Lowering Healthcare Costs And Global Medical Tourism

2366 words - 9 pages

As healthcare costs continue to escalate in the United States, employer healthcare plans are looking for alternatives pricing plans to lower healthcare insurance costs for their employees. Blue Ridge Paper Products (BRPP) is one company in Canton, North Carolina who is attempting to decrease healthcare costs for their employees by offering health promotion incentives and more cost effective provider reimbursement options (McLaughlin & McLaughlin, 2008). McLaughlin and McLaughlin (2008) explain while the health promotion strategies they have instituted have been successful at lowering BRPP’s healthcare claims, they have found it difficult to negotiate lower costs with local healthcare providers. In this paper, I will discuss possible consumer and provider bargaining strategies with regarding to lowering healthcare costs; the benefits of a large academic medical center and a large tertiary community hospital; and finally, how medical global tourism will affect state and national healthcare policies.
Decreasing Healthcare Costs: Bundled Pricing and Lowering Administrative Costs
It would be necessary for a hospital administrator to look closely at ways to lower healthcare costs and provide more efficient care when a large employer like BRPP states they are thinking of relocating their employee inpatient hospital services to a company like InduShealth. InduShealth is offering substantially lower prices for several surgical procedures and a U.S. hospital administrator would not want to lose this large consumer population if it was possible to find more efficient methods of providing healthcare to their patients (McLaughlin & McLaughlin, 2008). One pricing strategy that a hospital administrator could advocate for is a bundled payment system, where healthcare services are combined and patients are charged one price final price for their inpatient hospital stay (Berkowitz, 2011). However, it is important for hospitals to be able to portray the benefit to consumers of combining services for one total cost versus purchasing services individually (Berkowitz, 2011). Currently, most healthcare centers in the U.S. utilize a fee-for-service (FFS) payment system where the focus is on the volume of services generated versus cost-effectiveness and quality (Scamperle, 2013). However, McLaughlin and McLauglin (2008) explain that many healthcare centers want to move toward a pay-for-performance system which rewards healthcare providers who institute quality-oriented initiatives, such as electronic technologies, that promote prevention strategies and decrease waste. Scamperle (2013) states a major advantage of bundled pricing is total costs can be reduced for consumers and quality of services can be improved by eliminating inefficiencies. She reveals these pricing plans are more cost efficient because one single price is generated from multiple providers for a single episode of hospital care. She explains hospital bundled pricing plans are in enticing...

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