Financial Burdens of Healthcare Today

Table of Contents


An essential element of the social and economic development of society is medical care. Healthcare is one of the leading service industries, so public expenditures on its development are not only of social but also of economic importance. The effectiveness of healthcare as a branch of the service sector lies in the fact that by protecting and restoring human health, it thereby contributes to a decrease in mortality rates and an increase in labor productivity. There has been a substantial growth in public expenditures toward healthcare, however, and today, health care spending in the U.S. accounts for more than 17% of the whole economy (Dieleman et al., 2016). This paper is set to discuss various factors that influence the financial situation around health care today.

Funding Sources and Reimbursement Methods

In general, there are three ways health care providers are paid for their services: government insurance programs, private insurance, and personal expenses. Funding for government insurance comes from the federal government, so virtually, from taxpayers’ money. In 2014, President Obama signed the Patient Protection and Affordable Care Act (PPACA) which was aimed to make insurance packages more available and affordable. Reimbursement methods are ways and procedures by which the providers, including doctors and hospitals, are paid for their services. For instance, after a doctor makes a prescription, they send a bill to whoever obliged to cover the costs. Insurance may not be enough to complete the payment, so the remaining part might have to be co-payed by the patient.

Economic Factors and Business Influences

Economic factors deprive many people of access to quality medical care. Most hospitals do not receive enough funding for executives to increase profit margins (Dickman, Himmelstein, & Woolhandler, 2017). Such a strategy, however, decreases the quality of provided services and increases the chance of human errors (Dickman et al., 2017). Insurance is still a privilege to the majority of the population because low-income families cannot afford it (Dickman et al., 2017). There is also an influence from pharmaceutical companies; driven by greed and desire for more massive profits, they tend to overprice their products and charge astronomical fees, thus putting the burden on ordinary citizens (Dickman et al., 2017). This situation can only be improved by increased government regulation.

Cost Containment and Role of the Nurse

As prices rise, employers seek ways of bringing down the costs associated with healthcare expenditures of their employees. Various cost-containment strategies are used to ensure the long-term financial security of the company. Among the many methods are increasing the demand for price transparency, searching for new technologically advanced healthcare delivery methods which are more affordable, such as Telemedicine, and managing population health (Kelly & Porr, 2018). Employers battling to reduce costs on one end and shareholders reducing hospital budget sizes on the other are putting pressure on ordinary nurses (Kelly & Porr, 2018). They are demanded to provide quality care, while resources are being taken away (Kelly & Porr, 2018). Within these circumstances, the role of the nurse is becoming even more critical because the quality of provided services is directly dependent on nurses’ energy and self-determination to help people. Nurse managers today also bear fiscal responsibilities such as proper budgeting, scheduling, and payroll. They, however, have to speak out more frequently to improve their practice environments and remove the stress generated by this situation.

Additional Issues and Ways for Improvement

There is a strong relationship between socioeconomic status and health outcomes because an ability to receive medication is determined by the ability to pay for those medicaments. PPACA was the first healthcare reform since the last century, but it is not sufficient to overcome all problems the American citizens are facing in terms of healthcare. This insufficiency is due mainly to PPACA’s complexity since insurance does not cover all costs (Dickman et al., 2017). People still have to pay deductibles, co-payments, and monthly premiums. Ideally, there has to be firm government control over pharmaceutical companies who are overcharging their products, and private hospitals who year-by-year are decreasing their spending to increase profit.


Healthcare industry in the United States today is as complex as it can get. There is no single solution to the problems because there are many arguing sides. Healthcare providers seek to increase their profit margins by shrinking the budget sizes, ordinary people demand lower prices because they are not able to afford healthcare, and pharmaceutical companies charge whatever they want because there is no regulation. Healthcare receivers, however, are not the only ones who are struggling in these circumstances. Budget cuts deprive nurses of necessary resources, and yet the list of their responsibilities keeps growing. Employers spend too much on their employees’ medical expenses, so they continuously search for ways of containing those costs. The U.S. government should develop proper intervention strategies to resolve the issues. As history suggests, the free market in the healthcare industry may not be as effective as it is in other areas of the economy, and regulations are the only way of achieving the goals. Healthcare must be the right of each human being, not a privilege of those who are in a comfortable financial situation.


Dickman, S. L., Himmelstein, D. U., & Woolhandler, S. (2017). Inequality and the health-care system in the USA. The Lancet, 389(10077), 1431-1441.

Dieleman, J. L., Baral, R., Birger, M., Bui, A. L., Bulchis, A., Chapin, A., Murray. C. J. L. (2016). US spending on personal health care and public health, 1996-2013. JAMA, 316(24), 2627-2646.

Kelly, P., & Porr, C. (2018). OJIN: The Online Journal of Issues in Nursing, 23(1). Web.

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