Economic and Finance Choices in U.S. Healthcare

U.S. Healthcare

Hard Economic and Finance Choices in U.S. Healthcare

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The United States has recently undergone a financial crisis that has made the government, and the citizens, more conscious of what things cost and have produced debates regarding the costs of items. One debate that has intensified in volume is that over the large, and ballooning cost of healthcare. Although the Affordable Healthcare Act is supposed to take care of a portion of that, evidence shows that costs will remain exorbitant. The main reason for that is the research and development costs of therapies and associated drug treatments. Currently, new therapies have been coming on the market that are able to prolong the lives of cancer patients, but a that these therapies are too costly. The debate then is whether a few weeks, months, years of life are worth hundreds of thousands to millions of dollars. This paper looks at some recent examples of cost and treatment application to determine whether there is a better way to manage overall treatment (i.e., healthcare for the entire U.S.) that will also be cost effective.

The first question many in this debate ask is what is the value of one human life? Given that there are approximately 320 million people currently living in the United States, is it worthwhile to spend hundreds of thousands to extend the life of one. The reason for the question is that if that large amount of money were not used for the one patient, it could be used for treatments for many other deserving people (Stein, 2010). The individual human side of the debate asks what an individual would give to prolong their own life.

Recently this debate has because of the passage of the Affordable Healthcare Act in 2010. Popularly called Obamacare, the Act has one provision for a select committee that oversees what will and will not be paid for by Medicare. The issue here is that a sweeping declaration, such as discontinuing the approval for Provenge as a treatment for late stage prostate cancer, can cause serious harm to a lot of people. The committee does not, by law, take cost of treatment into account, but it is difficult to believe this statement when the drug mentioned above costs $93,000 per treatment and only extends the patient’s life by an average of 4 months (Stein, 2010). To the majority of people this may sound extreme, but to those who have the disease and want to live a few extra months to be with family a little longer, it does not seem like a large expense at all (Stein, 2010).

Short (2013) makes the statement that economics is amoral and that “the health market as viewed by economists is amoral: when confronted by finite resources there will be winners and losers.” These are all true statements. Economics, by definition does not look at the right or wrong of a decision, but in the economics behind it. As Short (2013) suggests, morality is left to politicians and others. However, even if the actual numbers are amoral, the decisions about what to do with those numbers is not.

People, no matter how much economists would like this, are not just numbers. Solutions to problems cannot involve simple economic because the winners and losers scenario is untenable to most people when they are declared the healthcare number’s lottery loser. It would seem like a better idea to look at what the numbers suggest, and then look for other means to use the finite resources so that the expensive treatments do not individually affect the system to such a great extent.

One method, suggested in an article by Sullivan (2010), is to use similar therapies which have been proven more cost effective, but, for some reason, are not being utilized. The article in question looks at two modalities for dialysis treatment in patients who have been diagnosed with some stage of renal failure. The choices are hemodialysis and peritoneal dialysis (PD) (Sullivan, 2010). The first type is the most common, but it requires that a patient travel to a dialysis site and have the procedure done three times per week. Peritoneal dialysis is done daily by the patient, but it can be done in the home with only infrequent visits to a clinic to acquire needed supplies (Sullivan, 2010). The issue is that the numbers of individuals who require dialysis treatments is on the rise which should mean that the use of both types of therapy are on the rise also. However, the numbers for PD remain roughly flat while the number of patients who are receiving hemodialysis continues to rise. The give for this is that PD is not as safe, but Sullivan (2010) produced research which shows this is not the case. The real reason seems to be that the fixed dialysis sites are expensive and they have to be paid for. If a person gets the PD, then there is no reason for the fixed site. It seems that the better economic decision would be to allow more patients to have PD, but that does not seem wise to healthcare professional who are attempting to survive as a clinic or a hospital (Sullivan 2010).


Sullivan admits that there could be other reasons for this anomaly, but it does seem curious that the rate of PD patients is not rising with the increased incidence of people needing dialysis. How does this fix the overall issue? There could be alternative treatments that are more cost effective that are not being used for various reasons. Since there is a healthcare crisis related to cost it would seem to behoove those in charge of such decisions to make choices that seem more financially responsible.


Short, N.M. (2013). Overview: The Economics and Finance of Health Care. In J.A. Milstead (Ed.), Health policy and politics: A nurse’s guide (4th ed.) (pp. 191 — 206). Sudbury, MA: Jones and Bartlett Publishers.

Stein, R. (2010, November 8). Review of prostate cancer drugs Provenge renews medical cost-benefit debate. The Washington Post. Retrieved from http://www.washingtonpost.com/wp- dyn/content/article/2010/11/07/AR2010110705205.html ?

Sullivan, J.D. (2010). End Stage Renal Disease economics and the balance of treatment modalities. Journal of Service Science & Management, 3(1), 45 — 50. Retrieved from the .

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