Financing of Health Care

With coinciding concerns about health care costs and the imperative to improve quality of care, health care providers and others face difficult decisions in the effort to achieve an appropriate balance. Such decisions often are addressed in the policy arena. How do policymakers evaluate which health care services should be financed through government programs? How do ethics-related questions and other considerations play into this evaluation process? Is it possible to contain costs and provide accessible, high-quality care to all, or is the tension between cost and care inherent in the U.S. health care delivery system? These questions are central to health care financing decisions in the United States.

For this Discussion, you will focus on the policy decision-making process that determines what types of care are covered by public and private insurers and the ethical aspects of such financial decisions.

To prepare:

• Read the following case study, “Hard Economic and Finance Choices in US Healthcare” (Milstead):
  • Case Study 1: Hard Economic and Finance Choices in US Healthcare 
    
    Applied economics is all about managing scarce resources. Economics is an amoral field of study: it is neither moral nor immoral. Morality and values are determined by individuals at the personal level and by group consensus or majority opinion at the national level. State and federal governments determine the ‘will of the people’ about how to use scarce resources for the good of a nation. 
    
    The U.S. health care system is an exemplar of scarcity: primary care physicians, substance abuse treatment centers, trauma centers, registered nurses, and the money to pay for goods and services. Finance is all about how to pay for goods and services. The Medicare Payment Advisory Commission (MedPAC) is appointed by the Executive branch of the federal government to make decisions about what the Medicare program will and will not pay for. In this role, MedPAC makes decisions about medications, procedures and treatments. Examples of MedPAC decisions include coverage for left ventricular assistive devices as a destination therapy, coverage for bariatric surgery, and in 2010, coverage of the drug Provenge™. By law, MedPAC is not allowed to use price or cost of any treatment in its decision-making processes.
• Review the information in the Washington Post article “Review of Prostate Cancer Drugs Provenge Renews Medical Cost-Benefit Debate” in the Learning Resources.
• Consider how policy decisions currently are made about what will and will not be paid for and what changes, if any, could improve the process.
• Reflect on how the Washington Post example illustrates the tension between cost and care.