Health Care Cost Essay

The rising cost of health care can be reduced by aggressively regulating health care prices. The US and France can reduce health care spending by a substantial amount by regulating health care prices, as done by Japan. The central government of Japan determines the maximum prices for health services which keeps total health spending growth within a target set. Its national fee schedule is revised by a panel of experts using volume projections. Along with the price control, Japan also monitors provider’s profitability. The prices for the services are reduced, if a particular category of provider demonstrates more than average profit. 11
The US lacks transparency and administrative simplicity because a majority of private payers negotiate prices with health care providers on an individual basis. As opposed to the single-system in the US, an all-payer system as in Germany and Japan reduces spending growth and is more efficient and equitable. A few …show more content…
If provider’s income is lowered, the quality of applicants pursuing a career in medicine may be reduced. Similarly, less research and development and fewer pharmaceutical breakthroughs may be the consequences of lower drug prices. The opportunity costs associated with restricting access and regulating prices versus public funding must be analyzed in order to contain cost. 11
Another way of reducing health care cost is by maintaining balanced diet to reduce obesity. From an economic standpoint, treatment of obesity and obesity-related conditions require two types of costs: Direct costs and Indirect costs. Direct costs can be defined as those costs that result from drug therapy, outpatient and inpatient health services, and laboratory and radiological tests. Some resources are forgone due to an individual’s health condition. Such type of costs are indirect costs. Direct costs are easier to identify and measure than indirect