Essay on "Healthcare Finance Cases"

Essay 4 pages (1177 words) Sources: 4

[EXCERPT] . . . .

cnn.com/2009-06-05/health/bankruptcy.medical.bills_1_medical-bills-bankruptcies-health-insurance?_s=PM:HEALTH

Cases in Healthcare Finance Westwood Imaging Centers: Payment for Referrals.

Case Overview

This case involves a third party medical imaging facility that is trying to generate more business. This company, Westwood, has constructed a rather ambitious marketing method to attract more business. For each referral that they receive from practitioners they are offering a "kickback." These payments back to the practices can amount to considerable financial gains for them; the case notes scenarios in which some practices can receive multiple millions of dollars annually.

There are laws against such practices in the legal code. However, the laws are not comprehensive and many imaging facilities are noted to take advantage of certain "loopholes" in their requirements. Circumvention of these laws can be achieved in no less than two ways. First, the imaging facilities can lease the equipment to the doctor on a per use basis. Thus since the test is "officially" performed in the office then the laws do not apply. The second method is to rent the equipment to the doctors' over a long period of time such as per week or per month. In each case, the practices, under this arrangement, have a significantly increased financial incentive to run more imaging tests for diagnostic purposes. The case also refers to studies that indicate that under such an arrangement upwards of fifty percent more imagining orders are requested.

Discussion

This case outlines one of the most fundamental debates in healthcare today; how to balance the incentive for profits with the care for patients. Under of current system, there are many cases in which financial incentives are considered before the patience's care. Or, at worst, if the there is a decision under consideration for a treatment or test that may or may not be actually needed; the presence of a financial incentive undoubtedly pushes the decision in an obvious direction.

Doctors' today, especially private practitioners, not only need medical skills but also business skills in many cases. For example, from the perspective of the doctor, if you are worried about your patient but also worried about how you are going to meet payroll requirements, the lease agreement, or possibly even an alimony payment then this could skew your decision making to favor activities that increase financial rewards and decrease objectivity. Even if the doctor is not consciously considering financial implications as they are treating patients, the incentives can still be persuasive.

In a report to Congress, researchers pointed out the fact that the U.S. spends more on healthcare per capita than any other OECD country; in fact, it spends more than double the average rate per capita among these developed nations (Peterson & Burton, 2007). Despite the tremendous amount of expenditures by the U.S., it doesn't rate as well in regards to overall health as many of the other countries; it actually ranks seventy second in the world by one account (Schmidt, 2010). If these estimates are accurate, then the U.S. healthcare industry is tremendously inefficient. Relating back to the case, loopholes that exploit the profit incentives for doctors are undoubtedly on of the factors that account for such a financially inefficient system.

Works Cited

Peterson, C., & Burton, R. (2007, September 17). U.S. Health Care Spending: Comparison with Other OECD Countries. Retrieved August 30, 2011, from CRS Report for Congress: http://assets.opencrs.com/rpts/RL34175_20070917.pdf

Schmidt, J. (2010, June 18). Who Has The Best Health Care? Retrieved August 30, 2011, from Informatica: http://blogs.informatica.com/perspectives/index.php/2010/06/18/who-has-the-best-health-care/ READ MORE

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