Question

Analyze economic principles that are driving the shift from volume-based health care to value-based health care. Then, evaluate implications of this volume to value shift. Provide an example of how this shift has affected how you work or how you or a family member has been treated for a medical condition.

Answer 1

Based on the several economic principles current economics are shifting towards volume based health care to value based health care. The demand of total health care was steadily growing and also in the market the high quality health care shortage was clearly observed. This kind of shortage was taken placed due to the high demand and low supply and this has pushed the prices of health care.In the USA the shortage of quality health care was very high and simultaniously the businesses have been priced out of being able to afford care. Measuring the quality of hospital care is difficult and requires methods to validate the measures of quality, which is a major challenge. Macroeconomic drivers have been decreasing incomes, the weak economy and higher levels of unemployment. In this scenario the volume based health care volume was purposely being mantained at low, so that rate hikes could be implemented. This means there were increases in the price of health care. The increase in price of health care manifested itself in several ways. So the current economics are strategically moving from volume to value.

Ex: Limited coverage was given to the insurance policy holders and they were denied insurance cover, if they had any pre-existing condition. The new payment structures created have been drivers for delivering value based care.