Economics : Discussion 6 peer responses

In responding to  your classmates, do you think principles such as demand or competition should dictate pricing, or should insurance companies or government agencies set pricing for physicians?

post # 1

Alexandria Airo 

Hello Everyone!

Insurance has become a system that is necessary within healthcare. However, there are benefits and drawbacks to it because even though health insurance can be helpful to have due to the adequate care that is needed, it can also cause several challenges for stakeholders. Some benefits for patients are protection from high medical and services costs, pay less for services needed, preventive care is provided at no cost, and there is a higher chance of being able to maintain health from essential health benefits needed (U.S. Centers for Medicare and Medicaid, 2021). For example, due to the increase cost in medical expenses and amount for services, patients do not have the ability to pay. However, with insurance patients only pay a smaller amount for the services instead of the full amount. 

Next, benefits for providers includes providing easier ways for billing, there are various ways to obtain reimbursement due to different payment systems, there is the ability to choose who they want to accept as patients depending on the type of insurance, and they get paid for each service that they perform (WebMD, 2021). With every physician being in a different financial situation, they can choose which patients they want to accept because some insurance plans provide increased or decreased payments. An article from the Physician Business Academy said Medicaid provide significantly lower payments than any other reimbursement system making physicians not want to include them in their practice (WebMD, 2021). Lastly, the benefits for insurance companies consist of having the ability to charge the services or procedures, gains of large amounts of money from collecting premiums, and they have control over what the patient pays and the physician’s payments. Insurance companies negotiate prices of how much services cost with physicians and most of the time they maintain the say of if they will cover the service needed or not (WebMD, 2021). Despite these benefits, there are some drawbacks from the insurance system for patients, providers, and insurance companies. 

Specifically, for patients, healthcare costs are still high, the patient may have less access to a doctor depending on the type of insurance, and not all diseases or services are covered (Brown, 1992). Insurance is still unaffordable for patients due to increases in deductibles, co-pays, and premiums, and with some insurances there is less access to healthcare because patients have to choose a physician within the insurance’s network. On the other hand, some drawbacks for providers are that it can take a long time to get compensation, requiring authorization requests, controlling access to services, and getting information about costs to relay to their patients (Ellsbury & Schneeweiss, 1988). Due to the control that health insurances now have, it is difficult for providers to provide care in the best way because of their hard access to services and costs, as some insurances and payment systems do not provide prices of coverage before the service is completed. Finally, a drawback for insurance companies consists of having a difficult time following the set of rules that the system has developed. Former President Clinton claimed that the health care system in the United States including the insurance system is uneconomical because we pay more for less (Kaiser Family Foundation, 2009), which can explain why insurance companies have a challenging time dealing with and following the system. If the insurance system is having a tough time, then the people are going to have a difficult time. 

With this information, there are relationships seen between stakeholders and the insurance industry. The demand theory can be applied to these relationships by the increase demand of patients needing access to healthcare due to the insurance cost decreasing. Also, as costs for health insurance decreases, the demand of patients needing access to care. With the relationship between providers, as there is a decrease in insurance cost and more availability to receiving care, there is an increase demand of providers from an increase number of patients. For insurance companies, when there is a low and more affordable cost of insurance, there is an increase demand and availability for use of insurance companies. In addition, when costs of insurance increases, there is a decrease in demand for insurance companies because less patients will be using and be able to afford healthcare. 

As insurance remains a relationship with patients, providers, and insurance companies, it also has a relationship with the quality of care performed by providers. Insurance does cause an impact on the quality of care provided by physicians/providers. Health insurance pushes and allows what can be used to treat a patient such as, medications, tests, and procedures. Therefore, when a treatment will not be covered or is decided to not be covered, the quality decreases because the patient will not be getting the care that they need and is best. Additionally, the Journal of Health Affairs states Medicaid and uninsured patients are more susceptible to poor quality from deferred and limited care (Spencer, 2013). In addition, uninsured and Medicaid patients are subject to being treated by lower-quality physicians compared to other patients in the same hospital (Spencer, 2013). Quality is also impacted by research illustrating that Medicaid patients are less likely to receive treatment from finding that medications were used more on private insurance patients (Spencer, 2013). Therefore, this information proves that physicians’ treatments and quality of care alters depending on a patient’s type of insurance. Personally, this is wrong. Yes, healthcare is something in the United States that has to be paid for and those payments are what most physicians these days work mostly for from experience. Regardless though, every individual should be given the same quality of care. 

Hope that everyone has a great week!

– Alexandria 

References:

Brown, E. R. (1992). Problems of health insurance coverage and health care in the United States: Public and private solution strategies. Cadernos De Saúde Pública, 8(3), 270–286.

Ellsbury, K. E., & Schneeweiss, R. (1988). Physician knowledge and attitudes about health insurance after the introduction of capitated health care plans. Journal of Family Practice, 26(1), 57–9. https://pubmed.ncbi.nlm.nih.gov/3339306/.

Kaiser Family Foundation. (2009, June 11). Former President Clinton calls U.S. health care system ‘uneconomical’. Kaiser Health News. https://khn.org/morning-breakout/dr00044272/.

Spencer, C. S., Gaskin, D. J., & Roberts, E. T. (2013). The quality of care delivered to patients within the same hospital varies by insurance type. Health Affairs, 32(10), 1731–1739.

U.S. Centers for Medicaid and Medicare. (2021). Health insurance: How it protects you from health and financial risks. HealthCare.gov. https://www.healthcare.gov/why-coverage-is-important/coverage-protects-you/.

WebMD. (2021). How physicians get paid. Medscape. https://www.medscape.com/courses/section/869626.

post # 2

Trina Cox 

The insurance system has benefits and drawbacks for patients, providers (physicians), and insurance companies. Identify at least one benefit and one drawback for each of these stakeholders. Explain how insurance benefits/hinders each stakeholder. How does the demand theory apply to the relationship between each stakeholder and the insurance industry? Does insurance impact the quality of care provided by physicians? In responding to at least two of your classmates, do you think principles such as demand or competition should dictate pricing, or should insurance companies or government agencies set pricing for physicians?

The insurance system has benefits and drawbacks for patients, providers and insurance companies. Through the insurance system in the United States, patients with can qualify for Medicare or Medicaid. Medicaid is a state federal program that provides health coverage to individuals with low-income. Patients over the age of 65 years old or that have a disability are eligible for Medicare (Medicareinteractive.org, n.d.). One set back of this insurance system is that individuals must meet certain criteria. For instance, to qualify for Medicaid in Florida a household of four can earn no more than $32,1718 per month to qualify financially for Medicaid (Benefits.gov, n.d.). The current insurance system benefits providers because they are guaranteed payment for services from private and federal insurance programs. One set back is that providers must accept a contracted rate, including patient’s deductible and copay with the insurance company (Davis, 2018). This may cause providers to focus on seeing a high volume of patients without giving quality care. Insurance companies benefit from the fee for service payment model due patients needing insurance coverage to stay healthy. The demand for healthcare gives insurance companies the upper hand in the healthcare industry. However, one set back is that insurance companies are viewed as only caring about making profit instead of improving the patient’s health. According to Long (2013) low reimbursement rates are a factor in providers not wanting to accept Medicaid patients. Providers may prefer seeing patients with private insurance that offer higher reimbursements rates. Therefore, the type of insurance coverage the patient has impacts the quality of care provided by physicians. Patients with private insurance coverage may receive better care because providers are receiving a fair reimbursement for services. Due to the Medicare and Medicaid strict eligibility guidelines, individuals are required to purchase insurance but not all can afford it.

References

Benefits.gov. (n.d.). Florida Medicaid. Retrieved from Davis, E. (2018).

Health Insurance Provider Network. Retrieved from

Long, S. K. (2013). Health Affairs. Physicians May Need More Than Higher Reimbursements To Expand Medicaid Participation: Findings From Washington State, 32(9). Retrieved from

Differences between Medicare and Medicaid. Retrieved from https://www.medicareinteractive.org/get-answers/medicare-basics/medicare-coverageoverview/differences-between-medicare-and-medicaid co