Rising Health Care Costs

Rising Health Care Costs
University of Phoenix
Introduction To Health Care: Riding The Fourth Wave

Rising Health Care Costs
According to Austin and Wetle, “before health insurance became the primary method of payment, if you were sick you paid for health care services directly. You paid the doctor, you paid for a nurse, and you paid the pharmacist for medicines. If you could not pay, you depended on charity or you did without.” I learned that purchasing insurance is a way to handle that doubt and chance of financial loss—in other words the risk of loss. Some functions and incentives of Health Maintenance Organizations (HMOs) affect costs is that the Health Maintenance Act of 1973 “gave the federal government authority to provide financial incentives to new HMOs and required employers to offer HMOs as an alternative to indemnity insurance” (Austin and Wetle, 2012).
Personally, I believe that HMOs cause the rise of health care costs because the amount of the certain dollar asked for the patient to provide monthly or yearly to payment. I learned that usually payments are made by the employer. According to Austin and Wetle, if an employee uses fewer services, the provider keeps the difference. If an employee uses more services, the provider has to absorb that cost. This creates a financial incentive to provide fewer services to the patient (Austin and Wetle, 2012), which leaves to question if the patient is getting all of the right services they need and are is the patient being overcharged for health care if they are provided fewer services from the employee. Either way, I believe HMOs are the cause of riding health care cost, due to handling of employees.

Austin PhD, JD, A., & Wetle RN, EdD, Victoria. (2012). The United States Health Care System: Combining Business, Health, and Delivery (2nd ed.). : Prentice Hall.