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Cost of Healthcare

Cost of Healthcare

Sample Answer 

Cost of Healthcare

Compared to other OECD countries, the U.S. healthcare cost is estimated to be nearly one-fifth and one-third of its gross domestic product (GDP). According to Amadeo (2020), the country spent approximately $3.5 trillion in 2017 on medical costs, which was about 17.79 percent of its GDP. This dwarfs the $27.2 billion, which was roughly 5 percent of the GDP the nation invested in healthcare in 1960. The $3.5 trillion translates to about $10,739 per individual. Since 2014 and after the implementation of the Obama Affordable Care Act, the U.S. has been encountering a percentage increase in healthcare spending, including in areas such as physician fees, pharmaceuticals, and healthcare administration. For example, in 2014, 2015, 2016, and 2018, the country increased healthcare expenditure to $3.026 trillion (5.1 percent increase), $3.2 trillion (5.8 percent), $3.337 trillion, and $3.649 (4.8 percent), respectively. In 2018, the average cost of healthcare per person was $11,172, which is an increase from $9,515 in 2014 (Amadeo, 2020). The issues of high healthcare costs, low patient enrollment, and low quality of care are believed to be created by the country’s multi-payer system and can be addressed by a single-payer model.

Impact of the Issue on My Organization

High costs of healthcare have impacted healthcare access as well as healthcare outcomes, including quality of care. For my organization (Baylor Scott & White Medical Center), the most affected areas include physician fees, specialized treatment costs, pharmaceuticals, and healthcare administration costs. Each physician earns approximately $217,310 (Glassdoor, 2020), while a spinal procedure (CC/MCC), bowel procedure, and transient ischemia with thrombolytic agent cost as high as $350,139.27, $ 142,267.65, and $ 278,279.65 per patient (Baylor Scott & White Medical Center, n.d.). The outcome is that the hospital has registered few admissions (about 208,789), even with total assets worth $12.8 billion and approximately 800 patient access points (Baylor Scott $ White Health, n.d.).

How the Organization is Addressing the Issues of Increasing Cost of Care

Like other institutions, Baylor Scott & White Medical Center is addressing the high costs of care by trying to merge with other leading healthcare providers in the region. By merging, such as the one with Houston’s Memorial Hermann Health System, the hospital creates savings by spreading technology costs, lowering negotiating fees with physicians, and reducing costs of pharmaceuticals and other supplies via bulk buying (Schnurman, 2018). Regardless, this ambitious plan has not succeeded because Baylor Scott is profit-oriented.

Summary of the 1st Article: Health Care Spending in the United States and Other High-Income Countries

This study was conducted by Papanicolas, Woskie, & Jha (2018) to compare the factors that drive healthcare expenditure between the U.S. and the other ten developed nations. The researchers used a cross-sectional study design to analyze data between 2013 and 2016 from leading global organizations, such as OECD (Organization for Economic Cooperation and Development), comparing performance, types, and structural features of healthcare systems between the U.S. and other nations. The study revealed that the U.S. spends more (approximately 17.8% of its GDP) than other nations, which ranged between 9.6% (in Australia) to 12.4 (in Switzerland), even though the quality and types of services are the same. The high healthcare costs in the U.S. were associated with inflated provider fees, including physician fees, hospitalization costs, pharmaceutical prices, and so on.

Summary of the 2nd Article: Projected Cost of Single-Payer Healthcare Financing in the United States: A Systematic Review of Economic Analyses

This research was conducted by Chai et al. (2020) to explore the economic benefits of implementing a single-payer system in the U.S. in comparison to the existence multi-tier system. The researchers conducted a literature survey by analyzing past empirical analyses of 22 single-payer plans used for individual states or the entire country. The articles were searched and retrieved from Google Scholar, Google, PubMed, and other databases. The researchers found that about 86% of all the articles suggested that a single-payer system would lower care costs in the country within the first financial year, with both proposing this method as a long-term solution.

Health Issue/Stressor Being Addressed In Other Organizations

The high cost of healthcare is an issue affecting other large hospitals, such as Mayo Clinic, which is also facing the high cost of surgeries and specialized care, high costs of pharmaceuticals, as well as extreme physician fees. For example, Mayo Clinic’s Scottsdale branch costs an average of $44,175 to get knee replacement surgery (Mayo Clinic, n.d.). Unlike other hospitals, Mayo Clinic offers a 20% discount to insurers to lower the cost of care and allows other payment models, including out-of-pocket.

Summary of the Strategies used to Address Healthcare Costs

One of the strategies proposed by Chai et al. (2020) is the use of a single-payer system, which is believed to reduce care expenditures significantly while offering high-quality insurance. The idea is to substitute private insurers with a single public model. The researchers project a reduction of between 3% and 4% in healthcare costs.

How these Strategies might Impact the Organization

These changes might lower the cost of hospitalizations, surgeries, other medical procedures, pharmaceuticals, as well as physician fees. The reason is that the government will be a single planner, regulator, and insurer. There will be no room for for-profit-oriented insurance firms to inflate the prices of healthcare coverage. This might boost patient access to specialized care as well as healthcare outcomes, including quality of care.


In summary, it can be deduced that the high cost of healthcare in the U.S. is a major challenge that is impeding both access and healthcare outcomes. The problem is mainly caused by the multi-payer system that allows private for-profit insurers to exploit citizens by charging high fees. The solution is to implement a single-payer, government-sponsored, and control system that will likely eliminate private insurance.


Amadeo, K. (2020). The rising cost of health care by year and its causes. The Balances,

Baylor Scott & White Medical Center. (n.d.). Hospital pricing information. Retrieved from

Chai, C., et al. (2020). Projected costs of single-payer healthcare financing in the United States: A systematic review of economic analyses. PLoS One, 17(1). Retrieved from

Glassdoor. (2020). Baylor Scott & White Health Physician Salaries. Retrieved from,39.htm

Mayo Clinic. (n.d.). Estimate for knee replacement surgery, revision. Retrieved from

Papanicolas, P., Woskie, L. R., & Jha, A. K. (2018). Health care spending in the United States and other high-income countries. The Journal of the American Medical Association 319 (10) (2018):1024–1039

Schnurman, M. (9 Oct. 2018). Baylor wants a merger to cut costs, even as its main Dallas hospital tops all in profits. Dallas News,


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Cost of Healthcare

Break this paper into 9 strong paragraph

  1. Introduction: describe the national healthcare issue/stressor( COST OF HEALTHCARE)
    • Use statistics. You should be giving the statistics on health care costs over the last couple of years, the trends that can be observed, the area where the majority of the cost is incurred, who incurs the cost, the budgets allocated, individuals spending, average costs incurred by hospitals, the medical cover expenditure, etc. Include a thesis statement

      Cost of Healthcare

      Cost of Healthcare

  2. Impact of the issue on your organization: Go straight to the point. First, explain the areas where the organization is experiencing high health care costs. What are the indicators? How have the costs increased in the past? How has this affected patient health outcomes? Include numbers! If possible.
  3. How is the organization addressing the problem of increasing cost of care? Has it successfully reduced the cost? What challenges has the organization faced?
  4. Summary of the first article (It must be peer reviewed!)
    • It must be a peer reviewed journal article. Refer to this link if you do not understand what a peer reviewed journal article:
    • Who carried out the study?
    • Where was the study carried out?
    • Why was the study carried out?
    • What was the research design used
    • What were the findings of the study?
    • What are the limitations of the study?
    • What is the clinical implication of this?
  5. Second article It must be a peer reviewed journal article. Refer to this link if you do not understand what a peer reviewed journal article:
    • Who carried out the study?
    • Where was the study carried out?
    • Why was the study carried out?
    • What was the research design used?
    • What were the findings of the study?
    • What are the limitations of the study?
    • What is the clinical implication of this?
  6. Healthcare issue/stressor is being addressed in other organizations. What strategies are they using? How effective are they? Any examples? Evidence?
  7. Summarize the strategies used to address the organizational impact of national healthcare issues/stressors presented in the scholarly resources you selected
  8. Explain how they may impact your organization both positively and negatively. Be specific and provide examples.
  9. Conclusion

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