Health care reform - Assignment Example

?The United s has underperformed the rest of the world for decades in terms of the scope of its healthcare coverage. This lagging behind has caused significant harm to individuals who depend on these kinds of services for their life. Part of this inefficiency and substandard level of care is the rising costs of health coverage. Like any service, health services come at a premium, which is collected from customers (or “patients”) so that the system can function. However, unlike all other services, health services increase (or, when they are substandard, decrease) an individual’s chances of surviving longer; thus, there is some moral concerns attached to the treating of health services as a traditional industry focused on profit rather than affordability. Because of these costs, many Americans still continue to go on without health insurance, despite the risks that brings. This crisis has forced some to lobby for an increase in the federal government’s role to lower costs of healthcare and increase coverage. Although it may be quite some time before a universal health plan comes to fruition, it would behoove the key players involved to understand the effects such a plan would have on the nation as a whole. Perhaps the industry and sector of the economy most affected by healthcare reform is the insurance companies. While it may seem as though insurance companies would be hurt substantially by a healthcare overhaul by the federal government, it seems more likely that insurance will be subsidized rather than eliminated. That means that millions of new customers, who could not pay for their own health insurance coverage, will be entering the insurance market with vouchers from the federal government. In fact, when the Congress approved healthcare reform in 2009, stock prices in health insurance companies rose considerably (Drum, 2009). Because the government is financing all of these insurance accounts, the insurance companies will be able to make a greater profit. In contrast, under a universal healthcare system, the need for insurance companies would be altogether eliminated. Another key player in healthcare reform is the federal and state governments. President Obama ran on a platform of overhauling the system of healthcare in the United States. While pushing for a universal system to begin with, the President ultimately settled for a reform measure that embraced insurance companies (Guilloton, 2011). The federal government thus plays a role in making health coverage affordable, which means subsidizing individual accounts for those who cannot reasonably afford health insurance. This has the effect of increasing demand for healthcare services (that is, by making more individuals able to pay for them) while keeping the supply of healthcare services the same. State governments are, in their current role, able to accept or reject optional policies offered by the federal government program. Thus, the degree to which people who cannot afford insurance can access these healthcare services will differ from state to state (Guilloton, 2011) Employers are an often-overlooked part of the reform equation (Simon, 2010). Given that nearly 61 percent of working people in the United States had employer-based insurance in 2008, these reforms will have a central role in determining their plans. In general, however, larger employers will be required to keep their insurance programs under threat of fine. Smaller employers will face fines for not providing coverage to their employees. Another hope of healthcare reform is that individuals, also under threat of fine, will be incentivized to find health insurance coverage, either if it is through their employer or through an insurance company. For those Americans who live under the poverty level, a subsidized form of insurance is provided only if those individuals (and their families) do not have employment-based coverage. The government’s roles in setting these conditions is a function of their goal to lower healthcare costs, which employers can have a central role in doing. However, a universal system of care would also make employer-based coverage, like the service from insurance companies, obsolete. Some other overlooked roles in the healthcare situation are played by academic institutions and the healthcare providers themselves. As previously mentioned, introducing subsidies that expand healthcare coverage to more individuals ignores the principle of supply-and-demand. By allowing more people into the market than their capital allows, the government is creating a disproportionate amount of demand in a system where supply changes only marginally. Thus, strain may be introduced into the system, similar to the housing market. Labor costs will increase and therefore undermine the expected results of the reforms (Proto, 2010). Healthcare providers are struggling with the amount of demand they have currently, independent of the coming reforms. Secondly, academic institutions play a role by influencing political opinions. Research is crucial for directing the policy decisions of the federal government and depending on the biases in those institutions, they may influence opinions either way. Globally, the effects of healthcare reform can be measured in a number of ways. One measure is the overall growth rate of healthcare spending, which would ideally decrease in the years following the introduction of reforms. One could also measure reform in terms of increase in quality of care, affordability of insurance, and a decrease in unemployment rate. Each of these metrics has been tied to the healthcare system (McClellan, 2009). Of course, there will be no way of knowing the degree and the timing with which to evaluate healthcare reform until it has been in effect for years and has trickled through the entire economy. Nevertheless, the economics of the situation paint a relatively disconsolate picture of reforms. It is difficult to imagine, given the influx of new customers into the healthcare industry, that supply will be able to keep up with demand, which means quality of care will stay constant or decrease. Although affordability of insurance may increase due to government subsidies, there is no guarantee that healthcare spending (for this very reason) will decrease over the life of these reforms (Proto, 2010). American healthcare is, on many accounts, in a state of crisis. The situation has compelled politicians and public interest groups to lobby for an increase in the federal government’s involvement in lowering costs of healthcare and health insurance. Despite the fact that a universal health plan in the United States is a long way off into the distance, the key players involved in the healthcare debate still should understand the effects such a plan would have on the nation as a whole. The demand for health professionals under a universal coverage will increase dramatically. The initial increase in demand will add costs and restrict supply available. There will be a shortage of health care professionals trained and available to care for the all newly covered individuals. Although there are moral concerns about treating the health services industry as a for-profit enterprise, from a positive economic perspective, the potential harm done to society by changing the system to a universal healthcare plan outweighs the harm being done within the current structure. Works Cited Drum, K. (2009, December 22). Insurance companies and healthcare reform. Retrieved March 10, 2011, from Mother Jones: http://motherjones.com/kevin-drum/2009/12/insurance-companies-and-healthcare-reform Guilloton, S. (2011, March 1). Obama offers a compromise on health care reform to the states. Retrieved March 12, 2011, from Examiner: http://www.examiner.com/health-care-in-national/obama-offers-a-compromise-on-health-care-reform-to-the-states McClellan, M. (2009, June 2). The economic impact of health care reform. Retrieved March 10, 2011, from Brookings: http://www.brookings.edu/events/2009/0602_health_care_reform.aspx Proto, R. (2010, June 7). The new health care economy: Can supply meet demand? Retrieved March 10, 2011, from The Huffington Post: http://www.huffingtonpost.com/randy-proto/the-new-health-care-econo_b_603092.html Simon, K. (2010, May 24). Implications of health care reform for employers. Retrieved March 10, 2011, from American Progress: http://www.americanprogress.org/issues/2010/05/health_employers.html Read More