cost shifting and cost containment

US Health Policy : Cost Containment and Cost Shifting

America 's health policy struggled to get widespread achievements of "managed care " in the past twenty years . Health care standards need to be redefined for it to cover the provision of medical services alone . As broader threats to health , such as lead poisoning , stress and lack of housing , as well as rehabilitative strategies and long-term care , a new system need to be developed . With this , the US health care naturally faced crises that it is unequipped to handle

In the 1990s , Mckenzie (1994 ) identified that

as the tuberculosis epidemic reemerged , it exposed not only the inadequacy of the health care system but the limitations of the current debate on health care reform . The re-emergence and flourishing of this nineteenth-century disease is only the latest wave of health disasters to batter a population increasingly lacking in housing , employment and public and primary health care . This meant that more and more people lack the basic human services essential for a community 's well-being . The health-care debate ignores the fact that the public and primary health care infrastructure , which could be expected to treat TB patients , has been dismantled and abandoned , or increasingly replaced by managed-care cost containment programs

This prompted President Bill Clinton 's 1994 health care proposal (which never passed ) that called for government regulation of health care costs . Unlike the process in most nations , the President 's plan would have attempted to control financing not by limiting tax rates but rather through government regulation of premiums paid to private health insurance plans (Starr and Zelman , 1993

Insurance companies claim they have saved employer groups and individual subscribers much money with their "managed-care packages management consulting firms and third-party administrators have proliferated to help insurance companies and self-insured employers deal with hospitals and doctors conferences and workshops have taught the methods . America was said to have created a "new managed-care environment " superseding the bad old system

While not the only vehicle for containing the rising cost of health care , prospective payment is one of the first and most powerful . It is also something of a paradigm of the way in which many cost containment mechanisms work . Currently applied only to hospitals , federal Diagnosis Related Groups (DRGs ) do not directly affect physicians , who are ostensibly left free to practice medicine as they see fit . Similarly other mechanisms such as utilization review often impinge directly upon people other than the physician--by restricting patients ' reimbursement for example--while leaving intact the physician 's clinical freedom (Morreim , 1988

Controlling prices has produced some limited success at restraining the growth of overall health care expenditures . The slower rate of increase in physician costs in Canada compared with that of the United States has been attributed to the regulation of physician fees in Canada (Welch et al , 1996 . In the US , states with either highly regulated or highly competitive approaches to controlling the prices of hospital services have experienced slower rates of overall hospital cost inflation than states with neither...