Economists view the increase in health care spending as a positive impact on the economy and consumers (U.S. Department of Health & Human Services, 2005). From their perspective, increased health care spending is viewed as improving overall right of entry to modernized health care technologies, medications, and treatments (U.S. Department of Health & Human Services, 2005).

Technology and Health Care Costs

Modern technology has allowed society to market in new ways that reach millions of people in real time. Society no longer has to use the “traditional” means of marketing such as print ads, television commercials and radio advertisements. Thanks in large part to the Internet, advertisements can be created and posted throughout the web on social media platforms with the click of a mouse. With the landscape shift in health care giving more power and control to consumers, new forms of health care delivery, prepaid health plans, and the ever-changing regulatory environment surrounding health care is most common to use social media platforms as a means of marketing. The health care industry has become a more competitive and resource regulated market, as a result marketing directors must create alternative and less costly health care techniques, follow government regulations, and utilize a balanced budget.

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. Mobile technology and medical devices maintain importance in the medical system mainly because they can assist in meeting the projected goal of reducing medical spending in health care.

Consumers: Health Care Spending

The health care landscape now consists of a consumer-driven model, the patients not only influence health care expenditures but they also have more control over their health care needs giving them the power to make all the decisions regarding their insurance plans, treatment/services, and medical records. The reasons for this shift are in large part due to the constant changes surrounding an individual’s insurance coverage and the Affordable Care Act. These continuously modified circumstances have permitted consumers right of entry to receive and send out health-related information instantaneously by use of patient portals social media platforms, and smartphones (Khan, 2014).

Payment Sources and Mechanisms in Health Care

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.

With the Affordable Care Act in place, patients have the ability to shop around, compare and contrast health insurance plans to establish which coverage plan meets their individual needs and wants and see what insurance group offers the best value (Kahn, 2014). Giving consumers the ability to compare plan co-pays, premiums, and direct payments alongside one another generate better cost-transparency than ever before in the health care system. With this health care cost transparency along with the means to decide on which coverage is best for them; provides patients the ability to become actively engaged health care consumers, as an alternative to being a passive participant in the once existing health care system. Health care consumers expect to have the utmost quality of care possible which leads to optimal customer satisfaction/experience (Berkowitz, 2011). The consumer-driven model authorizes patients to directly monitor their health on top of their health care spending, engage and network with health care systems outside the walls of a medical facility, and utilize technology to better their medical situations.


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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