Financial Issue - Assignment Example

Financial Sustainability In Health Care Affiliation] Financial Sustainability In Health Care Key Issues Facing Healthcare Financial Sustainability The Cost of Health Care Unlike in the past, health care today is very expensive. 50 years ago, insurance was purchased on individual basis. Due to high cost today, people pool resources so that they may be able to cover themselves against losses. In the past people could afford to protect themselves and their entire family against catastrophes. Another case that shows how health care has become expensive in comparison to the past is the statistics that, in the pas people could afford to make payments from their pocket, whilst most of the payments are made from public funds such as funding from federal, state or local government programs.

National Health spending Health care spending has grown in the recent years at rates which are alarming. For example in 2008, US had an expenditure of $2.3 trillion. It was projected to reach $2.9 trillion by 2012, accounting for 17.2% of GDP. If the spending of the health care sector grows at a faster rate than the other sectors of the economy, it reaches to an extent where other vital goods and services of equal importance, may not have a chance against the health care (Sharon B. & Nancy S., 2012). Fiscal Sustainability / Balance Another issue facing financial sustainability is the constraints relating to the inability of the government to meet the financial obligation of the health care sector.

Since the costs in relation to health care sector are rising at a high rate, the government is being put in a strain situation when budgeting. Solutions to the Above Challenges The government needs to come up with more resources to finance health. Health care financial sustainability is a question of the ability of the government to pay for health, that is whether the government is able or not provide for health care expenditure. If it’s well able to pay for health, it, however, has to consider the aspect of opportunity cost in relation to cost of not spending on other things.

If people realize more gains from these other government spending (except health care), they may opt to devote more resources to health, in an attempt to keep those other gains (Sarah Thompson et al ,n.d, p. 2). In as far as health care spending is concerned; there is a need to reduce this amount. In reducing the government spending on health care, the aim should be to reducing coverage in such a way that other objectives are not undermined (Hofmarcher & Maria, 2008). Policy makers need to understand the fiscal challenges facing sustainability of health care.

This problem is more than just an accounting problem. If it was the obvious solution would be reducing the spending in question by reducing coverage. Policies needs to be formulated with an aim of reducing coverage at the same time enhancing value and taking great care to avoid imbalance in equity (Sarah Thompson et al, 2009). References Hofmarcher & Maria M. (2008). Ensuring Financial Sustainability For Health Care. Retrieved from Sarah Thompson, Andres Vork, Triin Habitch, Liis Roovali, Tamas Evetovits & Jarno Habicht. (n.d).

Responding to the Challenge of Financial Sustainability in Estonia’s Health System. Retrieved from Sarah Thompson, Tom Foubister, Joseph Figueras, Joseph Kutzin, Govin Permanand & Lucie Bryndova.(2009). Addressing Financial Sustainability In Health Systems.retrieved from Sharon B. Buchbinder & Nancy H. Shanks. (2012). Introduction to Health Care Management.(2nd ed.). United States of America, USA; Michel Brown. Print.