Pharmacology

Introduction

Rising healthcare costs is becoming a very important issue to many Americans. There is a lot of confusion about the specific causes, and the need for a major reform by the government. Most Americans want to continue to have the best care available to them, but are not willing to give up anything in order to make the necessary changes to improve the system.

Main Issue

Rising health care costs is becoming more and more of an important issue for people. “The United States has the most expensive health care system in the world, with per capita health expenditures far and above those of any other nation (Bodenheimer, 2005, ¶1) The health care costs have been climbing for many years now, and people are getting worried what the future will hold.

Several explanations have been offered for high and rising health care costs. These include the perspectives that high and rising costs are created by forces external to the health system, by the weakness of a competitive free market within the health system, by the rapid diffusion of new technologies, by excessive costs of administering the health system, by the absence of strong cost-containment measures, and by undue market power of health care providers. (2005, ¶2)

Environmental Analysis

The rapid flow of new technologies in the United States has driven costs up in a short amount of time. The more health care technology improves, the more the cost of health care is going to go up.

Because the spread of new technologies is relatively unrestrained in the United States, many of these technologies are used to a greater extent than in other nations, and the United States thereby incurs higher health care costs. Nations with a greater degree of health system integration have relied on expenditure controls and global budgets to control costs. Although diffusion of technology takes place more slowly in more tightly budgeted systems, the use of innovative technologies in those systems tends to catch up over time. (2005, ¶1)

Indirect implications to rising costs are slower workforce growth, additional off-shoring pressures, additional part-time versus full-time workers, slower cash-wage growth, reduced pension coverage and benefits, and slower individual income tax growth. (Walker, 2005, ¶1)

SWOT Analysis

A SWOT analysis is a useful approach to gaining an understanding of the situation an organization is facing at a particular time. The analysis represents the organizations strengths, weaknesses, opportunities, and threats (Peter & Donnelly, 2005, p. 214).

Strengths. A strength of healthcare costs rising is the increase in knowledge and technology. There is much better equipment being used by more competent people than there was 10 years ago. Another strength would be available healthcare to people who cannot afford it. People pay taxes to help cover the costs of others without insurance that cannot afford to pay their healthcare bill.

Weaknesses. The most obvious weakness is the cost of healthcare these days. It is almost unaffordable to have for a lot of people. Many employees find it difficult to spend money on paying for health insurance each month. Employers are also feeling discouraged about offering expensive insurance plans to the employees.

Drug companies spend roughly as much on advertising and promotion-$20 billion a year-as they do on research ad development of new drugs. New technology-from diagnostic devices to surgical techniques-accounts for more than half the rise in total healthcare spending in the past three years. Already the nation is spending about $1.65 trillion a year on healthcare. That represents 15 percent of gross domestic product, the total output of goods and services. It consumes one-fourth of the federal budget, more than defense. By comparison, Canada spends about 10 percent of gross domestic product on a universal, government-run healthcare system. Further, Canadians live a bit longer on average than Americans. That suggests lower costs have not damaged the health of Canadians. (Francis, 2003, ¶ 2-10)

Opportunities. This country is in dire need of reform for the healthcare system. There are a lot of opportunities in this area to improve the situation.

Provide more information to consumers on what drug works, what procedures are best, which hospitals and physicians have good records. Insurance, for instance, should not cover extra costs if a patient uses a brand-name drug when a cheaper generic does the job. Cut off expensive treatment if it extends someone’s life only a few days or months. Spend more on prevention of disease by encouraging better lifestyles, improved nutrition, and other steps. Ban or control the advertising of prescription drugs to consumers. The ‘hype’