Topic 1: Third-party Payment
How does third-party payment distort the market for health care? If it is so distorted why does every wealthy country insist on using third-party intermediaries to purchase health care? Why do we carve out a separate payment program for our elder citizens?
At least 250 words, with 2 references/citations
Expert Solution Preview
The topic of third-party payment in healthcare has been a matter of debate in the medical industry. As a medical professor who designs and conducts lectures for medical college students, I aim to provide an answer to the following question:
How does third-party payment distort the market for healthcare? If it is so distorted why does every wealthy country insist on using third-party intermediaries to purchase healthcare? Why do we carve out a separate payment program for our elder citizens?
Third-party payment refers to the payment of healthcare services by an intermediary, such as insurance companies or government programs, rather than individuals. While third-party payment can offer benefits, such as increased access to healthcare and financial protection for patients, it also has several drawbacks. One major issue is that it distorts the market for healthcare services by separating the consumers of healthcare services from the providers and shifting the focus of healthcare on financial management instead of patient outcomes. Additionally, third-party intermediaries can also create incentives for providers to increase the volume of services rather than focusing on quality patient care, which can lead to overtreatment and waste of resources.
Despite the drawbacks of third-party payment, every wealthy country insists on using intermediaries to purchase healthcare for their citizens. This is because third-party payment can provide financial protection against catastrophic healthcare expenses and guarantee a more equitable distribution of healthcare services. Additionally, intermediaries can negotiate with healthcare providers for lower prices, which can help control healthcare costs.
Regarding our elder citizens, the Medicare program was created to provide healthcare coverage for individuals over 65 years of age. This separate payment program was created because elder citizens have higher healthcare needs and costs, and private insurance companies are less willing to provide coverage to this population due to the high risk associated with an aging population. Medicare is a government-managed program that provides healthcare services to elder citizens, thereby ensuring that they receive adequate healthcare services.
In conclusion, while third-party payment can distort the market for healthcare services, it is still widely used in healthcare systems worldwide due to its ability to provide financial protection and negotiate lower prices. Additionally, separate payment programs, such as Medicare, are necessary to ensure that higher-risk populations, such as elder citizens, receive adequate healthcare services.