Cost Containment In Health Care Essay

Cost containment remains an elusive goal in U.S. health services delivery due to the numerous reasons of the rising costs of health services and why people and society do not want to lower cost. Health care services costs are rising to recover the cost of research, technology, malpractice insurance, medical equipment, medical school, pharmaceutical research and development, and the trend of medical specialties. Technology has been one of the main reasons for rising costs, because of acquiring new equipment, training people to use it, maintenance, and space for the equipment. Another reason is defensive medicine, where doctors order more testing and require additional appointments to prevent being sued. Moral hazard drives costs up since people will use more services because they are covered by insurance. Lastly, the biggest underlying factor increasing cost is our fee-for-service (FFS) system, developed in 1920s. FFS is patients paying providers for each individual service and after the service is provided, called retrospective payment. Therefore, physicians focus on providing quantity of services, including unnecessary services, rather than on quality. A solution to lower cost would be to

In the 1930s, the American Medical Association (AMA), labor groups, and private insurers opposed NHI concerned about losing profits. Physicians were concerned about losing their autonomy and being paid on salaries. An illustration of our disjointed system between private sectors and government and why cost containment remains elusive. We operate in a capitalist system, therefore, physicians, medical staff, administration, and organizations all want to make money and not to lower costs. Also, as a society we value convenience and technology, which is more expensive. In conclusion, there is no controlling authority to keep cost down, which keeps cost rising and FFS