Health Services Financing



Health Services Financing

Healthcare financing and its impact on the healthcare delivery system

In its broad sense, healthcare financing refers to the application of various mechanisms through which individuals can pay for their healthcare. As well, healthcare financing may be defined as the range of concepts of insuring, paying and financing that permit the mobilization and the allocation of funds to diverse population groups in order to pay for healthcare. As such, the impact of financing on a healthcare delivery system is to influence the access to healthcare services among the people. As well, it influences the expenditure and the supply factors on a healthcare delivery system (Paolucci, 2011).

How the United States can decrease Healthcare cost

For a long time, the total cost of healthcare in the United States has been rising. A significant part of this problem has been the use of increasingly costly drugs. In the view of this, one way that the United States may decrease healthcare cost is by making prescription drugs affordable and available so that consumers can easily afford them. Ideally, regulating drug prices would be a great policy change for the nation in the sense that it would enhance social equity, promote economic development and support public health.

General concepts of insurance

Insurance refers to a contract in which an insured enters into a contract with an insurer whereby the insured agrees to pay a premium in return for protection against the occurrence of an event that may lead to loss that has been covered by the policy. The general concepts of insurance are as follows; the insured and the insured must give clear information about the terms of the contract, the contract must carry some financial gain, the insurer must restore the insured to his or her previous position prior to the occurrence of an insured event, and the insurer must not profit from the contract if the risky event occurs.

Scenario: The advice you would give to your coworker about choosing an insurance plan

Having an insurance cover guarantees an insured against financial loss in case an event for which the cover is taken occurs. As such, I would begin by advising the employed coworker to choose the plan that takes into account her immediate family needs. In this case, she ought to the plan that provides cover for her daughter’s autistic condition. She should choose the plan that covers the routine health needs, the medication and counseling needed for her daughter. As well, she should consider the plan that provides cover for long-term care and other specialized care privileges for her daughter.

Pay-for-performance and its objectives

Pay-for-performance is a value-based pay strategy in which the evaluations of organizational and individual performance carry a significant effect on the pay increases that are awarded to each worker. Some of the main objectives of the pay-for-performance pay strategy are as follows; the strategy helps a company to not only recruit but also retain the best workers, it engages employees to ensure organizational success, rewards creative employees, and enhances the objectives, goals and the values of an organization (Roussel, Swansburg & Swansburg, 2015).

Provisions made by the U.S. federal government for providing health care to military personnel and to veterans

Over the years, the demand for military medical care has been increasing causing the federal government to take various initiatives in order to provide healthcare to not only the military personnel but also to the veterans of the U.S. armed forces. As such, the federal government established the Tricare program, which is a health insurance program designed for the healthcare needs of the military personnel and their dependents, survivors and former spouses, and it entails three plans as follows; the Tricare Prime plan that provides a health maintenance organization option, the Tricare for Life plan that provides a Medicare supplement option for eligible retirees and the Tricare Select plan that is the preferred provider option (Mendez, 2018).

Relationship between uncompensated care and cost shifting and the reason providers have limited ability to shift costs

Uncompensated care refers to the amount of care that healthcare providers often write off as a result of providing care to patients that are not able to pay for healthcare services. As such, healthcare providers may prefer to shift costs, that is, increase the amount they charge the patients that are able to pay for healthcare or accept lower profit margins for providing healthcare services (Wilensky, 1984). Therefore, the relationship that exists between uncompensated care and cost shifting is the fact that the former focuses on writing off the amount of care that is given to patients that are unable to pay, while the latter is a strategy of compensating or minimizing the extent of losses arising from the write off. Currently, providers have limited ability to shift costs since potential reimbursements and capitation have eaten away the profit margins that are derived from cost shifting thereby making it difficult for them to continuously provide uncompensated care through cost shifting.


Mendez, H. B. (2018). Medical Care: Frequently Asked Questions (CRS Report No. R45399). Retrieved from Congressional Research Service website:

Paolucci, F. (2011). Health Care Financing and Insurance Options for Design (10th ed.). Berlin, Germany: Springer-Verlag.

Roussel, L., Swansburg, R. C., & Swansburg, R. J. (2015). Management and Leadership for Nurse Administrators (4th ed.). Sadbury, MA: Jones & Bartlett Learning.

Wilensky, G. R. (1984). Solving Uncompensated Hospital Care: Targeting the Indigent and the Uninsured. Health Affairs, 3(4), 50–62. doi: 10.1377/hlthaff.3.4.50

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