Economic Factors In Health Care

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Health care is described as the maintenance or restoration of health by the treatment and prevention of disease, especially by trained and licensed professionals. Health care generates significant costs for the industry itself and for patients. There are many economic factors that can, and do affect health care costs. Actual costs affect the patients as well as various areas of health care, some of which include insurance companies, and government health care programs. Therefore, economic factors such as Hospital Acquired Conditions and Medicaid Managed Care have a great impact on the potential for profit and loss of many hospitals, insurance companies and managed care organizations. Hospital Acquired Conditions The Medicare program is burdened significantly by Hospital Acquired Conditions (HACs). According to Kandilov, Coomer, & Dalton, Preventable hospital-acquired conditions (HACs) often result in additional medical care costs, generated both in the hospital stay during which the preventable occurs (the “index hospitalization”) and in subsequent health care encounters that might not have been necessary, or might not have been as …show more content…

The formula that determines the penalties, authorized by the Patient Protection and Affordable Care Act, gives hospitals a score from 1 to 10 and is based largely on rates of hospitals ' central line-associated bloodstream infections and catheter-associated urinary tract infections. (Clark, 2014). Therefore, hospitals have an incentive to utilize guidelines that will help to prevent HACs which will result in penalties. This is one of many economic factors that hospitals can control in an attempt to manage health care costs. The prevention of HACs also assists the insurance companies by decreasing the amount of health care services that they will have to cover for the patients that they

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