Economics and healthcare delivery systems have a direct effect on society because health, like any other good or service, is desired as it generates utility.
The Health Production Theory explains the role of the production of health and its influence by various factors, including the amount of medical care consumed. There is also a direct relationship between healthcare economics and society’s access to health insurance. Economics and healthcare delivery systems have a direct effect on society because health, like any other good or service, is desired because it generates utility.
Rising incomes mean more disposable income for health services, both basic and optional. Because health insurance continues to offer narrow ranges of benefits for small monthly fees, many people pay directly for optional health services. The first to notice this trend are entrepreneurs, both physicians and businessmen who come from the resource side. These entrepreneurs have led in the most noticeable physical and organizational restructuring of health care: the decentralization of hospital and physician services to single-specialty or single-patient-type institutes” that offer all services in an integrated form. Institutes now house women and children’s services, cancer, orthopedics, eye, diabetes, renal and stroke services, asthma and allergies, heart and fitness, along the lines of existing infertility institutes.
The task of tying these disparate institutes together falls to the regional healthcare system, where the links are financial and information systems, not geographic or facility. Many physicians, whose skills have not kept up with advances in medical science, prove to be surplus under managed care. At the same time, doctors trained in genetics find they cannot afford to practice independently since health plans are reluctant to open the gate to what they perceive as expensive services that will not prove out for years. Manpower surplus gives the advantage to health plans, which can pick and choose. IPAs are a low-involvement framework for physicians who only want to contract together.
Medical groups can not only contract but also enhance the practice experience, and health plans tend to like them. In terms of health insurance, as the country enjoys the long boom” produced by the leveraging of knowledge into wealth, there are actually two pathways emerging in payment. One pathway is mediated by insurance, which is still related to individuals through work or through the government. Mandates have stair-stepped most employers into mandated coverage, leaving out small rural businesses where no managed care plan exists, or certain other exceptions. Unfortunately, Congress has been unable to fully reduce the 17 percent of the population without insurance, since small business growth, immigration, and premium increases offset any gain. Universal coverage mandates await the political maturation of minority groups into both elected leadership positions and voter participation.
The second pathway is payment arranged outside of insurance. This is the fastest-growing form at present. Direct consumer payment covers most self-care, alternative health services, nutraceuticals,” cosmetic surgery, much non-organic mental health, non-Medicaid long-term care, and physical therapy past approved limits. For seniors and families, some health services are built into housing costs. Foundations and not-for-profits cover problems not easily handled by insurance, such as migrant worker care or open-door clinics for the inner city.
Health insurance depresses innovation as providers tend to only give care that is covered. This is done by excluding experimental” procedures and underpaying for new services, causing providers to be reluctant to commit resources. Additionally, patients’ access is restricted on a per-case basis, such as with bone marrow transplants for third-stage breast cancer or testing of family members at risk for cancer. Prevention efforts are also limited as they can only be paid for if delivered to covered individuals in their role as patients, even though prevention at the family or community levels may be necessary. Insurance related to individuals does not work for those who lack the competence to manage it or their healthcare.
Open-access services should be subsidized. Note the untenable economics of emergency rooms, the safety net for people who are outside the formal system. Insurers, particularly government plans, could stimulate such innovation by offering budget subsidies for services that are meant to reach the uninsurable.
