Choose an economic issue in health care that is driving change in the industry. For example, pandemic responses, staffing shortages, drug prices, the emergence of pharmacy-provided health care, the aging population, chronic disease, et cetera. Choose an issue of interest to you. An upcoming assignment will require you to delve deeper into the subject.
Provide a one-page description of the economic issue and how or why it is driving change in health care.
Full Answer Section
Factors Contributing to Rising Drug Costs:
- Research and Development: Pharmaceutical companies invest heavily in research and development (R&D) for new drugs, often recouping these costs through high drug prices.
- Drug Pricing Strategies: Companies may employ strategies like "evergreening" existing patents or setting high initial prices for new drugs, knowing that insurers will negotiate them down.
- Limited Competition: In some cases, a lack of generic alternatives or competition within a particular drug class allows pharmaceutical companies to maintain high prices.
- Direct-to-Consumer Advertising: Heavy marketing directly to consumers can create a perception of a drug's necessity, potentially influencing prescribing practices and patient expectations.
Impact on Healthcare System:
- Patient Affordability: High drug costs can lead to patients skipping medications, delaying treatment, or facing financial hardship to afford necessary prescriptions. This can worsen health outcomes and increase overall healthcare costs.
- Insurance Costs: Insurance companies pass on the burden of high drug costs to consumers through higher premiums, deductibles, and co-pays.
- Provider Decisions: The rising cost of medications can pressure healthcare providers to make treatment decisions based on affordability rather than solely on patient needs.
Driving Change in Healthcare:
- Policy Proposals: Policymakers are exploring various solutions, including drug price negotiation by Medicare, promoting generic competition, and addressing patent evergreening practices.
- Focus on Value-Based Care: A shift towards value-based care, which emphasizes cost-effectiveness and improved health outcomes, encourages prescribing medications with proven benefits at a reasonable cost.
- Pharmacy Benefit Managers (PBMs): PBMs negotiate drug prices with manufacturers and manage prescription drug benefits for insurers. Their role and practices are being scrutinized to ensure fair pricing and access to medications.
- Patient Advocacy: Growing patient advocacy groups raise awareness and pressure for solutions to address high drug prices.
The Future of Drug Pricing:
Finding sustainable solutions for prescription drug pricing is crucial for ensuring patient access to necessary medications and maintaining the financial stability of the healthcare system. Collaborative efforts from policymakers, pharmaceutical companies, insurers, and healthcare providers are needed to navigate this complex issue and achieve a balance between innovation, affordability, and patient access to life-saving medications.
Sample Answer
The Looming Crisis: The Rising Cost of Prescription Drugs in the US Healthcare System
The ever-increasing cost of prescription drugs is a major economic issue driving significant change within the US healthcare system. This issue impacts not only patients struggling to afford medications but also strains the financial resources of insurance companies, healthcare providers, and the government.