Health care is the hot button issue impacting every person in this country. As health care itself dramatically changes, the business of health care is evolving. Historically, a key feature of healthcare financing in this country was linked to employment during the advent of Blue Cross and Blue Shield, following the Great Depression. This left out the working poor, who had no healthcare benefits and also left out the unemployed and the retired. Medicare and Medicaid were implemented in the 1960s to fill those two gaps but people left out-the working poor and their children-were cared for mainly through the charity budgets of hospitals.
Since institutions have existed, businesses have sought to maximize their profits and the health care industry is no exception. The health care industry today is characterized by rapid growth, intense competition, high drug development costs and cost containment, continues to search for ways to become more efficient. As these costs continue to upward spiral, both the public and private sectors have begun experimenting with measures to contain costs. In the 1930s and 1960s, the federal government implemented healthcare provisions, through policy, by means of such programs as Blue Cross/Blue Shield, Medicare, and Medicaid. These efforts, which affected the national, regional, and local levels, involved significant and fundamental changes in the healthcare costs.
In 30 years, the population over 65 years of age will be roughly double what it is now. In relation to the population as a whole, it will be one and one-half times as large. Healthcare expenditures will continue to rise sharply long after the tail end of the baby boomers has reached 65. A real challenge will be when large numbers in that generation reach their 80s, an age when healthcare expenditures typically are about three times higher than for people in their 60s.The expectations of this aging population and their demands with regard to health care are much greater than previous generations. While this group is expected to live longer due to better health care, they will suffer more chronic diseases including cancer, heart disease, diabetes and dementia due to an unhealthy lifestyle.
American society places great value on technology, which encourages the development and use of high-tech medical treatments, even when the added benefit of these treatments is small compared to their cost. These advances are often used to benefit the aging American population; however, they often are available only to those with health insurance or independent wealth. Those enrolled in social insurance programs and the uninsured have less access and subsequently are less healthy. Thus, Medicare instituted fixed fees are paid to hospitals for treating specific illnesses. Then, the demand for a service and the payment has become disconnected. Medicare's new fixed-fee method of reimbursing hospitals is only affecting inpatient services, creating incentives for outpatient services, which ballooned throughout the late 1980s and the 1990s. Employers, meanwhile, face annual increases in the cost of health benefits. Better technology and therapeutics will be needed to provide more efficient and cost-effective methodologies, which will play a major role in the continued growth and success of the health industry. With this projected growth, the need for highly trained professionals will accelerate.
Over the last decade there has been a decrease in enrollment in nursing schools coinciding with the fact that hospitals have been cutting costs by using less-trained people in patient care roles (Pulcini & Mahoney 1998). Even though these are two separate happenings, a possible link could be made. Hospitals are concerned with cutting cost; using less-trained people to dispense nursing care has been one effective avenue. The current nursing staffing crisis and shortage of registered nurses poses a real problem to the nation's health care, especially since the 9/11 terrorist attacks. Also, the potential impact of the war on terrorism on nurse staffing vacancies will place an even greater strain on nurses. An important issue in the nation's health care is that registered nurses make up the largest sector of the healthcare workforce. The primary cause of the workforce attrition is the aging of nurses.
Increasing competitive environment, in both the domestic and international health care arenas, has exerted downward pressure on pricing. Proprietary drugs are facing increasing competition from lower priced generic entries, as well as from international market forces, particularly India. This has increasingly led to high drug development costs to add to the sense of urgency to become more efficient.
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