The Quasi Market System and Cost Cutting Measures

respond to the following discussion post with a response as a peer. Have at least 1 reference and 150-200 a word count. According to Shi & Singh (2019), the primary reason for unsuccessful regulations in health care costs is because system-wide cost controls are difficult to implement in a purchaser/provider or quasi-market system vs single-payer systems that can be controlled with national regulations.

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Reasons for escalating costs are intertwined in complex ways making it difficult to make singular changes without affecting other factors. Providers and managed care organizations can establish their own fees, creating competition from employers shopping for best rates and providers with favorable fee schedules. Additionally, there are portions of the market-based systems that are controlled by government regulations. To alleviate the loss of revenue or underpayment from the government-regulated portion, market-based plans may increase costs of other services to help offset. One example of this is the rising cost of prescription drugs. Medicare is unable to negotiate the price it pays for medication therefore manufacturers can set the price and this price may increase as they see fit (Mortimer, 2019). An example of this was the 500% increase in Epi-pen costs a few years back as well as insulin prices. The increased price is then passed on to the patient or insurance company. Another example of this is the constant changing of formulas used to calculate reimbursement rates. Companies can find a way to circumvent government regulations by changing the costs that they control. I personally think that regulations have also been unsuccessful because people like the idea of choice. Some resist government regulations that can set prices and contain costs because that means they would give up choice and, in some minds, their freedom. Others are skeptical because the government has not had the best track record at managing national programs and costs.

Mortimer, Sasha (2019). U.S. companies continue to pay more in healthcare as the cost of drugs keeps rising. Biospace. U.S. Companies Continue to Pay More in Healthcare as the Cost of Drugs Keeps Rising | BioSpace.

Shi, L., & Singh, D. A. (2019). Delivering health care in America (delivering health care in America: A systems approach) (7th ed.). Jones & Bartlett Learning.