Term Paper on "Higher Health Care Costs"

Term Paper 13 pages (3688 words) Sources: 1+

[EXCERPT] . . . .

Buffett Taylor & Associates say that the software tracks, analyses and generates reports quantitatively and qualitatively. It also reveals return on investment as well as organizational trends in areas such as absenteeism, productivity, disability/benefit costs, company morale, employee attitudes, program participation. Other features of the Buffett Taylor Employee Wellness Cost Benefit Software are:

The flexibity to accommodate a multitude of user requirements - e.g, multiple sites, multiple users, a variety of program initiatives with different measurement requirements, or other customized needs. The company cites, as an example, the ability to measure the effectiveness of an organization's its cardiovascular wellness program by tracking health progress, absenteeism, medication usage, knowledge level and participant satisfaction - and provide reports in an aggregate manner. Additionally, it will calculate the return on investment of the program, showing the financial impact of outcomes such as reduced absenteeism, increased productivity, reduced medical claims, and so on.

With help from groups such as Buffett Taylor & Associates, more and more companies will begin to adopt employee wellness initiatives.

Companies are becoming friendlier workplaces in the 21st century, and one of the key ways to accomplish the change is through employee wellness initiatives. As we have established, not only do they decrease costs, they improve employee moral and productivity.

Of course, more direct research must be done to actually develop the amount of savings companies will enjoy; but for now, they must trust their instincts instead of their bottom lines.

In areas such as ergonomic help, preventive medicine is the issue that will cut costs long-term. And with managed disability, employees who are out of work for a while are cared for and kept on board, thereby decreasing the chances and costs of having to replace them and train a new employee and ramp that person up.

Basic wellness initiatives such as these will go a long way in reducing costs long-term, but it will be much harder to convince CFOs short-term, especially in smaller corporations where every line item on a P& L. is so critical to the quarterly reports.

So it is up to the larger companies such as Pfizer to lead the way and show that money will indeed be saved before the smaller companies take on the mantle of employee wellness programs.

Buffett Taylor and Associates has done an admirable job of leading the way on the research, but many more health care consulting firms must follow suit before smaller and mid-cap corporations are convinced.

Medical Licensing Laws:

One Step Forward, Two Steps Back

Our basic system of economy is that of the free market. The supply and demand for certain goods and services set price and availability and, of course, quality. For instance, there is now a huge demand for digital cameras, so the quality is rapidly increasing on every model, as each brand of camera lowers its prices several notches to compete with the other brands.

The result is better products and lower prices: the essence of perfect competition, or at least what passes for it in our modified free market economy. Of course, there are checks and balances worked into our economy that interfere with the free market process, but for public policy reasons. Most of these checks and balances are built in with the understanding that life is finite, and ends at some point.

For instance, there is a social welfare net to provide for those who are unable to take care of themselves. In a pure free market system, that welfare net would not exist because it would be inefficient, but we have one because we cannot in good conscience let those who are less fortunate than us in certain ways suffer for their entire lives. We trade economic efficiency in for insurance, in a matter of speaking.

The same situation holds true, and to an unparalleled degree, in our health care system. We require much more regulation and licensing of anyone and any entity involved in proving health care in our country than we do in any other industry. In general, proponents of licensing argue that we cannot simply let the free market take the reigns of our health care system since lives are at stake. Instead, we must impose strict guidelines on doctors, nurses, physicians' assistants to ensure that they have the qualifications and have passed the necessary loops to be entrusted with treating patients.

However, a close examination of the licensing guidelines, restrictions and procedures reveals that licensing in the medical fields only contributes to rising health care costs and not to patient quality of care in the long run at all.

A clear indication of the ineffectiveness of licensing stems from a report issued jointly by the Federal Trade Commission and the Department of Justice advocating sweeping changes in our health care practices in order to drive down costs and fraud. In the report, issued in July of 2004, the two departments wrote, "Consider broadening the membership of state licensing boards, as boards with broader membership could be less likely to limit competition." (www.ftc.gov)

Here, the two governmental arms agree that changes must be made to licensing procedures, at the state level. A broader membership base would allow more service providers into the health care economy, driving down price and increasing quality of care via competition. The Federal Trade Commission and the Department of Justice decry the limited entry system we have in health care today as an artificial limitation on the possibilities of health care, both from a costs perspective and of course from a quality-of-care perspective.

By allowing more providers into the health care economy, the DOJ and FTC also state that different types of medical healing would be given the opportunity to help people. The report continues, "Consider implementing uniform licensing standards to reduce barriers to telemedicine and competition from out-of-state providers" of health care services.

In that call-to-arms, the DOJ and FTC directly ask for lower licensing standards to allow patients to receive more care, of a disparate variety, that will drive costs down and quality of care up. If a patient can call a doctor over the phone to receive treatment, he is much more likely to do so. The doctor profits, the patient heals, and all is done at a lower costs through two angles: First, it is more efficient from an economic perspective for a patient with, for instance, a simple cold to talk to a doctor over the phone than to visit a doctor in his office. That is the first cost reduction principle. Second, more doctors will be able to provide more services over the phone in smaller amounts of time, increasing the availability of services, thereby reducing costs.

The Future of Freedom Foundation agrees with this principle of lowering licensing requirements too: "A few licensing laws existing at the time of the Revolution were soon repealed. The three principles outlined above elevated America in the 19th century to the healthiest nation on earth, although the American people were mainly poor immigrants. Innovation produced many new systems of healing. However, if you wanted to visit a witch doctor, it was your right. Herbalists, nature-cure therapists, hydrotherapists, nutritionists, osteopaths, allopaths, homeopaths, and eclectic practitioners offered services. There were a variety of healing schools and clinics. No healing modality or group of healers had a legal advantage over the others. Whoever helped people the most prospered." (www.ffc.org)

In other words, the Future of Freedom Foundation decries the lack of access for alternative providers of medicine. What of the osteopaths, allopaths, homeopaths and other specialists who do not have state medical licensing but have the ability to truly heal people? They were allowed to practice in the 1900s, but are not allowed to practice today, at least with the same recognition as medical doctors who are licensed.

The Future of Freedom Foundation has one simple test: If you can help heal people, then you are "licensed." Eliminate external and extrinsic tests that are not directly related to patient care and health, but are more related to jumping through red-tape hoops.

The Future of Freedom Foundation report continues, "Getting rid of the medical-licensing laws, HMO laws, and government subsidies to medical schools and drug research would terrify the monopolists but it would return the health system to health and sanity. Competition would increase, prices would drop, insurance might not even be necessary, and access to care would increase." (www.ffc.org) Is not that the goal of both the Democrats and the Republicans? To increase the quality of care while decreasing the cost of care?

By removing licensing standards, we would cut down on the monopolistic power of the American Medical Association and widen the field for research and practice: Of course, we want to maintain some guidelines and control over who can practice, but that can be done by looser federal licensing guidelines, not state-specific red-tape as we have now. That is also what the DOJ and FTC advocate.… READ MORE

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