Week 1 Lecture 3.html
Cost Drivers of Healthcare Concerns Chronic Disease
One of the cost drivers of healthcare concerns chronic disease. Chronic diseases seem to be rising in the U.S. Heron et al. (2009) tell us that, as of 2006, seven out of ten deaths each year in the U.S. are caused by heart disease, cancer, or stroke along with diabetes, asthma, and chronic obstructive pulmonary disease (COPD). Chronic diseases are a major driver in the cost of healthcare, and a good deal of the cost of care can be reduced through proper primary care and self-care. Diseases seem to be fighting back! Methicillin-resistant Staphylococcus aureus (MRSA) and influenza are creating challenges for conventional treatment that are expensive. Even as medical science appears to be getting a handle on human immunodeficiency virus infection/acquired immunodeficiency syndrome (HIV/AIDS), nature has added new and perhaps even more lethal diseases. Labor is a major component in healthcare. At present, there are not enough doctors or nurses to handle the volumes of patients that present with health issues. This tends to be a cost driver; the supply of doctors is low, and the demand is high, pushing up the price of doctors, as Adam Smith predicted. The same reasoning holds for other healthcare professionals. Technology has enabled great advances in the ability of doctors to treat healthcare issues that were simply too difficult to treat in the past, but the technology is very expensive and tends to be an upward cost driver. An example is the robotics used in very complex surgery, which was simply not possible previously. The pharmaceutical industry creates new drugs that increase doctors' ability to treat disease faster and more effectively. Unfortunately, each new drug is ever more difficult to invent and is ever more expensive than the last. The low-hanging fruit is gone.
In this lecture you leaned that one of the cost drivers of healthcare concerns chronic disease. Chronic diseases are a major driver in the cost of healthcare, and a good deal of the cost of care can be reduced through proper primary care and self-care. In the next week you will review. A healthcare manager in or aspiring for a leadership position should focus on concepts in finance, keep current with the trends in healthcare, and improve skills in research to be able to keep up with the legal aspects of healthcare.
Resources:
Heron, M., Hoyert, D. L., Murphy, S. L., Xu, J., Kochanek, K. D., & Tejada-Vera, B. (2009). Deaths: Final data for 2006. National Vital Statistics Reports, 57(14). Retrieved from http://www.cdc.gov/nchs/data/nvsr/nvsr57/nvsr57_14.pdf
