Health Care Industry

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HealthCare Industry

HealthCare Industry

Thehealth care sector has been experiencing significant changes in thepast decade as the stakeholders try to address the pressingchallenges, such as the escalating demand for health services, costof care, and demand for quality (Vitalari, 2014). This paper willaddress the significant changes that have taken place in the past onedecade, the current status, and the changes will take place in thehealth care sector in the next decade.

Past:Changes in the past 10 years

Technology

Thehealth care sector has experienced dramatic changes in the last tenyears as a result. These changes can be characterized by digitizationof patient or client experience. Many hospitals have moved from hardcopies to electronic health records, where patient data is storedelectronically and shared by health care providers virtually (Smith,2014). Telemedicine has gained popularity with the past 10 yearssince it helps patients in remote area access qualified providersthrough the video chat technology. Wireless communication has allowedproviders to monitor patients before and after operation without thefear of potential impacts of unplugging client monitoring devices.

Impactof economic and finance

Economictrends affect the health care sector by determining the level ofemployment, which in turn influences the percentage of income-basedhealth insurance coverage at any given time. The period of the past10 years has experienced two recessions, a slight one that started in2001 and a major one that began in 2007 (Chernew, 2009). The increasein the rate of inflation and has been associated with a decline inpeople who can afford to finance their health care out-of-pocket.

Economicand financial methods and tools

Economicas well as financial tools have been developed by individual citizensand the government, both the state and the federal government. At theindividual level, some citizens have opened medical savings accountswhere most of them are able to finance between 10 % and 20 % of theirhealth care needs (Align America, 2015). The government has beenusing legislations (such as the Affordable Care Act) to increase thenumber of insured citizens, which has been accomplished by increasestaxes and penalties for those who can afford insurance coverage, butfails to buy one (Align America, 2015). These measures have helpedpeople living in poor economic conditions access health care.

Changesin payment sources as well as mechanisms

Inoverall, the type of sources for health care finance has not changedsignificantly, but the proportions of their respective contributionshave changed drastically. The number of people who rely on insuranceprograms as the primary sources of their health care funds has beenincreasing at an average rate of 11.0 % annually to the current 84.6% of the national population (NCSL, 2015). This has resulted in asignificant decline in the people who pay for health careout-of-pocket. Therefore, medical reimbursement has gainedsignificance as the major mechanism for financing health care needs.Reimbursement comes from public firms (such as Medicaid and Medicare)and private insurers, but the public insurance agencies have beengrowing faster than the private companies.

Presentstatus

Roleof technology in modern health care

Technologyplays four major roles in the modern health care sector. First,telemedicine and the increase in the use of information technologyhave increased access to care (Smith, 2014). Secondly, technology hasplayed a critical role in containing the cost of care by reducing thenumber of employees required to serve a given number of clients(Smith, 2014). Third, technology has increased efficiency ofdelivering care. Lastly, technology has reduced medical errors sincecomputerized machines are more accurate than humans, which hasenhanced the quality of care.

Currentstate of the entire health care sector

Currently,the health care sector is characterized the high cost of deliveringcare, consumption of a high share of the GDP, and a disproportionatepatient outcome. The high cost of care and a high consumption of GDPare attributed to an increase in chronic illnesses, population aging,and poverty levels (Vitalari, 2014). The U.S. spends the highestproportion of its GDP (20 %) compared to other nations (Vitalari,2014). The industry is in the process of adopting modern technology,which is perceived to be the most effective way of addressing themost pressing challenges.

Currenteconomic and financial tools

Currently,budgetary allocations made to the health care sector are made from aninformed point of view than in than the past. The stakeholders areable to use economic tools (such as cost analysis, budget impactanalysis, and economic evaluation tools) to determine the cost andbenefits associated with each financial allocation (Smith, 2014). Thelaw is another effective tool that the government is using to controleconomic and financial conditions affecting the health care sector.

Paymentsources as well as mechanisms

Thepayment options that are currently used in the health care can bebroadly classified into three major types. The first category is theprivate insurance reimbursement that covers about 67.3 % of theindividuals below 64 years (Center for Disease Control, 2015). Thesecond source is the public insurance programs (including Medicareand Medicaid) that covers about 17.7 % of people aged 18-64 years and42 % of those aged below 18 years (CDC, 2015). Many people out of the10 % of the uninsured population finance their health careout-of-pocket, which is the third source of finance.

Future:Changes in the next one decade

Futurerole of technology

Morehealth care facilities will continue to adopt the latest technologyin an effort to enhance the quality of care and contain the cost ofdelivering that care. In addition, technology is likely to bring newtreatment interventions (such as less invasive imaging) that willenhance patient satisfaction in the next one decade (Smith, 2014).Therefore, besides cost control and quality issues, hospitals willaim at satisfying their clients and enhancing the treatment outcomeusing modern technology.

Economicand financial issues

Theescalating cost of care and a large number of uninsured citizens willcontinue to be the major economic issues affecting the health caresector. This will increase the burden to the taxpayer in case thegovernment decides to continue financing health for the poor usingthe taxpayers’ funds (Chernew, 2009). With the increase inlifestyle issues (such as obesity) and the population aging, thedemand for health services will increase in a disproportionate way tothe level of public as well as the private financing.

Economicand financial tools

Thecurrent economic and financial tools (such as the budget impactanalysis) will continue to be useful in the coming decade. This isbecause the need to find the value for each dollar spent within thehealth care sector will increase following the claims of the lack ofbalance between amount allocated to health and the level of qualityof services that has been achieved (Chernew, 2009). These tools willstill be effective because the sector will still be experiencing thesame type of challenges, but on larger scale.

Effectivenessof the current payment methods as well as mechanisms

Thecurrent methods as well as mechanisms of payment will still be in usein the coming decade since there is no indication of the discovery ofa complete set of new ones. Although these methods (including thepublic sponsored and private insurance programs) will be of greathealth to a larger population, their effectiveness will be reduced byan increase in number of older adults who are vulnerable toillnesses, increase in the overall cost of care, and lifestyle issues(Chernew, 2009).

Anticipatedbiggest changes

Thereare two significant changes that are likely to be experienced in thehealth care sector. First, the demand for quality care and advancedmedical interventions will increase (Vitalari, 2014). Secondly, newtechnologies (such as wearable technology and health careinformatics) will be integrated in the health care operations in aneffort to enhance quality as well as efficiency in delivering healthservices.

Conclusion

Thehealth care sector is among the single largest items in the nationalbudget. This has called for the development of different strategiesthat can help the stakeholders in addressing the challenges (such asmedical errors and an increase in demand for health services)affecting this sector without resulting in a disproportionateincrease in the cost of delivering care in the future. Some of thekey strategies have focused on the use of the latest technology andnew financial mechanisms.

References

AlignAmerica (2015). Obamacare’sfunding: Where the money comes from and where it goes?Covington, KY: Align America.

Centerfor Disease Control (2015). Healthinsurance coverage.Washington, DC: CDC.

Chernew,M. (2009). Impactof the economy on health care.Princeton: Robert Wood Johnson Foundation.

NationalConference of State Legislatures (2015). Healthfinance issues.Washington, DC: NCSL.

Smith,P. (2014). How has health care changed in the last 10 years? CareerGlider.Retrieved December 12, 2015, fromhttp://www.careerglider.com/blog/healthcare-changed-last-10-years/

Vitalari,P. (2014). Aprospective analysis of the future of the U.S. health care industry.Irvine, CA: University of California.

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