Wk 3- Health Care Cost Discussion Summary

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1 Health Care Cost Discussion Summary Kirsten Mestayer, Tee Chester, Jacqueline Burns, Heather Smith, Eva Cruz, Karen Gonzales University of Phoenix MHA 598 Instructor: Dianna Iobst 8/1/2023

2 1. Kirsten Mestayer Discussion According to “A Dozen Facts About the Economic of the US Health-Care System,” written by Ryan Nunn, Jana Parsons, and Jay Shambaugh, most of the spending in the health care industry is used on professional services, a quarter of spending, and hospitals, a third of the spending. Home health, nursing homes, and long-term care facilities take up 13% of health care spending, prescriptions take up 9% and insurance uses 7%. By reducing unnecessary services and increasing labor supply, the cost of labor would decrease. The cost of labor takes up majority of healthcare costs instead of investment in capital, the article stated. From my point of view, health care spending is high due to the new and more complex forms of technology that providers are inventing and using. These expensive electronics can allow prescribers and hospitals to charge more for procedures. Another issue the economy faces is a large percentage of the world or uninsured and use state funding, such as Medicaid and Medicare. This causes the cost of other insurances and taxes to rise, which hurts the other portion of the world (Nunn et al., 2020). A strategy I would suggest would be allowing us to take a step back from technology and take on some of the older ways of doing things. Keeping and electronic medical record system would benefit us by things being less time consuming and more organized, but there are somethings that can be cut, such as medications and bringing back the natural forms of medicine. Someone people would disagree with this, but I feel like sometimes a more natural medication is a better option and less toxic. I also would suggest having one massive company to distribute medical supplies. If we cut out competition in supplies, price gouging would lower and health

3 care would stabilize, making everyone more equal verses more competitive. I believe if the article would have been written post COVID pandemic, many facts would change. References: Nunn, R., Parsons, J., & Shambaugh, J. (2020, March 10). A dozen facts about the economy of the US health-care system . The Hamilton Project. https://www.brookings.edu/articles/a- dozen-facts-about-the-economics-of-the-u-s-health-care-system/ Responses Tee Chester Good Evening, I possess limited knowledge regarding the health care industry; however, I concur with the notion that a significant portion of expenditure within this sector is allocated towards professional services, accounting for approximately 25% of total spending, and hospitals, which represent approximately one-third of the expenditure. Moreover, I acknowledge your perspective that the high levels of health care spending can be attributed to the development and utilization of novel and intricate technological advancements by providers. Based on my research findings, it has been reported by the Brookings Institute in 2020 that a multitude of economic issues were identified as contributors to the elevated expenses associated with healthcare. Moreover, a significant proportion of healthcare expenditures can be attributed to inpatient care and professional services. According to Nunn (2020), the reduction of labor expenses cannot be achieved solely through capital investments, but rather requires a confluence of factors such as an increase in the labor supply, stringent limitations on nonphysician roles, and the elimination of unneeded services.

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4 Reference: Nunn, R., Parsons, J., & Shambaugh, J. (2020, March 10). A dozen facts about the economics of the US health-care system. Brookings Institute. https://www.brookings.edu/research/a- dozen-facts-about-the-economics-of-the-u-s-health-care-system/ Heather Smith Kirsten, I do see your point on reducing companies in regard to healthcare supplies and having just one massive company, however, it does come with extreme consequences. Natural disasters and COVID for example could take out that one manufacturer and then there would be a significant problem. In 2017, Hurricane Maria devastated Puerto Rico. It also took out Baxter Healthcare and other companies that manufacture most of the United States supply of saline (Becze, 2017). This catastrophic event led to significant changes in the use of saline. Instead of giving meds via IV piggyback, many had to resort to an IV push method. This problem was made worse by the influenza cases of 2018 and the increased demand. The same thing happened when COVID shut down many manufacturers of products. Can't put all of our eggs in just one basket but it would be great if we could. Reference: Becze, E. (2017, November 16). Yes, there's a saline shortage, but here's what you can do about it . ONS Voice. https://voice.ons.org/news-and-views/yes-theres-a-saline-shortage-but- heres-what-you-can-do-about-it Jacqueline Burns

5 Hi Kirsten, I embrace the idea of introducing and educating the community about the "choice" of natural medication which has been proven effective and less costly. I personally enjoyed acupuncture and meditation which was very effective when I was experiencing migraines. Please note results from a study below. Complementary medical practices evaluated included acupuncture, homeopathy, tai chi, meditation, reflexology, hydrotherapy, naturopathy, and massage. Patients were enrolled in either the Western medicine group or the Complementary Alternative Group. Patients were not randomized between the two treatment groups, but they were matched by disease pathology and severity, age, and sex. Furthermore, selected patients had completed at least one year in the health system, as the investigators reasoned that this would enable them to evaluate their follow- up. Overall, the investigators found that complementary medicine was between 53 and 63 percent less expensive than conventional medicine for achieving equivalent levels of effectiveness. Complementary medicine was especially cost-effective for osteoarthritis, hypertension, facial paralysis, and peptic ulcers. (Debas et al., n.d.). Reference: Debas, H. T., Laxminarayan, R., & Straus, S. E. (n.d.). Chapter 69Complementary and Alternative Medicine. National Library of Medicine . https://www.ncbi.nlm.nih.gov/books/NBK11796/#:~:text=Overall%2C%20the %20investigators%20found%20that,facial%20paralysis%2C%20and%20peptic %20ulcers. Eva Gutierrez Cruz

6 Hi Kirsten, It looks like there is not much to add since everything was already said but I do agree with you that having the option of natural medicine for patients instead of the usual prescription drugs can not only benefit the health of the patient but the hospital monetary wise as well. Also, that is great idea to have all medicine under one company. Not only would it make things much cheaper but make getting medicine much easier for both the patient and the hospital. Great job! Final Summary According to “A Dozen Facts About the Economic of the US Health-Care System,” written by Ryan Nunn, Jana Parsons, and Jay Shambaugh, most of the spending in the health care industry is used on professional services, a quarter of spending, and hospitals, a third of the spending. Home health, nursing homes, and long-term care facilities take up 13% of health care spending, prescriptions take up 9% and insurance uses 7%. By reducing unnecessary services and increasing labor supply, the cost of labor would decrease. The cost of labor takes up majority of healthcare costs instead of investment in capital, the article stated. From my point of view, health care spending is high due to the new and more complex forms of technology that providers are inventing and using. These expensive electronics can allow prescribers and hospitals to charge more for procedures. Another issue the economy faces is a large percentage of the world or uninsured and use state funding, such as Medicaid and Medicare. This causes the cost of other insurances and taxes to rise, which hurts the other portion of the world (Nunn,2020). A strategy I would suggest would be allowing us to take a step back from technology and take on some of the older ways of doing things. Keeping an electronic medical record system

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7 would benefit us by things being less time consuming and more organized, but there are somethings that can be cut, such as medications and bringing back the natural forms of medicine. Someone people would disagree with this, but I feel like sometimes a more natural medication is a better option and less toxic. I also would suggest having one massive company to distribute medical supplies. If we cut out competition in supplies, price gouging would lower and health care would stabilize, making everyone more equal verses more competitive. I believe if the article would have been written post COVID pandemic, many facts would change. During the discussion taken place among classmates, many areas have been suggested when it comes to the strategies presented. When discussing the limitation of competition in certain parts of the market, the example of the saline shortage in 2017 due to Hurricane Maria in Puerto Rico and the COVID pandemic were presented due to the cause of manufacturing shutting down. It was also brought to attention that the suggestion of the United States taking on more of a natural form of medication verses all the chemicals ingested in people’s bodies would be a great way of reducing cost within the United States (Becze,2017). Based on the suggestions presented by classmates, changes would be made to the idea of cutting out competition. Cutting out competition could do more harm that good throughout the world. According to the National Library of Medicine, very early on in the COVID-19 pandemic, a shortage of medical supplies, such as gowns, masks, gloves, and respirators cause a severe panic within the world. If we cut out competitors for things such as medical supplies, it can cause more people to die and be infected when something like a pandemic occurs (Bown,2022). Reference:

8 Becze, E. (2017, November 16). Yes, there's a saline shortage, but here's what you can do about it . ONS Voice. https://voice.ons.org/news-and-views/yes-theres-a-saline-shortage-but- heres-what-you-can-do-about-it Nunn, R., Parsons, J., & Shambaugh, J. (2020, March 10). A dozen facts about the economy of the US health-care system . The Hamilton Project. https://www.brookings.edu/articles/a- dozen-facts-about-the-economics-of-the-u-s-health-care-system/ Bown C. P. (2022). How COVID‐19 Medical Supply Shortages Led to Extraordinary Trade and Industrial Policy. Asian Economic Policy Review , 17 (1), 114–135. https://doi.org/10.1111/aepr.12359 2. Tee Chester Discussion According to the 2019 ACS, 14% of all jobs are in the health care sector (Laughlin, 2021). but also has a sizable impact on the country's GDP (by a factor of 18.3%). It is essential to prioritize the expansion and improvement of health care services to maintain economic stability and ensure the wellbeing of the population as the NHE continues to grow rapidly, with an average of $4.3 trillion, and this is only within 2021. A large portion of the population cannot afford necessary medical treatments or preventive care due to affordability. This affects health outcomes, long-term productivity, and economic growth. Thus, affordable health care and universal access are essential for individual well-being and the U.S. economy. According to a report from the Brookings Institute in the year 2020, the high cost of healthcare can be attributed to a dozen different economic factors. And third, hospitals and doctors' offices take up the lion's share of healthcare spending. Although capital expenditures help, "severe restrictions as to

9 what nonphysicians are permitted to do, and reductions in unnecessary services" are also required to bring down labor costs (Nunn, 2020). The shortage of doctors and other medical staff ranks as the eleventh problem . Many hospitals are unwilling to offer residency programs without government funding, limiting this supply (Nunn, 2020) Professional services are driving up healthcare labor costs. I propose two solutions: We must train tomorrow's doctors to address the physician shortage. Since the government spends trillions on health care, more residents becoming doctors would reduce the physician shortage and labor costs. Second, we should establish nationwide certification and licensing requirements so that all medical practitioners and nonphysicians are adequately trained and can perform within a standard scope of care. Nonphysicians could help physicians sign off on more simple daily tasks and procedures with proper training. This would reduce state-based restrictions on nonphysicians and lower labor costs. Reference: Laughlin, L., Anderson, A., Martinez, A., & Gayfield, A. (2021, April 5). 22 million Employed in Health Care Fight Against COVID-19. United States Census Bureau. https://www.census.gov/library/stories/2021/04/who-are-our-health-care-workers.html Nunn, R., Parsons, J., & Shambaugh, J. (2020, March 10). A dozen facts about the economics of the US health-care system. Brookings Institute. https://www.brookings.edu/research/a- dozen-facts-about-the-economics-of-the-u-s-health-care-system/ Centers for Medicare and Medicaid Services. (2023). NHE Fact Sheet. https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/ nationalhealthexpenddata/nhe-factsheet

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10 Responses Kirsten Mestayer Good Morning, The growth of the health care industry plays a huge role in our quality of care. I completely agree that because a big part of society cannot afford health care or insurance, it will affect the progress or expansion of health care in the years to come. I also read in “A Dozen Facts About the Economic of the US Health-Care System,” that hospitals and professional services take up the highest portion of health care costs. I would agree with hospitals, because they provide everything from food to medications to hospitality features. They have to higher way more staff to handle all the different duties needed. What I don't understand is why would professional services come next? My belief would be that long-term care facilities and nursing homes would take up the next portion of health care spending because they provide some of the similar services that hospitals do. They also need extra staffing and appropriate services, such as physical and speech therapy for their clients. I am curious to learn more on why professional services follow hospitals (Nunn et al., 2020). Reference: Nunn, R., Parsons, J., & Shambaugh, J. (2020, March 10). A dozen facts about the economy of the US health-care system . The Hamilton Project. https://www.brookings.edu/articles/a- dozen-facts-about-the-economics-of-the-u-s-health-care-system/ Heather Smith Hi Tee,

11 Our local community literally, "grows its own" physicians. Our hospital pays for the physician to go to school, they are normally, local kids, and once they have graduated and completed their residency program, they come back to our small community and agree to work 4 years in the area of their specialty. This has helped our facility and community to maintain physicians. However, if the spouse does not like a small rural area, they typically leave early and have to payback their remaining debt. Another program that our Federally Qualified Healthcare Clinic (FQHC) uses, if residents agree to go to a small rural area for a 5 year contract, their student debt is forgiven by the government. This allows many rural areas that would not normally have a local provider, to have access. We typically see pediatricians come through our clinic and it has been amazing and beneficial to our local area. Jacqueline Burns Hi Tee, Interesting suggestion with respect to non-physicians. Please review the following which I thought was very interesting. Personally, I know a couple of people that want to be in the health field and have opted for a non-physician profession for various reasons. Studies of physician/non-physician health care professional substitution ratios show four non-physician health care professionals can replace two to three physicians. The addition of a non-physician health care professional to a physician office results in an average increase of approximately 40 to 50 percent in total office visits. Total cost savings when a non-physician health care professional replaces a physician is more than $34,000 a year. An analysis of several studies demonstrates that the substitution of non-physician health care professionals results in a significant cost savings. Cost-effectiveness of non-physician health care professionals, 1984).

12 Reference: Cost-effectiveness of non-physician health care professionals. (1984). National Library of Medicine . https://pubmed.ncbi.nlm.nih.gov/6149509/ Eva Gutierrez Cruz Hi Tee, I believe everything that needed to be said has been said, but the idea of having certifications and licensing for physicians and non-physicians is actually a great idea. I work in a clinic where the doctor does the procedures and the nurse practitioners handle the new patient visits, with the follow ups as well and can evaluate the patient and send out prescriptions. It helps run the clinic much smoother and faster, as our clinic is a high volume clinic with only one doctor. Great job! Final Summary After being able to review: A Dozen Facts About the Economics of the US Health-Care System yielded an interesting difference in comparison to prior experiences. Following extensive deliberation, the group generated many recommendations and remarks about healthcare expenses and the significance of non-physician personnel. Nevertheless, a prevailing theme emerged, wherein the proposals for improving training and tackling nationwide apprehensions regarding healthcare quality revolved around professional services and administrative functions. Additionally, the discussion highlighted the need for further research on the long-term effectiveness and potential side effects of natural treatments compared to conventional ones. Understanding these differences is crucial for patients and healthcare providers to make informed decisions about the most suitable treatment options. Furthermore, exploring alternative therapies

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13 may also open new avenues for cost-effective and personalized healthcare solutions in the future. One of the tactics employed involves teaching medical professionals to recognize the existence of a deficit in physicians, while establishing a dependable recruitment process emerges as the foremost measure to effectively manage and mitigate labor expenditures. The identification and recruitment of competent employees is of utmost importance. Just checking off a list of qualifications is not enough when hiring. Individuals and organizations align when they share values, attitudes, expectations, and ethics. These traits must match the companies to succeed. Hospitals must spend 60% of their operating budget on HR management to manage and retain top talent. Financial Stability New Year's Resolutions (Healthcare Labor Management: Optimizing Resources Lowers Costs 2019). Some of the ideas we discussed as a group are ones I plan to incorporate more fully into my own strategies. I’d devote more time to determining how to implement the strategies that have been proposed, such as analyzing hospitals and professional service providers, studying physician/non-physician substitution ratios, developing a system to help patients learn about costs and compare those costs across providers, investigating ways to reduce the price of pharmaceuticals and medical equipment, and maintaining current certifications. Several promising strategies to reduce healthcare costs in the United States were developed as a result of participants exchanging ideas. References: Healthcare Labor Management: Optimizing Resources Lowers Costs. (2019, August 22). Retrieved October 13, 2020, from

14 https://www.healthcatalyst.com/success_stories/healthcare-labor-management-hawaii- pacific-health Davis, C. (2010, March 15). Labor costs are key driver of hospital cost growth. Retrieved October 13, 2020, from https://www.fiercehealthcare.com/healthcare/labor-costs-are-key- driver-hospital-cost-growth 3. Jacqueline Burns Discussion Reviewed " A Dozen Facts About the Economics of the US Health Care System and analyzed the high cost of health care in the United States. Aging of the population has contributed to the increase in spending of US Health care. United States spends $18,100 on personal health care for an average person 65 to 84 years old and $35,000 on an average person 85 or older, while only spending $4,000 on an average person 18 or younger. Roughly a third of all health-care spending goes to hospital care, making clear that the functioning of the U.S. hospital system is crucially important when health-care expenditures are considered. Professional services make up roughly a quarter of spending. (Professional services are those provided by physicians and nonphysicians outside of a hospital setting, including dental services.) The combination of long-term care, nursing care facilities, and home health care account for 13 percent of total health expenditures. Prescription drugs are next at 9 percent, and net health insurance costs (i.e., premiums earned less benefits paid) account for 7 percent of total spending. Because prescription drugs are an ongoing expense for many and given the immediate and direct health impact that often results from a lack of access, the costs of prescription drugs

15 can dominate health-care cost discussions. However, for individuals (and especially for the system as a whole), the expense of professional services is much larger. Administrative health-care costs are higher as a share of GDP in the United States than in other countries. These administrative (i.e., nonclinical) costs take several forms: claims processing and payment, prior authorization and eligibility determinations, and quality measurement, among others. While a certain amount of this administrative expense is inevitable and necessary for a well-functioning system, public or private, the excess of U.S. costs over those of other advanced economies is part of the explanation for high U.S. health-care costs overall. (Nunn et al., 2020). One of my general strategies to lower the costs of health care overall in the US is geared toward education and knowledge with respect to promoting good health practices. Good health= lower health care costs. Addressing high administrative costs would include a deep dive root analysis approach consisting of reviewing how payments are processed, hiring of staff, and implementing the proposal of streamlining the billing and claims process. Educating consumers on generic drugs vs. brand drugs is key towards decreasing the cost of prescriptions. Reference: Nunn, R., Parsons, J., & Shambaugh, J. (2020, March 10). A dozen facts about the economy of the US health-care system . The Hamilton Project. https://www.brookings.edu/articles/a- dozen-facts-about-the-economics-of-the-u-s-health-care-system/ Responses Kirsten Mestayer

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16 Good Afternoon, In my reply to Tee, I discussed my confusion on why professional care would take up more spending than long-term care and nursing homes. I would have assumed they offer more services for their clients, which to me would make them higher on the spending charts, even though 90% of their clients are Medicare and Medicaid. The article we read would probably be so different now that the COVID pandemic has happened, although hospitals will definitely still be number one on the spending chart. Reference: Nunn, R., Parsons, J., & Shambaugh, J. (2020, March 10). A dozen facts about the economy of the US health-care system . The Hamilton Project. https://www.brookings.edu/articles/a- dozen-facts-about-the-economics-of-the-u-s-health-care-system/ Tee Chester Hello, My apologies I did not see your post as I reviewed what you wrote: I have encountered a perplexity regarding the disparity in expenditure between professional care and long-term care facilities, particularly nursing homes. Despite my own attempt to elucidate this matter through a previous post, I remain puzzled. It is conceivable that professional care providers are perceived as offering a broader range of services to their clientele, thereby justifying their higher placement on the expenditure hierarchy, even though a significant proportion of their clients, approximately 90%, are beneficiaries of Medicare and Medicaid. The article under consideration would likely exhibit significant differences considering the COVID-19 pandemic, albeit with hospitals continuing to occupy a prominent position on the expenditure hierarchy.

17 Eva Gutierrez Cruz Hi Jacqueline, We have similar strategies when it comes to reducing health care costs. My idea was about the same, just reviewing the hospital as a whole and seeing what prices can be reduced and where money can be invested to ensure that our prices are not too high. Great job! Final Summary Review of "A Dozen Facts About the Economics of the US Health-Care System” sparked an interesting discussion in reference to various ideas and feedback from the group with respect to health care costs. Professional services in addition to administrative services were a common theme in which strategies to incorporate additional training in addition to addressing nationwide certification and licensing requirements were suggested. Interesting topics included the idea of natural medication vs. conventional and the various types of transportation that are provided to a patient that can contribute to a potential unaffordable, unnecessary high cost. The discussion of outpatient procedures stood out as the costs related to the services can vary based on the facility setting, insured or uninsured, and location. One of my general strategies to lower the costs of health care overall in the US is geared toward education and knowledge with respect to promoting good health practices. Good health= lower health care costs. Research suggests that better-informed patients can lead to reduced hospitalizations and medical costs. Investigators studied five years of clinical and economic outcomes data for 1,800 patients insured through their employers. They found that when the employees participated in a web-based health literacy program, hospitalizations dropped by 32%, emergency department (ED) visits were down 14%, and overall costs declined 11%, says Jeffrey

18 C. Greene, chief executive officer and founder of MedEncentive in Oklahoma City. (Better Patient Education Can Lead to Lower Medical Costs, 2020). Addressing high administrative costs would include a deep dive root analysis approach consisting of reviewing how payments are processed, hiring of staff, and implementing the proposal of streamlining the billing and claims process. Educating consumers on generic drugs vs. brand drugs is key towards decreasing the cost of prescriptions. The feedback received from the group was in reference to the high costs of professional services compared to the long-term care and nursing homes. An opinion was presented that the article would be different if it was written after COVID. Additional feedback in reference to the same topic perceived professional services higher in costs due to the broader range of services. No changes were made to the proposal. Appreciate constructive feedback. Reference: Better Patient Education Can Lead to Lower Medical Costs. (2020). Relias Media . https://www.reliasmedia.com/articles/147129-better-patient-education-can-lead- to-lower-medicalcosts#:~:text=Focus%20on%20health%20literacy&text=Research %20suggests%20that%20better%2Dinformed,reduced%20hospitalizations%20and %20medical%20costs 4. Karen Gonzalez Discussion One of the key sectors boosting the American economy is the health care sector.

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19 The health care sector employs 14% of all American workers, according to the 2019 American Community Survey (ACS) from the Census Bureau (Laughlin, 2021). According to the Centers for Medicare and Medicaid Services in 2023, the National Health Expenditure (NHE) as of 2021 is anticipated to be $4.3 trillion, or 18.3% of the Gross Domestic Product (GDP). Given the importance of the health care sector to not only our economy but also to life itself, it is crucial that we work to make health care as accessible as we can. Unfortunately, the price of healthcare is one of the obstacles to accessibility. In 2020, the Brookings Institute released a report outlining twelve facts about the health care system's economics and the reasons it is so expensive. The third fact asserts that "hospitals and professional services account for the majority of health care spending." A decrease in labor costs would necessitate "some combination of increased labor supply, fewer restrictions on what non physicians are permitted to do, and reductions in unnecessary services" (Nunn, 2020). Labor costs made up most of the cost of professional services rather than capital investments. It is mentioned in point eleven that the physician labor supply is severely constrained. Due to hospitals' reluctance to offer residencies without a government subsidy, there aren't many resident jobs accessible, which is one constraint on this supply (Nunn, 2020) I believe that two measures are necessary to reduce the excessive labor expenses that professional services are placing on the healthcare system: To reduce the physician shortage, we should first support the educational requirements of our aspiring medical professionals. Given that there is such a high demand for doctors and that the government already spends trillions of dollars on healthcare, why not concentrate our efforts and resources on helping more residents complete the requirements to become doctors, which would help alleviate the national physician shortage and lower labor costs? Second, I believe that certification and licensing standards

20 should be established nationally to ensure that all medical professionals and non-physicians are appropriately trained and capable of operating within a standard scope of treatment. Non-physicians should ideally be able to assist with more of the routine, everyday chores, and procedures that doctors are obliged to approve if they have received the proper training in those areas. Due to less constraints, the previously mentioned labor costs would be reduced for non-physicians in accordance with their states. Responses Kirsten Mestayer Good Afternoon, Great job pulling in spending and employment facts from other sites. It is good to know those things when reading the article assigned. Helping our residents would definitely benefit the physician shortage in the world. Completing residency is a very hard and expensive thing to do. Before joining this University, I was enrolled in another university trying to get my RN license. I completed all the courses, but when it got down to completing clinicals, I had to back out. Clinicals are not designed for single moms that must work a full-time job to support their children. Clinicals are a full-time job. Making programs like this easier for the working class would help in so many ways. Tee Chester Hello, I concur with Kristen's viewpoint that you have effectively incorporated pertinent data on expenditure and employment statistics from external sources. Familiarity with the concepts is

21 advantageous when engaging with the assigned article. Assisting our inhabitants would undeniably yield advantages in addressing the global scarcity of physicians. The completion of a medical residency program is a challenging and financially burdensome endeavor. As, well as you also stated that Clinical rotations are not optimally tailored to accommodate the needs of single mothers who are required to maintain full-time employment to provide financial support for their children. Clinical rotations require a significant time commitment, akin to that of a full- time occupation. Facilitating the accessibility of such programs for the working class would yield numerous benefits. Jacqueline Burns Hi Karen, Great post in reference to the cost of educational requirements along with continuing education and licensing standards. This brings me to the discussion of medical malpractice and its annual cost and how it relates to the lack of medical personnel current training/licensing. Please review information below in reference to medical malpractice and healthcare costs. Physicians and other healthcare providers have long argued that malpractice claims are a leading cause of escalating healthcare costs. The worry is that as malpractice legal suits become more commonplace, and claimants receive settlements for millions of dollars, patients will have to swallow some of these costs through higher insurance premiums and doctor’s fees. (Malpractice and Its Effects on the Healthcare Industry, 2022).

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22 Malpractice and Its Effects on the Healthcare Industry. (2022, November 23). Texas A & M University . https://online.tamucc.edu/degrees/business/mba/healthcare-administration/ malpractice-and-its-effects-on-the-healthcare-industry/ Eva Gutierrez Cruz Hi Karen, You did a great job with your detailing in your research. I agree with you that taking that extra money and helping residents get that extra push to help them become doctors will help with the physician shortage. It will also encourage others to pursue their dreams of becoming doctors and not be discouraged with how competitive it can be. Great job! Final Summary 5. Eva Gutierrez Cruz Discussion There are many factors to consider why the cost of basic health care is consistently rising. One reason that really stands out to me is the cost of outpatient procedures. Not only does the United States have very high prices for prescription drugs, but we also have higher prices for outpatient procedures such as colonoscopies, MRIs etc. “For example, a hip replacement surgery costs between 21 percent (Holland) and 64 percent (Australia) of the average price in the United States.[14] These patterns are consistent with research showing that high U.S. prices are an important part of high U.S. spending on health care (Papanicolas, Woskie, and Jha 2018).[15] (Nunn et al., 2010).” According to the article a dozen facts about the economics of the US health-care system, these higher prices are underlying concerns Nunn et al. (2010). They can

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23 reflect payments to the health care system that are above what a normal rate of profit is. They are driven by market imperfections, and it contributes to the high United States prices. A strategy that I propose would mainly start with the hospital as a whole and just lower the prices for the cost of services. Hospitals have become such a big profit organization that they are more focused on the money that they are pocketing, and not focusing on their quality of care for their patients. Hospitals have not been ensuring that these patients can afford health care, but they are more focused on billing and making sure that they are being paid. According to the article, most other developed countries have controlled costs and it consist of the government playing a stronger role with negotiating prices for health care. What it looks like is that United States is missing political support when it comes to health care prices, like the other countries have and can ensure that their patients are receiving affordable health care. Reference: Nunn, R., Parsons, J., & Shambaugh, J. (2010, March 10). A dozen facts about the economics of the US health-care system. Brookings. https://www.brookings.edu/articles/a-dozen-facts- about-the-economics-of-the-u-s-health-care-system/ Responses Tee Chester Hello Eva Great Point-It is noteworthy that market imperfections play a significant role in the reported higher costs in the United States. The proposed methodology essentially entails the implementation of a comprehensive approach that centers on the reduction of costs connected with hospital services. Hospitals have experienced a notable shift towards being profit-oriented

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24 entities, placing a greater emphasis on financial advantages rather than the delivery of exceptional patient care. Hospitals have exhibited a tendency to prioritize billing and payment over the assurance of healthcare affordability for individuals. Regarding the report, it can be observed that a significant number of other developed nations have successfully addressed healthcare expenditure by augmenting government participation in the process of negotiating healthcare prices. The United States seems to lack sufficient political support in effectively addressing the issue of health care prices, in contrast to other nations that have established procedures to ensure affordable health care for their populations. Jacqueline Burns Hi Eva, Unfortunate that health care cost is extremely high in the US. Good point in reference to pointing out the high cost of outpatient procedures. I find this very interesting as outpatient procedures such as colonoscopies are considered preventive or diagnostic and various factors affect the cost which include facility setting, insured or uninsured and location. Please note the following which I found to be very interesting that affect the cost of a procedure.  Facility setting — Where you have your medical procedure done affects the cost. Having a colonoscopy done in a hospital as an inpatient costs far more than having the same procedure done in an outpatient center. Since inpatient facilities tend to cost more to run, patients end up paying more for care.  Insured or uninsured — The price of a colonoscopy can vary between insurance providers. The change in price largely depends on how much of the procedure your

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25 insurance plan covers if any at all. If you don’t have health insurance , you can expect to pay the full cost of the procedure out-of-pocket.  Location — The region, state, and even the city you live in can affect the cost of your medical procedure. If you live in a rural area with fewer facilities to choose from, you can expect to pay more than you would if you lived in a city with many providers. Traveling for a medical procedure can be a great money-saving option. Reference: Vanvuren, C. (n.d.). How much does a colonoscopy cost? New Choice Health . https://www.newchoicehealth.com/colonoscopy/cost Kirsten Mestayer Good Morning, Great valid point about outpatient procedures costing more in the United States than it does in other countries. One thing I can agree with is that not only hospitals, but all the healthcare industry are more focused more on a profit that the receive than the quality of care they provide to the patients. This has caused a lot of things to change even the quality of equipment. Since COVID 19, the quality and care have decreased tremendously throughout the United States, and it has harmed everyone more than helped. Most places were so overwhelmed with needing to provide care that it made the quality horrible. References: Tuczyńska, M., Staszewski, R., Matthews-Kozanecka, M., Żok, A., & Baum, E. (2022). Quality of the Healthcare Services During COVID-19 Pandemic in Selected European

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26 Countries. Frontiers in public health , 10 , 870314. https://doi.org/10.3389/fpubh.2022.870314 Final Summary My strategy to help reduce the costs of health care was just a simple reduction of prices. Outpatient procedures have gotten to such high prices, making patients uneasy of whether they want to have a simple procedure done or not. Another reason why healthcare prices are rising is because of how high prescriptions drugs are as well. It would start off with looking at outpatient procedures and seeing where cuts can be made but still ensure that the safety and care for patients are at a high priority. When comparing to other countries, it can be seen that the same outpatient procedure in other countries is much cheaper and still have the same quality of care for their patients. My group offered amazing feedback and with their help I was able to piece my strategy together. The feedback that I received helped emphasize how hospitals and health care facilities have been more focused on the profits and not the quality of care to the patients. A classmate even stated that some of these prices can stem from when COVID-19 began. That same classmate stated that quality of care has gone down since the start of COVID-19 and has more damage than helped. Another classmate stated that the location of where you live, whether you are insured or uninsured, and the location of where the procedure will be done at, will affect the prices of health care costs. Another classmate stated that the market imperfections play a significant role in the higher health care costs in the United States. The changes that I would make would be to focus solely on where to lower the costs from. Studies have shown that prices for outpatient procedures also vary from facility to facility, as

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27 well as location to location. “The region, state, and even the city you live in can affect the cost of your medical procedure. If you live in a rural area with fewer facilities to choose from, you can expect to pay more than you would if you lived in a city with many providers (Vanvuren, n.d.).” Focusing on facilities and location for patients and cutting down on prices for outpatient procedures, can be a start. From there, it can move to bigger hospitals and see how well they do with cutting the prices, and not just focus on making profits. References: Vanvuren, C. (n.d.). How much does a colonoscopy cost? New Choice Health. https://www.newchoicehealth.com/colonoscopy/cost Nunn, R., Parsons, J., & Shambaugh, J. (2010, March 10). A dozen facts about the economics of the US health-care system. Brookings. https://www.brookings.edu/articles/a-dozen-facts- about-the-economics-of-the-u-s-health-care-system/ 6. Heather Smith Discussion While analyzing the causes of the high cost of healthcare in the United States in the “A Dozen Facts About the Economics of the US Health-Care System,” a specific one hit close to home. The share of visits leading to a potential surprise out-of-network bill, by type of service hit hard and close to home. “The surprise billing is very common when patients use ambulance services (51-69 percent)” (Nunn et al., 2022). 69% of surprise billing came from air ambulance services and 51% of surprise billing came from ground ambulances. This is significant due to

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28 once the patient receives that bill, they have so many questions. They want to know why their transportation was a helicopter. Unfortunately, it’s due to a decrease in credentialed staffing and budgets within the local EMS system. Local EMS/ambulance services are allowed to make significant decisions on site and determine if they can take the patient via an ambulance from their home to the nearest facility which in our local area max time is 30 miles from the lake. If they decide to call the helicopter, the patient believes they are sending them via the best way. However, it’s not always the case. The medics are making choices based on “what time they get off” or misleading information given to them at the scene. They should use their skills and knowledge to assess the patient to make the best clinical decision for the patient, not for their own interest. Examples include a teacher passing out at the local school with minimal symptoms, the local ambulance services make the call to the local helicopter service and have her transferred to Tallahassee Memorial Hospital. Absolutely nothing found during her work-up and was discharged from that facility only to have to figure out how to get home from a facility 60 miles away from home. She also now has a $30,000 bill just for air transportation. She could have easily been transferred 2 miles via ambulance to the local Emergency Department to receive the same work-up and be able to call her friends or family to come pick her up at discharge. A strategy to lower the cost of healthcare would include extra continued education to the EMS staff on what constitutes the proper use of air travel versus ground travel. Medical facilities and local EMS services should consider continuing education in the local area along with the local Emergency Department physicians to determine if a patient requires ground versus air travel. This would save a tremendous amount of surprise billing to the patient. In the local area that we live in, in Southwest Georgia which neighbors Alabama and Florida, many insurance

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29 companies do not cover the cost of out of state travel especially via air ambulance which then imposes the surprise billing to the patient. Education and communication with local EMS and providers could significantly reduce the surprise billing costs of healthcare to the patients. This will make them confident to call 911 and ask for the appropriate help when needed. It also allows the revenue of an in-network insurance company to pay for services. Reference: Nunn, R., Parsons, J., & Shambaugh, J. (2022). A dozen facts about the economics of the US health-care system. The Hamilton Project, 1-28. https://www.brookings.edu/wp-content/uploads/2020/03/HealthCare_Facts_WEB_FINA L.pdf Responses Tee Chester Hello Heather, You make a valid point, and I agree that additional continuing education for EMS personnel on what constitutes the right use of air travel versus ground travel is a fantastic way to reduce healthcare costs. When deciding whether a patient needs ground or air travel, hospitals and EMS services in the vicinity should consult with emergency room doctors in the area for guidance. As a result, the patient wouldn't have to worry about being hit with a huge bill out of the blue. Unfortunately, many insurance providers in our area of Southwest Georgia, which is bordered by Alabama and Florida, do not cover the expense of travel to another state, especially by air ambulance, leaving patients with unexpected bills. Patients could avoid unpleasant

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30 financial surprises by learning about and communicating with their local emergency medical services and healthcare providers. Jacqueline Burns Hi Heather, Agree with educating the EMS and the public about "choice" when it comes to mode of transportation. We can all agree that when a crisis happens "choice" might not be provided to the patient, or the patient might not be in the condition to choose but the result of an unrealistic bill that is not affordable needs to be addressed. If air transportation is required, EMS personnel should submit extensive paperwork upon return into the facility to validate the decision. This is a topic that should be discussed in further detail as I assume many people are not aware of the procedure. Kirsten Mestayer Good Morning Heather, According to “A Dozen Facts About the Economics of the US Health-Care System,” its discussion about ambulatory care is pretty accurate. What I don't understand is how the cost of ambulatory services cost so much money, but the workers are paid so little and are very limited to what they can perform on patients. A $30,000 dollar bill for a helicopter ride is insane. People can't afford these types of medical bills, especially the uninsured. It isn't like they can make the choice to go via helicopter anyway because most of the time they are too bad off. Eva Gutierrez Cruz Hi Heather,

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31 Great job on your post. I had never considered the cost of ground travel vs air travel and if insurances can cover that. Continuing education for EMS and providers can make a significant difference when it comes to if ambulances are covering wherever that patient is being transported to. The pay is also not fair to the EMS if they are billing at excessive amounts and still not being paid enough. Great job! Final Summary While analyzing the causes of the high cost of healthcare in the United States in the “A Dozen Facts About the Economics of the US Health-Care System,” a specific one hit close to home. The share of visits leading to a potential surprise out-of-network bill, by type of service hit hard and close to home. “The surprise billing is very common when patients use ambulance services (51-69 percent)” (Nunn et al., 2022). 69% of surprise billing came from air ambulance services and 51% of surprise billing came from ground ambulances. This is significant due to once the patient receives that bill, they have so many questions. They want to know why their transportation was a helicopter. Unfortunately, it’s due to a decrease in credentialed staffing and budgets within the local EMS system. Local EMS/ambulance services are allowed to make significant decisions on site and determine if they can take the patient via an ambulance from their home to the nearest facility which in our local area max time is 30 miles from the lake. If they decide to call the helicopter, the patient believes they are sending them via the best way. However, it’s not always the case. The medics are making choices based on “what time they get off” or misleading information given to them at the scene. They should use their skills and knowledge to assess the patient to make the best clinical decision for the patient, not for their own interest. Examples include a teacher passing out at the local school with minimal symptoms, the local ambulance services make the call to the local helicopter service and have her

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32 transferred to Tallahassee Memorial Hospital. Absolutely nothing found during her work-up and was discharged from that facility only to have to figure out how to get home from a facility 60 miles away from home. She also now has a $30,000 bill just for air transportation. She could have easily been transferred 2 miles via ambulance to the local Emergency Department to receive the same work-up and be able to call her friends or family to come pick her up at discharge. A strategy to lower the cost of healthcare would include extra continued education to the EMS staff on what constitutes the proper use of air travel versus ground travel. Medical facilities and local EMS services should consider continuing education in the local area along with the local Emergency Department physicians to determine if a patient requires ground versus air travel. This would save a tremendous amount of surprise billing to the patient. In the local area that we live in, in Southwest Georgia which neighbors Alabama and Florida, many insurance companies do not cover the cost of out of state travel especially via air ambulance which then imposes the surprise billing to the patient. Education and communication with local EMS and providers could significantly reduce the surprise billing costs of healthcare to the patients. This will make them confident to call 911 and ask for the appropriate help when needed. It also allows the revenue of an in-network insurance company to pay for services. Individual feedback received was positive x 3 responses. Everyone agreed that the surprise billing from ambulance or air ambulance was significantly high and would provide a negative response from the patient due to such high billing for the service they may not have had the decision to make. Feedback also encouraged EMS to provide medical/clinical reason why the decision was made for air ambulance versus ground transportation.

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33 One thing to change about the current proposed strategy would be to meet with the EMS directors and their medical chief to determine a possible rubric guideline to determine the reason for the request of air travel. This could allow for a more cohesive reasoning of air transportation. Reference: Nunn, R., Parsons, J., & Shambaugh, J. (2022). A dozen facts about the economics of the US health-care system. TheHamiltonProject ,1-28.https://www.brookings.edu/wp content/uploads/2020/03/HealthCare_Facts_WEB_FINAL.pdf

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Wk 3- Health Care Cost Discussion Summary

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