What are cost effective care issues and their effects on sta

What are cost effective care issues and their effects on stakeholders in healthcare?

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Ans -

According to statistics , the health care costs in U.S exceed 17% of the GDP and continue to rise. In comparision other countries spend less of their GDP on health care bu have the same increasing trend. One of the primary causes is the increasing ageing of population and the development of treatments . Also, perverse incentives also contribute to the increase.

Poor costing systems have disastorous consequence . It is a well known management anxiom that what is not measured cannot be managed or improved. Since providers misunderstand their costs, they are unable to link cost to process improvements or outcomes, preventing them from making systematic cost reductions. Instead, providers turn to simplistic actions such as across the board cut in expensive services, staff compensation, and head count. But imposing arbitrary spending limits on discrete components of care , or on specific line item expense categories, achieves only marginal savings that ofte lead to higher total system cost and poorer outcomes. For example, as payors introduce high copayments to limit the use of expensive drugs, cost may balloon elsewhere in the system should patients overall health deteriorate and they subsequently require more services.

Making matters worse, participants in the health care systems do not even agree on what they mean by costs. When politicians and policy makers talk about cost reduction and bending the cost curve. ,\" they are typically referring to how much the the government or insurers pay to providers- not to the cost incurred by providers to deliver health care services. Cutting payor reimbursement does reduce the bill paid by insurers and lower providers revenue , but it does nothing to reduce the actual cost of delivering care. Providers share in this confusion. They often allocate their cost to procedures, departments , and services based not on the actual resources used to deliver care but on how much they are reimbursed. But reimbursement itself is based on arbitrary and inaccurate assumptions about the intensity of the care.