Final Reflection

Cassandra Quinn

Arizona State University

December 6, 2015

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Why does the United States, the world’s richest country in the world, spend the most

money on healthcare but underperform in comparison to other developed nations that pay less?

Unfortunately there are many answers to this question, but not one single formula for success

when it comes to improving the US healthcare system to being the most efficient in the world.

For such a developed nation, the US fails to control costs and does not guarantee access to

healthcare. Why is it that the same medical procedure performed in the same country can be

more expensive at one place compared to the next? Or that only a certain percentage of the

population has access to healthcare while others are left helpless? The country lacks transparency

on the essential information relative to receiving care such as estimated costs and the quality of

different healthcare services. In addition to this, our nation faces social inequalities that result in

healthcare only being given to the ones who can afford it. The proposed solution is setting a flat

fee that is paid for by the provider for all healthcare services and generating universal healthcare.

This sounds impossible, but by adopting healthcare system characteristics of countries such as

Japan and Singapore that spend roughly a 5-10% GDP on healthcare expenditures, the US could

ultimately achieve lowering healthcare costs.¹ These countries made it possible by emphasizing

“social harmony”, personal responsibility, and transparency- all things that our nation could learn

from these two countries, and implement for beneficial change.

It’s no surprise that the lack of knowledge on the costs of healthcare procedures will

hinder the treatment process. The fact of the matter is that patients rarely even know the cost of a

procedure until after they receive it because they assume their insurance will cover it. Often

times the price and the quality they are receiving for their treatment do not equate. To state it

simply- a higher price does not necessarily mean higher quality. This alone is a contributing

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factor to America frivolously spending their money and wasting it. An issue in our system is that

we are instilling competition in the wrong area. Rather than sparking competition in the

physicians by holding their care accountable, the competition lies within the different insurance

companies where the consumer satisfaction isn’t the main priority. Instead, the money gained in

their pocket is the main concern. In fee for service care where providers make more money on

the tests and procedures they perform without any accountability on the care that is given, it’s no

wonder why healthcare costs are so high. When you incentivize the provider with

reimbursements based on the value of care given and keeping patients healthy, the cost of

healthcare will go down. When providers are given the opportunity to profit from delivering care

at a lower cost than contracted amounts, the incentive of competing to provide the most valuable

care is driven. If a healthcare provider treats the patient with an amount that is higher of lower

than the flat fee price that was established by the provider to cover the cost of care for a patient,

the providers share in savings or losses with the payer. This drives the incentive to provide care

at the most efficient level, reducing costs and increasing the quality of care. The shift to value-

based care requires collaboration between payers and providers, the last stakeholder on the list is

the patient.

Establishing a healthcare system that is developed with the basic fundamentalism of

consumer transparency seems straightforward, but requires participation and collaboration from

all three stakeholders: the payer, the provider, and the patient. The issue of delivering quality

care at a reduced rate has been addressed, but now the dilemma is how the nation will pay for it

and how it will incentivize the consumer, or better yet, guarantee coverage for everyone. The

notion of guaranteed access to care is granted by universal healthcare. Singapore holds social

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harmony as a priority in their system. This means ensuring that everything in society works well

and smoothly by not denying anyone healthcare no matter who they are. This eliminates

vulnerable populations and creates equality for everyone. Singapore has made universal care

possible through government subsidies and by requiring all individuals to contribute private

individual savings of healthcare through funds so that everyone is granted access to care.² Both

employers and employees are required to contribute a percentage of their salary to payroll taxes,

while the self-employed contributions are based on income. Most would argue that this is too

socialized so a happy medium must be met. What if individual costs to healthcare could be

lowered by your health? The healthier you are, the lower your insurance premium. This

incentivizes the consumer to stay healthy. Currently we have a system where the patient is

provided with no incentive to stay healthy. If right now they can live unhealthy or live healthy

and still receive the same coverage, the popular response is to live unhealthy. Which is especially

easy when we live in a world that makes it more convenient to do so. To further this initiative,

there can be actions made to help eliminate unhealthy behavior. Sin taxes would be placed on

sugar and tobacco products. Sounds very extreme but this could go one of two ways. Either the

healthcare system will receive increased funding from people who would continue to participate

in these risky behaviors, or the population would slowly stray away from these habits and over

time receive healthier population outcomes. So those living unhealthy lifestyles would ultimately

be paying the consequences, but how else can you promote healthy behavior if there is no

penalty for living unhealthy? The rest of the required funding coming from people’s paychecks

could hopefully be lowered over time. This process is very long term oriented, but could achieve

hopefully better results.

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Lastly I will explain the initiatives of the whole healthcare organization that will make

this all possible. Physicians will be provided with resources that inform them of the exact costs

of healthcare procedures to gain awareness and initiate the process of cutting costs where

needed. By determining which procedures are absolutely necessary for the best quality care, and

performing them only if the cost of that procedure is the most efficient method. Next, both the

physician and patient are rewarded if the patient is healthy. The physician faces the possibility of

profiting from insurance companies and the patient has the opportunity to lower their insurance

premiums. Personal responsibility of maintaining good health would be underway due to the

possible benefits and penalties the individual would face. Overtime, chronic conditions (the most

common diseases that cause death) could be reduced, and the nation could focus their attention to

other prevalent diseases.³

Whether a healthcare provider or an insurance payer, the success in evolving the US

healthcare system depends on improving the quality of care provided, reducing costs, and

improving access. This can be possible by creating better transparency of care, collaboration of

all parties, and initiating personal responsibility. The process is very long term, but could

ultimately lead to the US spending a lower amount on healthcare expenditures. The United States

has the potential to have a very successful and efficient healthcare system, it just needs to make a

few adjustments before achieving better results.

References

1. Singapore. World Health Organization. Available at:

http://www.who.int/countries/sgp/en/. Accessed July 2015.

2. International Profiles of Healthcare Systems. Commonwealthfund.org. Available at:

http://www.commonwealthfund.org/~/media/files/publications/fund-report/2015/jan/

1802_mossialos_intl_profiles_2014_v7.pdf. Accessed July 2015.

3. Chronic Disease Overview. Centers for Disease Control and Prevention 2015. Available

at: http://www.cdc.gov/chronicdisease/overview/. Accessed July 2015.