Addressing Healthcare Costs And The Associated Challenges

Addressing Healthcare Costs and the Associated Challenges

Economic inefficiencies and other challenges affect healthcare provision in the US. Healthcare facilities, just like other business firms, are affected by changes in the market. Indeed, the rising costs of medical care, including the increasing costs of insurance coverage, premium hospital fees, and prescription drug costs, have been a significant impediment to healthcare delivery in the United States and, specifically, Bay Area Hospital in Oregon. This paper demonstrates how economic factors affect healthcare organizations while drawing examples from this organization. The paper will begin by exploring the economic challenge posed by the rising cost of healthcare, followed by the healthcare disparities associated with the challenges. The paper will then justify the need to address the challenges associated with the high cost of healthcare and the potential solutions. An analysis of the predicted outcomes and opportunities for growth will follow this.

Socioeconomic and Diversity Disparities Associated with Rising Healthcare Costs

The rising costs of healthcare affect impoverished communities more than wealthy ones. An increase in healthcare costs means those with constrained resources will divert them elsewhere. This reduces their quality of life and increases their mortality rates. Further, Christopher et al. (2018) gathered that increased insurance premiums and out-of-pocket healthcare costs redistributed 1.37% of total income from the poorer to the richer in 2014. This has implications for the USA's gap between the richer and the poorer. It also has an impact on race. According to Iceland and Sakamoto (2022), the overall poverty rate in the USA is 11.4%, with over 37 million people. Native Americans, 23%, African Americans, 19%, and Hispanics, 17%, have the highest poverty rates constituting about 20.4 million individuals. As such, increased healthcare costs translate to less access to healthcare services for these populations and more financial resources transferred from their income to the more affluent people, predominantly white and Asian Americans.

Second, the costs can be driven down through increased competition. In business, a decrease in demand decreases costs. An increase in the number of service providers has the same effect. As such, there is a need for preventive care emphasis to address chronic illnesses, which increases healthcare demand. According to Wang and Wang (2021), preventive care investment reduces the need and intensity of healthcare services at later stages as patients age and due to avoided chronic diseases. In addition, the consolidation of healthcare providers must be addressed. This is because mergers reduce competition, increasing organizational power and hence their ability to dictate costs (Berkeley, 2018). Further, transparent fees need to be emphasized, which help clients make better decisions driving the prices down through competition.

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