US Healthcare Payment System and Programs

American Health System

The American health system has undergone a major evolution since the inception of the nation. America’s health system has been under much scrutiny over a long time, more so because it is fragmented and, to some extent, inefficient. Indeed, the U.S. spends more than any other developed country on health care. Further, the health system is financed by private insurance and the government.

In 1965, the government enacted Medicare and Medicaid through the Social Security Act; these programs provide health benefits to citizens and persons with low incomes. Later, these entitlements were extended to include children under 21 years and persons with disabilities thus facilitating the availability of comprehensive health care to citizens. This was followed by the creation of the State Children’s Health Insurance Program (SCHIP), which covered uninsured children.

Recently, the US government has enacted new universal healthcare policy reforms, including the accessibility of health care to children over 21 years and unemployed persons.

The third-party payment system and its impacts on the economics of health care in the nation

A third-party pay system involves a situation where an independent party in an insurance contract acts on behalf of a policyholder and in the process bearing a significant portion of premium payments, thus making the contract more cost-effective. Generally, third-party payments reduce the cost of medical insurance for the beneficiary mainly because the third-party assumes the largest portion of insurance premiums. Commonly, employers, unions, and the government are the third parties. In the United States, the health care insurance system relies heavily on third-party payment systems. Indeed, only 12 percent of health insurance cost is remitted by individual policyholders. Generally, third-party payers do not influence an individual’s treatment decisions.

The system has laid heavy economic burdens on the employers who are compelled to remit a large number of premiums for their employees. In this case, the third party payment system is cited as the major problem facing the US health care system.

Moreover, health care in the US is perceived to be inefficient due to the disproportionate amount of premiums paid to various people. Additionally, the healthcare system has huge economic burdens, since some insurance claims paid by the third party system do not adequately cover all the needs of the policyholders. Therefore, the TPP system needs to be replaced with a single payer’s policy where the policyholders are encouraged to be responsible for their insurance.

The potential improvement of existing health entitlements

Medicare is a single-payer health program entitlement enacted by the federal government that covers citizens aged 65 years and over. Primarily, the government funds Medicare with its revenue. This program provides various benefits namely hospital and physician services, prescription drug services, and Medicare Advantage. The health care entitlement should be maintained, however, it requires some reforms. In most cases, senior citizens incur high costs in meeting their health services and Medicare assist in meeting the cost. However, the benefits from this entitlement are very minimal as it does not cover skilled nursing, prevention, or visual or dental services. Thus, there is a need to increase funding of Medicare to cover more health issues affecting senior citizens.

On the other hand, Medicaid is an entitlement program aimed at assisting low-income earners and disabled persons. The state governments are tasked with the provision of this assistance and assessing the eligibility of benefits. Moreover, Medicaid is funded by federal and state governments, and it gives a comprehensive set of benefits; however, some health providers do not offer services to patients with Medicaid due to its low reimbursement rate.

Therefore, the government should not keep this program in the future; instead, it should be replaced with a universal health-care policy. Moreover, the program does not effectively meet its targeted goals, since many poor people are sidelined from the program. Besides, there are constant changes in eligibility and failure of health service providers to accept it.

SCHIP is an entitlement for children from families who do not qualify for Medicaid but they cannot afford private health insurance. The state governments need to restructure the program to control its enrolment and the benefits it offers to the enrolled parties.

The relationship between hospitals and physicians in California

The physicians and hospitals have a strong relationship, which integrates them. Indeed, nearly 45% of hospitals report having a good relationship with employed physicians. Besides, physicians-hospital organizations (PHO) are a body that helps to manage the relationship between physicians, hospitals, and third parties. Indeed, hospitals require that all physicians should have malpractice insurance before they are allowed to practice.

Thus, this provides a higher quality of services since the physicians are covered in case of any eventuality. Due to the positive relationship, the hospitals can retain most physicians; hence, there is enough personnel to administer health services. Moreover, this implies that patients incur lower costs since they do not have to seek private and independent physicians.

Generally, the relationship between hospitals and physicians is fuelled by trust between the two parties and remuneration offered to the physicians. The state of California exempts some hospitals to employ physicians; however, the state should permit the corporate practice of medicine. In some cases, hospitals lack a sufficient number of physicians who are willing to work in some geographic areas like rural areas, thus the hospitals should be allowed to recruit, train and employ full-time employees to work in such settings. Additionally, there are large numbers of uninsured Californians, thus the community has always been experiencing difficulties in recruiting and retaining physicians.