Introduction
Health has been defined as the best wealth for mankind. The age old proverb that, ‘Health is Wealth’ stands true all the more today, in this contemporary world where suddenly the number of illnesses are on the rise and each day mankind is confronted with a new type of disease caused by some virus or the arise of some new mutant bacteria. The result is an outbreak of an epidemic, causing a huge loss to humanity and a situation of panic for the entire world. Such consequences require immense support in terms of disaster mitigation and sound health care infrastructure.
The healthcare systems of today are changing at a very past pace. This is not only because of the increasing competition between various pharmaceutical industries for the discovery of new drugs and the desire to achieve more but, also due to the fast occurrences of ethical issues involved in the discovery and testing of the new drugs. Constantly, new policies and regulations are being developed and imposed in order to keep a check on the unhealthy practices that are maligning the health care sector at an even faster pace. Further, the rising health care costs, the resulting complexities in the insurance claims, the growing average age and the desire to live more, poor life style (resulting in lifestyle diseases) and pollution (resulting in the poor health conditions of not only the humans but, also the mother earth) are some of the resulting facets that needs to be tackled on an emergency footing in order to control the situation (Evans, K., 2009).
Thus, there is a dire need to address the issues impacting health care sector. Looking at the massiveness of the sector and the enormity of the issues that impact health care sector, it becomes difficult to present all the facets in a single study. Hence, the purpose of this paper will be restricted to the current and future economic issues impacting health care sector. The paper will discuss some of the major problems that need to be addressed in order to improve the health care services. At the end, it also proposes some recommendations and preventive measures to address the issues.
Objectives
Needless to say, the objectives form the backbone of a research paper and give suitable direction to the task to be accomplished. Some core objectives of this study are listed below:
Literature Review
Usually, a literature review is an in-depth analysis of the work done by previous researchers. It helps in identifying the gaps in their research findings and making judgements based on one’s own study of the topic.
The impact of economic issues on health care sector has been divided into three sections. The concept is to study the positive and negative impacts of the prevailing economic issues in the health care sector on government, employer and public in particular. This is the era of global economies and a change at one level may have drastic effects on several other levels. The rate of increase in the amount spent in health care industry is one such example. In recent years, it has been observed that particularly in US, the amount of money spent in delivering health care services has overtaken the growth rate of gross domestic product, inflation and the population. The resultant is a negatively growing US economy. The economic indicators like Gross domestic product, rising prices and employment can be affected drastically due to these type of issues. These effects also severely impact other connected sectors like economy, industries, management and households. However, a research study by the UN on the other hand revealed that, an increase in expenditure in health care sector can result in growth and enhanced employment opportunities within the associated sectors. Additionally, it was also agreed that high expenditure will result in improving the health of the working population which in turn will increase productivity.
Negative effects on cumulative economic outcomes can cause a shift in job opportunities to places having low insurance costs. For example, a shift in the jobs in a car manufacturing plant from US to Canada occurred due to negligible costs of health care in Canada. It was noted that employees are abstaining themselves from hiring full time employers due to rising health care costs. Wal-Mart, a trendsetter in industries and the employer of 1.2 Million workers in the US spends $4.7 billion every year on the health care and retirement paybacks to its employees.
Positive effects on cumulative economic outcomes include stimulation of job opportunities in the related sectors. This observation is supported by a report from Business Week which reported an increase in 1.7 million jobs in the health care sector since 2001.
There is also an increase in the productivity of employees with access to better health care facilities. According to another estimation report, it was observed that there was an addition of about $3.2 Trillion per year to the GDP between the years 1970 and 2000. Some of these gains were the result of an increase in the amount of money poured into health care sector.
Research reviews also point towards several reverse causes which can be held responsible for the woes in the health care sector. One reason can be the rising income leading to higher expenditure in the health care industry. Further, the per capita income can be considered as a determinant of health expenditures incurred.
The biggest challenge in such a scenario however, is to make the increasing expenditure in the health care sector sustainable. Expenditure incurred in health care sector can be sustainable only if it does not lead to a reduction in consumption in the areas of non- health care sector. The challenge for employer to bear the rising costs is another issue. In the event of increasing health insurance costs, employers cut down the employment numbers but, at the same time increase the working hours of the employees.
Unfortunately, the burden lies with the government to bear the costs of unsustainable growth. The costs in Nassau in New York is rising at a level which is unsustainable and presently this increase is consuming about 40% of all the revenues earned by property tax and 11% of the cost of net annual budget (A, Johnson. T., 2007).
Meeting the rising costs of health care along with the change in demography is another issue to ponder. It is becoming hard to ensure social security in such a situation. Further, the affordability cost of personal insurance is becoming difficult to manage in the event of private employers dropping their public insurance policies.
Altogether, there are five major sectors that need to be addressed in order to improve the health care sector and safeguard it from the impact of economic drifts in the long run. These include staff shortages, control-check on pharmaceutical companies, rising obesity, decreased funding and an increasing number of uninsured families.
Methodology
Methodology forms the backbone of any study and a careful selection of methodology can prove to be beneficial for achieving good results from the study.
In other words, a methodology is a qualitative study based on the analysis and review of the existing researches and articles available on the internet. Several papers and reviews were studied along with several articles for collecting data. Data collection involved content analysis of the select papers related to health care services, policies and framework. Care was taken to access the information through primary sources and wherever possible appropriate references were provided (The Economist, 2009).
Further, the collected data was analyzed by developing codes. The coded data was further studied so as to arrive at the themes which were then concluded as the major issues and challenges that are currently prevalent and may arise in the not so distant future. Finally, the results obtained were concluded and appropriate measures were suggested to prevent the healthcare sector from getting impacted directly.
Results
A careful study of the papers and reviews revealed several impending challenges and the resulting emergence of the challenges that may arise in future. It was observed that the issues are visible not only in the health care sector but, also in the allied sectors that are directly or indirectly related to the health care sector. The results can be tabulated as follows:
Increase in prices of the services that are directly related to the health care sector
Effects on GDP, employment and inflation rates.
Increase in the cost of Government Health insurance programs resulting in an increase in the taxes on commercial and family establishments
Increasing health costs may prompt government to make stringent rules for the eligibility of insurance policies
Reduction in the expenditure of other sectors of importance like education and infrastructure
Rising costs in one country can result in its goods and services being costlier in the international market resulting in the loss of overall market value
High health care cost can reduce outreach to services in the healthcare sector, make the consumer poorer and exhaust the money saved for other purposes
A shift in job opportunities from the region of high health care cost to that of the low health care cost
Resistance faced towards hiring full time employees due to rising cost of health care
Stimulation in the job opportunities in the allied sectors of health care industry.
An increase in per capita income results in an increase in health care expenditure.
The sustainability of health care sector with an increase in expenditure is another challenge
The burden of sharing the expenditure falls on the government and has been increasing rapidly
Rising cost is resulting in an increasing population that stands uninsured (Evans. F., 1985)
Conclusion and Discussion
The reviews on the economic issues impacting healthcare sector have thrown light on some of the glaring issues in the health care sector. The results can also be broadly classified into issues impacting the government, employers and general public. As far as the government is concerned, the major issues are meeting the rising costs of the health care sector without increasing the burden of taxes on other sectors. Making growth in health care sector sustainable is yet another challenge for the government in rule. Further, the development of policies and regulations that will help in dealing with these issues also lies on the shoulders of the government.
Undoubtedly, the employers form the backbone of an economy as they are responsible for the GDP of the country. They provide the much needed boost to the economy. The issue with the employers lies in the rising cost of employees’ insurance services and an increasing burden of bearing that cost. Further, the tendency of employees to move to places having low health care cost is another problem that needs to be dealt carefully (Walker, E. P., 2008). Some other challenges for employers include, providing healthy work conditions, appropriate working hours and timely provision of retirement benefits.
The general public is faced with the challenges of bearing the cost of health care services in the absence of any appropriate employer to lead health insurance scheme and social security systems in place. Further, the increasing awareness and spending capacity has led to an increase in expenditure for health services which is although necessary but, at the same time may be led by cosmetic anxieties. They also stand the challenge of losing their consuming capacities in other service areas like education, entertainment, food etc.
At the end, the challenges can be grouped into negative and the positive effects. But it should be noted that the negative effects far outnumber the positive effects in outlay. So there is a need to curb on growing menaces in the health care sector (Hall, R., & Jones, C., 2007).
Recommendations
As the reviews point, there is a need to address the triangulated sectors of government, employer and employee in order to meet the challenges and issues posed by the healthcare sector. It must be taken into consideration that since healthcare sectors can’t be isolated from the other sectors of life, there is a need to put in sincere and comprehensive efforts to develop a complex interactive frame work for improving the situations for not only health care industry, but also for the employers, government and the employees. Some of the recommendations are listed below:
For the Government
There is a need to build and develop coordinated and linked policy frameworks for health care sectors
Polices should be directed towards
price control of health care services,
lowering the insurance costs,
incentivizing the employers providing healthy work environment to their employees (which in turn may lower the health risks),
Creating awareness among the general public about the benefits of good health as well as the difference between necessity and luxury of the health care services. This will help in reducing the unwanted expenditure by the general public,
Appropriate policies for the employers providing health care services and also for their retention within the country (Schneck, L., 2008)
Making the increasing growth of health care sector sustainable - This will help in reducing the negative effect in other sectors and the health sector will be able to link its growth with the development of the allied sectors
For an Employer
There is a need to make provisions for the appropriate health schemes for employees, especially those working in industries or in the hazardous situations. The challenge of high health costs can be met by taking group insurances. Further, adoption of healthy work conditions, safe, sound and secure work place will help in reducing the incident cost of health care service by a great extent, which in turn will reduce the overall expenditure incurred by the health care sector
The decline in employment needs to be addressed with care because this factor will impact the economy directly. There is a need to frame polices. Further, the employees should consider it their moral obligations to contribute towards the economy of the country they are residing in (M, Leisinger. Khaus., 2007)
Issues regarding decrease in profits due to increasing healthcare costs can be dealt with by cutting on the expenditures that are unnecessary and investing in measures that may lead to increase in output
For the Public
General public should spend on initial healthcare services in order to ensure healthy life as a pro measure. Further, they should be made aware of the challenges that may arise due to any type of health issues
There is also a need to create awareness about the benefits of insurance cover and of availing the same in a timely manner. As of otherwise, uninsured public may become debt ridden in an event of health disorder (Beurhaus, P., 2009)
The public should not forgo expenditure in other sectors especially food, education and entertainment. Expenses on food will keep public in sound physical health, expenditure on education will help them to increase their buying capacity and the expenditure on entertainment will ensure sound mental health of people
The public should also be made aware about the ill effects of unnecessary and unwanted medical care. This will help in curbing the growth in health care sector that is occurring due to rise in per capita income.
Thus, in a nutshell it can be inferred that there are several issues that are clouting the health care sector. Decrease in funds for the necessary services, increase in number of families that are not covered under insurance, increase in the instances of the life style diseases, malpractices by the pharmaceutical industry, ethical issues involved with the sector are some of the menaces that need to be tackled with immediate effect. Further, there is a need to ensure coordinated development because growth is never isolated. Improvement of one or more factors in one sector may result either in the increase or decrease in the growth of the allied sector (Cunningham, S., 2008). Coordinated efforts will lead to positive sustainable growth not only for the health care services, but also for the allied services that are thriving on it. This in turn will help in controlling the rising prices of medical services and insurance policies. A healthy public in a healthy nation will help in increasing the productivity and decreasing the spread of illness and mortality rates throughout the length and breadth of the country.
References
Evans, K. (2009, April 13). Fewer openings in nursing field. Wall Street Journal. Retrieved from http://www.wsj.com/articles/SB123958748163712537
Walker, E. P. (2008, October 10). Financial crises will impact healthcare heavily. Retrieved from http://www.medpagetoday.com/PublicHealthPolicy/HealthPolicy/11237
Schneck, L. (2008, October 16). Medical Groups Feel Bite of U.S. Credit Calamity. Retrieved from http://www.mgma.com/article.axpx?id=22676
Cunningham, S. (2008). “Doctors’ Strikes and Mortality: A Review [Review]. Social Science and Medicine, 67, 1784-88.
Hall, R., & Jones, C. (2007, February). The Value of Life and the Rise in Health Spending. The Quaterly Journal of Economics, 122.
Evans, F. (1985). Prenatal care and pregnancy outcomes during the recession: The Washington state experience. American Journal of Public Health, 75(8), 866-869.
Beurhaus, P. (2009, July/August). The recent surge in nursing employment: Causes and implications. Health Affairs, 24(4), 657-58.
A Recession Breathes Life: Less Smog Equals More Toddlers. (2009, July 1). The Economist. Retrieved from http://www.economist.com/node/13764868
A, Johnson. T. (2007, Sep 13). TB fight begins after 40 years. Times of India
M, Leisinger. Khaus. (2007,). Business and Society review. [Review of the Book]. Corporate Philanthropy: The Top of Pyramid, 112(3), 315-342.
