Article Critique Based on Peer-Reviewed Articles Assessment Answer

ELIS RP, MCGUIRE TG SUPPLY-SIDE, AND DEMAND-SIDE COST SHARING IN HEALTH CARE.

Introduction

The Health Care Financing Administration (HCFA) has adopted the policy of paying hospitals for patient care services in 1983. In the United States, this medical program is the largest buyer of medical care. The aim is to facilitate the care services of hospitals and to share the medical allowances of the customers. The program was fully established in 1987, and the system follows the procedure of paying bills to hospitals based on the diagnosis-related group (DRG).  Some payers involuntarily follow the Medicare leads. (Koch-Weser et al. 2019)  The system is taking a turn; now, many states want customers to make hospital payments by DRG System. In this Journal of Supply-side and Demand-side cost-sharing in health care, the purpose of the authors is to explain cost-sharing at the demand side and supply side as well. (McGrail, et al. 2009)

According to the HCFA, Hospitals require to pay some marginal cost of medical treatment. The other issue discussed by the authors is that the more insured the customer is, he will have financial security but more prone to efficiency loss in medical treatment. (Ellis, et al. 1993) The fact lies in the point that hospital authorities can handle risk more quickly than every single patient. Therefore the authors explain cost-sharing at the supply side can be linked with incentive. However, journal has only given details on the cost sharing aspect of the hospitals, and less on the medical insurance services in scene. (Dixit, et al. 2018)

Argument

According to the viewpoint of the authors, hospital agencies bear the marginal cost of the treatment offered, and the patients get the marginal benefits. It is the doctors' role to take notice of the marginal cost and marginal benefit of the treatment and balance the same. (Ellis, et al. 1993) Next, if the patient pays the prospective amount, then the hospital will make profits. With the implementation of the DRG System, the payment criteria of the patient are reduced to the diagnosed problem as compared to the supply response system.  Well, the authors say, education in the payment criteria will reduce the hospital services; thus, the payment system's gains are transferred from the hospital authorities to the patient. (Ellis, et al. 1993) Physicians make sure that the services provided must equalize the marginal cost and benefits. The authors here advocate certain other aspects depict the hazards of prospective payment. Hospitals are in an extreme bargaining level; they will offer minimum treatment services to increase the hospital's net revenue. (Ellis, et al. 1993) As per the author, such extreme situations are unlikely to occur as the market is sufficiently competitive. The journal clearly states the cost aspect faced by the hospitals, but missed discussing the health care system as whole, facilities to different patients, equality in treatment and cost bearing systems. (Levesque et al. 2013)

Discussion

In this Journal of Ellis RP, McGuire TG, there are two facts included, demand-side sharing of cost and supply-side sharing of cost. But all this lack the health policy system in the country and the role of consumers. In demand side sharing, patients tend to pay more amounts in co-sharing of payment. And in the latter one, it involves altering the health care workers' incentive to add specific services. (Ellis, et al. 1993) Here the role of the financial system related to the health care center is in light. As per the authors, the primary aim of the financial services is to support the consumers in reducing the burden of health care costs.  (Dugdale, 2020)

It ensures fair dealing among the patients and the health care institution by sharing the cost of health services. Another main aim of financial companies is to help the patients in availing the best and expensive medical facilities. After the completion of the paper in 1993, the Clinton Health care proposed specific reforms that include. The medical insurance slot will involve the participation of employers in the health insurance system. Several factors increase the cost of hospital costs. One of them is market competition.  As per author the patients do not go along different medical services providers. (Ellis, et al. 1993) This unforeseen admissions in the hospitals often increase the health care services cost, and the decision of how long the patients stay in the hospital lies in the hands of Doctors. Such cases demand the hospital authorities compete for the physicians more likely. (Hancock, 2020)

Offering the best salary and latest medical types of equipment is the best way to appoint the best physicians, as they will further help cover the medical cost of the hospitals. According to the authors, the cost-based reimbursement system often covers the maximum cost of the hospital and provides health benefits to the patients. (Ellis, et al. 1993) In this case, both hospital authorities and the patient continue the treatment as the benefits to both the parties are positive. Thus the best physicians often likely to increase hospital profit. Whereas in the situation or prospective payment, the circumstances reverse as the hospital authorities go for such doctors whose patients require fewer hospital services of room and other assistance. (Morrato, et al. 2007)

According to the journal, physicians tend to focus more on reducing the hospital cost and give less importance to the patient's benefit. The reason is only those customers that have fewer service costs are suitable to the hospital in the prospective payment system. Further, in the cost-based reimbursement system, the purpose of the hospital authorities is to attract all types of customers irrespective of the cost factor. The Journal illustrates that utilizing health capacity mechanism help in reducing the hospital cost and further helps in providing the best services. Authors’ discussion additionally helps in increasing the profits of the hospital. In the perspective payment strategy, the strategy is not to provide a high-quality service as it reduces the hospital's short-run profits and increases the cost graph. The authors in the article are clear about the different practices of the hospital authorities and the competition therein. (Ellis, et al. 1993) The journal clearly explains the idea of cost management, but hasn’t picked different health policy to benefit patients financially. (Blank, et al. 2017)

The journal has given a brief view of medical system in the country, but there are still number of points need to cover. The focus is how hospitals try to balance their cost and revenue, at the same time, likely to provide the best medical facilities to the patients. The authors are trying to demonstrate the role of the physician in providing the services to the patients. The model depicts the cost-sharing role of the provider underlying the prospective payment system. (Ellis, et al. 1993) Here the physicians are the main decision-makers to maintain the balance and reduce the cost of the hospital. There are number of health insurance schemes that favor the hospitals and the patients. Authors did not involve such schemes to reimburse the hospital cost. Journal lacks proper evidence to demonstrate the medical system. (Mossialos, 2015)

Conclusion

The Journal is about prospective payments that result in the supply side and demand side sharing of cost. This further helps in the efficient supply of health care services. The setting is valid until the physician is in its best role in balancing the patient's benefit and the hospital's financial policy and interest. The authors illustrate that the incentive in sharing the supply-side cost is beneficial until the time physicians are providing the best health care services to the patients. (Ellis, et al. 1993)

If physicians are giving more importance to the hospital's profit, then this will lead to the undersupply of health care services. The article is about explaining the incentive model on prospective payment, but lacks detailed aspect of different medical policies. Is the supply cost-sharing beneficial for the consumer? The system compares the welfare standards offered by the supply response and the demand response—further, which cost-sharing is beneficial for both the hospital authorities and the patient. As per the authors, welfare response of the supply side must be as great as the demand side. (Ellis, et al. 1993) The focus here is to identify the imperfect agencies and to moderate the incentives that will further lead to enhance the medical service, but the journal lacks information of medical system at glance. (Eagar, et al. 2020)