United States Insurance and Pharmaceutical Industry Essay essay

UnitedStates Insurance and Pharmaceutical Industry Essay

“IsMarket Design Driving Down Health Outcomes, and Increasing Cost ofHealthcare?”

“IsMarket Design Driving Down Health Outcomes, and Increasing Cost ofHealthcare?”

Carbaugh(2013) offers invaluable insights on how public institutions focus onthe economics of their businesses at the expense of members of thepublic. This paper discusses the situation of the healthcare sectorof the United States, and how it relates to the concept of economics.Special focus is given to the subject matter of healthcare insuranceand the way market forces form a major drive behind the healthcareindustry of the United States. Indeed, one cannot decline to notethat the aspect of affordability of healthcare forms a major point ofconcerns for people in not only the United States but also all aroundthe world. In recent times, especially under the Obamaadministration, the issue has been subjected to much debates amongstakeholders and different players in the healthcare industry. Animportant point to reckon with is that a significant number of UScitizens live without any forms of health insurance or cover. Thissituation is made even worse by the fact that the nation`s “healthcare is by far the most expensive in the world” (Gawande, 2009). Assuch, a good number of Americans, among them, the president of theUnited States, Barrack Obama, have been involved in initiatives ofpushing to ensure that the government facilitates health insurancefor all citizens of the country. So far, some developed countries inthe world have managed to achieve this important objective theseinclude but are not limited to Switzerland, Canada, Germany, Japanand the United Kingdom.

Gawande,(2009), indicates, “In Washington, the aim of health-care reform isnot just to extend medical coverage to everybody but also to bringcosts under control.” The author goes ahead to state, “Thefinancial burden (of healthcare) has… bankrupted millions offamilies, even those with insurance.” From this information, theoverall market plays a crucial role in the determination of coststhat are incurred by the citizens in realizing desirable healthcare.Nevertheless, some people key players in the market, usually fail tooffer support for a universal healthcare plan for the country. Theymaintain that such an approach would necessitate some meticulousmechanisms of budget controls, over and above necessitating thegovernment of the United States to come up with decision makingmechanisms that determine if or when an individual should be offeredcertain healthcare services. Even so, and owing to readings ofCarbaugh (2013), it is important to evaluate ways in which thebenefits outweigh the costs. For the most part, the opposers of auniversal healthcare claim that such an approach would lead to lowquality of healthcare services, increased taxes on the people anddelays in delivery of the crucial services. However, more reforms forthe healthcare industry in the United States will have to ensure thatproductivity of suppliers and other players in the market is notcompromised altogether.

Thenagain, the rising costs of healthcare in the United States have anoticeable impact on life expectancy in the country. Gawande (2007)observes that the other developed countries that have adopteduniversal healthcare cover for their citizens have managed toincrease life expectancy concurrently with healthcare costs over theyears. Even so, the United States has recorded the lowest increasesin life expectancy despite having the most increases in associatedcosts of healthcare. Gawande, (2007) notes, “In 1975, the UnitedStates was close to average in healthcare cost and last in 15-yearsurvival for the 45-year-old men. By 2005, its costs had more thantripled far surpassing increases anywhere, but the survival numberwas still last.” Without any doubt, this information, even more,indicates that there are other market-based reasons for the risingcosts, over and above the actual healthcare needs of the populace ofthe country.

Undeniably,insurance healthcare companies, both public and private, have beenunable to achieve provision of desirable, affordable and low-costhealthcare services to the citizens of the country that need them themost. In particular, the middle-class people and the working poorhave been hit the hardest by the expensive healthcare situation inthe United States, being required to reach to their pockets even incases where they have health cover (Washington, 2011). Marketmechanisms are also observed in the sense that these insurancecompanies seem to contend with each other for customer preference ofchoosing a healthcare provider company. This endeavor of selectinghealthcare insurance companies is also and largely practiced by othercompanies, which employ the members of the public. Reich (2010)however notes, “Employers are cutting on payrolls. Many people are,therefore, buying individual policies, but tend to be older andsicker. Young and healthy Americans are going without insurance,hence do not subsidize the costs of fellow policyholders.”

Whatmost of the American do not know is that the healthcare insurancecompanies are exempted from federal anti-trust laws, allowing ahandful of them to dominate the marketplace and thrive at the expenseof the citizens (Reich, 2010). The situation in the United Statesneeds to take after those in other countries in Europe. As Gawandeputs it, “European countries ranging from the Netherlands toSwitzerland to Germany… offer worldwide coverage through numerousprivate insurers and spend less…” The author goes ahead toindicate the situation in Switzerland, wherein the government offerscash subsidies to needy people that have their health insurance equalto or higher than 8% of their income.

Accordingto The Becker-Posner Blog, “The Swiss health care system hasseveral important properties that I (and many others) have beenadvocating should be incorporated into any reform of the UShealthcare system.” For instance, healthcare cover owing toemployment in Switzerland is not subject to forms of special taxbreaks on the other hand, the system in the United States isestablished on the mentioned tax breaks. Overall, the healthcaresystem of the United States, “where over 40 million persons have nohealth care coverage,” (The Becker-Posner Blog) ought to take afterthose in Europe. This is in addition to focusing more on thewell-being of the people as opposed to economic gains of theindustry.


Carbaugh,Robert J. 2013.Contemporaryeconomics: an applications approach.ME Sharpe.

Gawande,Atul. 2007. The Obama Health Plan. The New York Times. Onlinehttp://www.nytimes.com/2007/05/31/opinion/31gawande.html?_r=0

Gawande,Atul. 2009. The Costly Conundrum: What a Texas town can teach usabout health care. Onlinehttp://www.newyorker.com/magazine/2009/06/01/the-cost-conundrum

Reich,R. (2010). Bust the Health Care Trusts. The New York Times. Onlinehttp://www.nytimes.com/2010/02/24/opinion/24reich.html?_r=0

TheBecker-Posner Blog. “Is the Swiss Health Care System a Good Modelfor the US?” Onlinehttp://www.becker-posner-blog.com/mt/mt-tb.cgi/1859

Washington,H. A. (2012). DeadlyMonopolies: Shock of Corporate Takeover of life and the consequencesfor your health and our medical future.Anchor.