SWOT Analysis and Cost Benefits Analysis
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| Your SWOT Analysis will include one strength, one weakness, one opportunity, one threat, and your summary conclusion. Describe and discuss each answer thoroughly. As a minimum, each answer should be a well-developed paragraph of FIVE or more sentences. |
| Strength: Reduction of Unnecessary Spending |
| Explain: Cutting Medicare and Medicaid will assist in reducing unnecessary spending in the healthcare sector and for the government. Additionally, the budget plan would help in reducing unnecessary spending by altering how consumers and patients pay for health services. Correspondingly, Dawson, and Cutler (2020) state that the government plans the cut to do away with a commercial bias that currently esteems only healthy working individuals than the actual vulnerable. Additionally, the government also argues that Medicare and Medicaid budget reforms would save finance by using sufficient price transparency, terminating surprise bills, and reducing the prescription of drug costs. The government also argues that the proposal would concentrate on the actual vulnerable. What is more, Zuvekas (2020) affirms that the 2021 budget would change forms of payment to healthcare facilities, which would save more money. Specifically, the author attests that an estimated amount of $117 billion would be saved over the next decade by merely ceasing the practice of paying healthcare institutions above the doctor’s office for similar services. The author also states that patients have for long tabled complaints concerning price disparities. The budget change would also encourage hospitals to make patient transfers to other healthcare facilities. Liao et al. (2020) confirm that Medicare and Medicaid spend an extra $ 40 billion yearly due to mistakes by healthcare providers. Additionally, the past five years have seen Medicare and Medicaid spend an approximate value of $ 200 billion due to these errors. However, concerned agencies like the Department of Health and Human Services (HHS) and Congress have failed to tackle this massive loss in the health sector. Accordingly, Liao et al. (2020) attest that the most effective way to deal with this pandemic is by reducing yearly Medicare and Medicaid spending. In light of MODEL (2020), Congress created The Recovery Audit Contractor (RAC) under the Modernization Act of 2003 (MMA), given the duty of recovering improper Medicare payments given to healthcare organizations under FFS (Fee-for-Service) Medicare programs. However, provider entities like the American Hospital Association (AHA) spent colossal amounts of cash to pressure Congress to dismiss the services of RAC. These efforts of pressurizing Congress became successful, and thereby healthcare providers continue to wrongly pocket billions allocated for Medicare budget. |
| Weakness: Increased Cost of Healthcare |
| Explain: The increased cost of healthcare would rise since Medicare and Medicaid programs have in the last years covered the aged, disabled, and individuals having low incomes. According to the information detailed by Oberlander (2019), Republicans reason that having cuts in Medicaid and Medicare would only affect doctors and health institutions directly. This notion, on the other hand, implies that beneficiaries will have an indirect impact that is consumers and patients. Correspondingly, one instance of the negative effect of cutting of the costs would be terminating the “donut hole” in Medicare Part D recommendation drug scheme, planned to happen by the end 2020, under ACA policy. Donut hole denotes the amount of recommendation medicine prices Medicare recipients need to pay out-of-pocket, for example in 2017, these expenses amounted between $ 3,700 and $ $4950 per patient. Blancato (2017) states that nearly one in five Americans rely on Medicare and Medicaid processes. Additionally, Federal policy requires Medicare and Medicaid programs to also cover for pregnant women. What is more, two important reform proposals for Medicaid are to stop block-grant in different states and impose per-capita expenditure bound on the scheme. These reforms, therefore, have dangers for the recipients who entirely rely on these programs. Altering Medicaid to block grant presents an unparalleled degree of limitation to States to decide services covering and which to eradicate. Additionally, it also makes individual States have less finance to operate on. This notion therefore implies that State government will have negative impact from the budgetary cuts of Medicare and Medicaid. Correspondingly, Trump administration suggested a policy for the State governments in November 2019. This rule requires State governments to alter how they fund Medicaid services. The policy also required State governments to eliminate certain financing options that have been accessible before. Thus, this policy would interfere with States’ budgetary planning and leading to interference of other services. Fewer funds imply more questionable choices on whom to shelter – for instance, a pregnant woman, a disabled person, and an adult requiring extended health care support. Health institutions would also lose their patients since, most of them would not be able to afford the high costs of drugs and medication due to their states. |
| Opportunity: Promotion of Cost-Saving Contest among Healthcare Providers |
| Explain: 74 million and more Americans depended on the services of Medicare and Medicaid in 2017. And, this population is expected to increase with time, since aging populace is on the rise. Therefore, preserving Medicare and Medicaid would mean limiting spending to control the entire budget. Additionally, saving Medicare would also necessitate cutting its full costs. Medicare and Medicaid debts are in increase and this may affect other operations offered by the government like security and education, amounting to billions of dollars, and the working population is on a shrink while the aging beneficiary is on the rise. Therefore, this calls for the immediate cutting of the budget to safeguard the entire budget. Johnson and Kishore (2019) state that having the proposal passed would ensure that more real victims get covered within the programs. Additionally, the author says that the budget would raise revenues plus enhance spending without swelling the deficit percentage in the next decade. Over the past decades, federal spending on healthcare has been on the rise. And, with this trend, private-sector health costs are projected to be on the increase, therefore, burdening businesses and households. Correspondingly, cutting Medicare and Medicaid costs will lead to unnecessary health institution spending and readmissions. The pilot schemes would, therefore, assist health institutions better manage their care and deliver cost-efficient care by payment bundling. Addressing Medicare and Medicaid cuts would also have an impact on private insurers plus profit-driven health agencies. Public insurers are the most effective having administrative costs at around 3 percent, notwithstanding that they cover vulnerable populations. On the other hand, the executive price of private sectors is 15 percent higher than public institutions, thereby creating an imbalance within health institutions. In light of Oxford Analytica (2020), private health insurers denote the financial organizations created to make profits by denying and limiting access to health care. Additionally, Oxford Analytica affirms that these organizations add no value to the healthcare system due to their corrupted financial operation causing all insurers to adapt to their practices to survive in the business. Patient and healthcare organizations, thus, face all the difficulties of paying higher prices for medicine and general healthcare. Fernandez-Reiss (2019) states that cutting Medicare and Medicaid would create fair competition, after doing away with the private profit-generating institutions. |
| Threat: Limitation of healthcare coverage |
| Explain: Reduction in Medicare and Medicaid costs would limit the strength of the programs. This notion implies that even the number of people depending on Medicare and Medicaid would drastically reduce. Moore et al. (2020) state that cutting Medicaid and Medicare in the budget would imply that the majority of the seniors would lose access to their favorite health personal. The author also affirms that the budget would also necessitate states to produce work requirements for every Medicaid patient. Nearly two-thirds of Medicaid recipient adults who work as part or full time. Additionally, other recipients don’t work due to different conditions, for instance, chronic illness plus physical limitations. This notion implies that qualified individuals may lose health coverage if they forsake to meet the requirements of the bureaucracy. Therefore, if one fails to provide the required work documents, they would be scrapped off from the plan, thus making them unable to meet healthcare services. For instance, after releasing the budget proposal, the federal appeal court held that HHS had no right to force individuals to work to qualify for the services. This happened after approximately 18,000 recipients of Medicare and Medicaid lost coverage since they lacked work requirements. What is more, some doctors would not be willing to accept patients under the Medicare and Medicaid plan since the programs would be offering little payment than other private insurers. This step would, in turn, affect the elderly, disabled, and children who are the primary beneficiary of the scheme. Robertson-Preidler et al. (2020) affirm that the work requirement proposal on the budget would force Americans off the Medicaid scheme. This would also enhance the nation’s uninsured rate. Additionally, Chip Kahn, the CEO of the Federation of American Hospitals, stated that cutting Medicare and Medicaid is the worst step at this time since the majority of Americans depend on them. The CEO also attests that cutting the budget on healthcare would negatively threaten the care providers. For instance, initiating the budget would make healthcare work tiresome for health providers due to less income. Additionally, Rick Pollack, the CEO of the American Hospital Association, stated that cutting the budget would harm innocent individuals; specifically, the programs entail 43 percent of children. What is more, Blumberg and Holahan (2019) states that reduced healthcare coverage would create pressure to government operations. For instance, cutting Medicare and Medicaid costs would require the government to create effective solutions that would be positive from the beginning of its operations. In addition, this would create a huge pressure to the government to meet healthcare institutions’, consumers’ and patients’ demands. Pressure on government operations would then lead to using additional resources and time to implement their effective solutions that would be of benefit to consumers, health institutions and patients. |
| Cost-benefit Analysis: Limitation of healthcare coverage. |
| Explain: SWOT analysis has detailed effects of cutting of Medicaid and Medicare costs by Trump administration to consumers, patients, healthcare institutions and government operations. The most dominant quadrant therefore addressed in cost benefit analysis is the threat, which denotes, limitation of healthcare coverage. As stated above, threats to cutting Medicare and Medicaid are drastic in different perspectives, for instance, ethically, economically, socially and health wise. To begin with, cutting Medicare and Medicaid would have drastic economic effects, for instance, cut in healthcare spending and physician’s pay (Yu & Zhang 2017). This step will therefore lead to increased ramifications, plus reductions in payments and would note negative effects on general healthcare sector in the country. Additionally, With the proposed cuts, the government will spend less on Medicare and Medicaid, thus cutting their costs would also interfere with monetary status of health facilities. Also, the States would reduce their expenditure on healthcare. What is more, patients and customers would be expected to spend from their pockets to acquire certain medication services. Secondly, one of the health consequence is reduction in quality healthcare for individuals covered under Medicare and Medicaid. Cutting Medicaid and Medicare would mean reduced benefits to seniors, disabled and those living below the poverty line. These individuals will therefore not be able to have access to their preferred doctors and physicians due to lack of finances. Also, it denotes that the patients will have access to doctors based on their level of finances and not based on what services they require. Thirdly, Gostin (2017) states that one ethical requirement in healthcare is choice. In light with this, the author implies that patients who make their own choices indicate positive health outcomes. In practice, the patient will be more comfortable with his or her doctor and chosen hospital. Making decisions for the patients is therefore an unethical step. Cutting of Medicare and Medicaid thus will force its dependents not have access to certain facilities and health personnel of choice. Lastly, one of the social effects of reduced healthcare coverage is increased poverty levels among the victims (Hodgkinson et al 2017). Poverty relates with poor health patterns. Poverty therefore is a cause plus impact of poor health. For instance, poverty enhances chances of poor health. Drastic health in return traps communities in poverty. Infections would kill and dwindle millions dependents of Medicare and Medicaid due to lack of care.
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| References Blancato, B. (2017). Why significant Medicare and Medicaid cuts are likely. Forbes. https://www.forbes.com/sites/nextavenue/2017/12/12/why-big-medicare-and-medicaid-cuts-are-likely/#5c78077f23d8 Blumberg, L. J., & Holahan, J. (2019). The Pros and Cons of Single-Payer Health Plans. Dawson, W. D., & Cutler, J. (2020). Addressing long-term services and supports reform via Medicare. Yes, Medicare, that post-acute care program. Journal of Aging & Social Policy, 32(2), 108-124. Fernandez-Reiss, J. (2019). Wealth over health? (Doctoral dissertation, University of Central Florida, Orlando, Florida). Gostin, L. O. (2017). Five ethical values to guide health system reform. Jama, 318(22), 2171-2172. Hodgkinson, S., Godoy, L., Beers, L. S., & Lewin, A. (2017). Improving mental health access for low-income children and families in the primary care setting. Pediatrics, 139(1), e20151175. Holahan, J., McMorrow, S., & Urban Institute. (2019). Slow growth in Medicare and Medicaid spending per enrollee has implications for policy debates. Robert Wood Johnson Foundation. Johnson, M., & Kishore, S. (2019). Laboratories of democracy: Health care reform platforms in the 2018 governor elections. American Journal of Public Health, 109(2), 225-226. Liao, J. M., Pauly, M. V., & Navathe, A. S. (2020). When should Medicare mandate participation in alternative payment models? Health Affairs, 39(2), 305-309. Model, C. F. A. (2020). Medicare Medicaid capitated financial alignment model reporting requirements. Contract. Oberlander, J. (2019). Navigating the shifting terrain of US health care reform—Medicare for all, single-payer, and the public option. The Milbank Quarterly, 97(4). Oxford Analytica. (2020). US Republicans will avoid health reforms pre-2020. Emerald Expert Briefings, (oxan-db). Robertson-Preidler, J., Trachsel, M., Johnson, T., & Biller-Andorno, N. (2020). The affordable care act and recent reforms: Policy implications for equitable mental health care delivery. Health Care. Yu, J., & Zhang, Y. (2017). Comparison of Single-Payer and Non Single-Payer Health Care Systems: A Study of Health Administration Efficiency. Modern Economy, 8(6), 816-833. Zuvekas, S. H. (2020). Financing of behavioral health services: Insurance, managed care, and reimbursement. In Foundations of Behavioral Health (pp. 71-99). Springer, Cham.
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