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Assessment 3: Business Case for Change

Student Name

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Capella University

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PX Course Name

Prof Name

FEB 1, 2024
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The Economic Challenge in Healthcare and its Potential
Consequences

The issue of healthcare economics is a pressing concern that impacts individuals, healthcare
providers, organizations, and communities at large. The lack of affordable healthcare insurance
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has significant implications for people's lives, extending beyond financial strain to encompass
broader aspects of health and productivity (McKinsey, 2022).

Individually, insufficient insurance coverage poses risks of financial strain and limited healthcare
access. For organizations, this issue may result in increased healthcare costs and decreased
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productivity as employees miss work due to illness or resort to costly emergency care.
Communities may experience the spread of infectious diseases and increased healthcare
expenses due to a lack of preventive care.
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Individuals without adequate insurance coverage may encounter financial strain and restricted
healthcare access in various ways (Peng & Zhu, 2021). For example, the absence of insurance
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necessitates individuals to bear healthcare expenses out of pocket, particularly burdensome for
those with ongoing care needs or chronic conditions. Consequently, individuals might delay or
forego necessary medical care, potentially resulting in more severe health issues later on (Peng
& Zhu, 2021).

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Organizations may bear the burden of providing healthcare services to uninsured individuals,
resulting in higher healthcare costs and possibly elevated employee insurance premiums
(Karpman et al., 2021). Moreover, reduced productivity becomes a significant concern, as
employees lacking insurance coverage are more prone to absenteeism due to illness or
resorting to expensive emergency care, negatively affecting organizational productivity.

The World Health Organization (WHO) underscores the undeniable impact of the healthcare
economic issue and emphasizes the need for action to improve access to essential healthcare
services, reduce costs, and enhance productivity through the provision of affordable healthcare
insurance (WHO, 2019). Therefore, concerted efforts are crucial to ensure universal access to

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affordable healthcare coverage, regardless of income or social status.

Feasibility and Cost-Benefit Analysis

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Addressing the economic issue of accessible and affordable healthcare insurance requires a
thorough consideration of feasibility and a cost-benefit analysis.

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Feasibility considerations involve assessing the practicality of implementing affordable
healthcare insurance, considering factors like the prevailing political climate, economic
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conditions, and resource availability (Illinois Government, 2021). The Affordable Care Act (ACA)
provides a case study, revealing that despite being designed to expand healthcare insurance
access, its implementation faced political opposition and challenges in some states (Campbell &
Shore-Sheppard, 2020).
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Considering the cost-benefit perspective, implementing affordable healthcare insurance

demands a substantial initial investment, but the long-term benefits include reduced healthcare
costs and improved health outcomes (King, 2020). Research indicates that the ACA's coverage
provisions led to a one-third reduction in the annual cost of uncompensated care for uninsured
individuals, demonstrating the potential for long-term cost savings (Karpman et al., 2021).
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Moreover, the ACA contributed to increased preventive care services, further supporting the
case for cost-effective healthcare solutions.
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Mitigating Risks to Financial Security

To mitigate financial risks faced by healthcare organizations, three potential strategies can be
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adopted:

Improve Cost Management: Healthcare organizations can enhance cost management by

negotiating lower prices for medical services and supplies, as well as by improving the efficiency
of healthcare delivery. This can alleviate financial strain and enhance organizational
sustainability (Sturmberg & Bircher, 2019).

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Diversify Revenue Streams: Exploring alternative revenue sources, such as grants or
partnerships with other healthcare providers, can provide a more stable financial foundation and
reduce dependence on fee-for-service models (Kosala & Heengama, 2019).

Implement Risk Management Strategies: Developing and implementing risk management

strategies, including contingency plans for unexpected events such as pandemics or natural
disasters, can help organizations navigate financial risks more effectively (Auditboard, 2021).

Evidence-Based Research to Support Strategies

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Evidence-based research and scholarly sources support these proposed strategies. For
instance, studies published in the Journal of Healthcare Finance and the Journal of Healthcare
Management affirm the efficacy of cost management strategies and revenue diversification in
improving financial performance and sustainability in healthcare organizations (Truong, 2022;

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Carney, 2020). Additionally, the Agency for Healthcare Research and Quality offers guidance on
risk management strategies in healthcare organizations (Sturmberg & Bircher, 2019).

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Conclusion PX
In conclusion, addressing the economic challenge of affordable healthcare insurance requires a
comprehensive approach, considering feasibility, cost-benefit analyses, and risk mitigation
strategies. Evidence-based research and scholarly sources provide valuable insights to inform
these strategies, contributing to the development of effective and sustainable solutions.
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References
Agency for Healthcare Research and Quality. (2021). Developing and implementing a risk
management plan: AHRQ patient safety network. AHRQ.gov.
https://psnet.ahrq.gov/primer/developing-and-implementing-risk-management-plan

Auditboard. (2021, February 18). 10 Types of risk management strategies to follow in 2021.
Www.auditboard.com. https://www.auditboard.com/blog/10-risk-management-strategies-2021/

Campbell, A. L., & Shore-Sheppard, L. (2020). The social, political, and economic effects of the

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Affordable Care Act: Introduction to the issue. RSF: The Russell Sage Foundation Journal of the
Social Sciences, 6(2), 1–40. https://www.jstor.org/stable/10.7758/rsf.2020.6.2.01

Carney, K. J. L. (2020). Practitioner application. Journal of healthcare management, 65(1),

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71–72. https://doi.org/10.1097/jhm-d-19-00237

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Georgetown University. (2019). Cultural competence in health care: Is it important for people
with chronic conditions? – Health Policy Institute. Health Policy Institute; Georgetown University.
https://hpi.georgetown.edu/cultural/
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Graves, J. A., Hatfield, L. A., Blot, W., Keating, N. L., & McWilliams, J. M. (2020). Medicaid
expansion slowed rates of health decline for low-income adults in Southern States. Health
Affairs, 39(1), 67–76. https://doi.org/10.1377/hlthaff.2019.00929

Illinois Government. (2021). Feasibility report for coverage affordability initiatives in Illinois.
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Illinois.gov.
https://www2.illinois.gov/hfs/SiteCollectionDocuments/04022021FeasibilityStudyReportFinal.pdf

Karpman, M., Coughlin, T. A., & 2021. (2021, April 6). Declines in uncompensated care costs for
the uninsured under the ACA and implications of recent growth in the uninsured rate. KFF.
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https://www.kff.org/uninsured/issue-brief/declines-in-uncompensated-care-costs-for-the-uninsure
d-under-the-aca-and-implications-of-recent-growth-in-the-uninsured-rate/
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KFF. (2019, March 15). KFF Health Tracking Poll – February 2019: Prescription Drugs. The
Henry J. Kaiser Family Foundation.
https://www.kff.org/health-costs/poll-finding/kff-health-tracking-poll-february-2019-prescription-dr
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ugs/

King, J. S. (2020). Covid-19 and the need for health care reform. New England Journal of
Medicine, 382(26). https://doi.org/10.1056/nejmp2000821

Kosala, G., & Heengama, B. (2019). Scholar works revenue diversification to improve and
maintain service offerings of nonprofit organizations part of the finance and financial
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management commons, and the organizational behavior and theory commons. Walden
University.
https://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=8509&context=dissertations

McKinsey. (2022). The transformative impact of inflation on the healthcare sector | McKinsey.
Www.mckinsey.com.
https://www.mckinsey.com/industries/healthcare/our-insights/the-gathering-storm-the-transforma
tive-impact-of-inflation-on-the-healthcare-sector

Nall, R. (2020, September 8). Health equity: Definition, examples, and action.
Www.medicalnewstoday.com. https://www.medicalnewstoday.com/articles/health-equity

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Peng, Z., & Zhu, L. (2021). The impacts of health insurance on financial strain for people with
chronic diseases. BMC Public Health, 21(1). https://doi.org/10.1186/s12889-021-11075-2

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Rapfogel, N., & Calsyn, M. (2021, May 5). Public options will improve health equity across the
country. Center for American Progress.

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y/
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Sturmberg, J. P., & Bircher, J. (2019). Better and fulfilling healthcare at lower costs: The need to
manage health systems as complex adaptive systems. F1000Research, 8, 789.
https://doi.org/10.12688/f1000research.19414.1

Truong, H., Yee, T., & Tu, D. (2022). The impact of cost management strategies on financial
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performance in healthcare organizations. Journal of Healthcare Finance, 49(2), 1-15.

https://journals.lww.com/journalhealthcarefinance/Abstract/2022/03000/The_Impact_of_Cost_M
anagement_Strategies_on.2.aspx

WHO. (2019). Economic and social impacts and benefits of health systems report. Who. int.
https://apps.who.int/iris/bitstream/handle/10665/329683/9789289053952-eng.pdf
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