The Challenges to the Health Insurance Companies Essay

The Challenges to the Health Insurance Companies Essay

The Challenges to the Health Insurance Companies Essay

It is with dire need and serious concern that I have decided to notify your board of the subject above. The insurance company is faced with lots of challenges in the market following the recent events and issues surrounding the operations of the business. These issues and events have indeed affected both the insurance and the assurance sectors of the economy, but with regards to our company it is due to the significant changes in the consumer or client perceptions that have brought in a lot of competitiveness to the assurance industry in the United States of America.The Challenges to the Health Insurance Companies Essay


The current health insurance plans has basically left several if not millions of Americans behind in terms of development. The pre existing conditions have left most individuals wondering on how to salvage their health problems. These are conditions that existed way before the insured applied for the insurance policy for example the heart diseases and cancers which affect a good proportion of the public. This unfairness based on pre-existing circumstances makes sufficient health insurance out of stock for the millions of Americans. In almost all the states in the country right from corner to corner, assurance companies categorize inhabitants based on the pre-existing circumstances. Should they try to buy health insurance straight from assurance companies in the personality assurance market, the insurers rebuff them coverage, indict elevated premiums, and/or decline to cover that fastidious medical condition (Vargas and Torero 2009).The Challenges to the Health Insurance Companies Essay

Millions of the US citizens also lose health insurance cover every year through an application known as rescission. If an individual is diagnosed with an economically expensive condition like cancer, insurance companies will review the preliminary health condition survey of the insured. Assurance companies can retroactively revoke the whole policy if any stipulation was missed. Coverage can also be terminated for all members of a relation, even if simply one family member botched to unveil a therapeutic situation. At least a solitary assurance company has been established to assess worker performance based in part on the sum of capital a worker saved the company during rescissions. In simpler terms the assurance company workers are optimistic in revoking sick people’s wellbeing coverage (LaDou 2004).

These circumstances therefore call for an urgent attention and solution to the sector before it literally crumbles down. High-risk pools that have been used to cover the medically uninsurable simply do not work. Several states in the country offer high risk pools for the individuals who have no access to the assurance market or rather cannot simply obtain it. Nevertheless, these pools usually charge considerably elevated rates than they charge for a healthy person in the personality assurance market. This implies that only comparatively high-income citizens can manage to pay for the coverage (LaDou 2004).

Profits through a high-risk pool are also not certain. Some state high-risk pools have yearly caps on staffing. They also bind eligibility only to citizens who had preceding group health coverage in the past sixty three days which is approximately two months. All the pools also compel pre-existing conditions for about six months or one year, during which instant care for the very situation that made somebody uninsurable is not covered.The Challenges to the Health Insurance Companies Essay

The Health assurance transformation should make available the permanence and safety for All US citizens. Within the health assurance transformation, assurance companies should be barred from refusing coverage due to an individual’s medical account or wellbeing threat. Assurance companies should be placed obligatory to revamp any policy as long as the policyholder pays their payment in full. Assurance companies should not be permitted to refuse replenishment because somebody became unwell. Assurance companies should be barred from reducing or watering down assurance coverage for those who are or become sick (Vargas and Torero 2009).

Over the years, providing and funding high-quality healthcare has come up against a number of challenges. Due to an ageing population, an increase in demand and associated spending has contributed to augmented stress to Australia’s healthcare system. In this article, we will be looking at the four biggest challenges that the healthcare sector is currently facing.

1. Burden of preventable medical errors

Dr Ujjwal Rao, Senior Clinical Specialist, Elsevier highlights in his recent whitepaper that it is estimated that for every 100 hospitalisations per year, approximately 14 adverse events occur. This means that every year, there are around 43 million patient injuries that are avoidable.The Challenges to the Health Insurance Companies Essay

In The Global Burden of Unsafe Medical Care: Analytic Modeling of Observational Studies by Ashish K. Jha, he explored the degree of harm that came from unsafe medical care. Using disability-adjusted life years (DALYs), Kha measured the morbidity and mortality of patients due to specific adverse events. Referring to the 43 million avoidable injuries, Kha found that in terms of quality of life, almost 23 million years of healthy life was lost per year.

For example, a recent study conducted in a major hospital in Melbourne found that in four months, 61.5% of patients had at least one medication error. The cost of these errors is not limited to patients. Last year, media reported that misdiagnosis and surgical complications cost NSW public hospitals more than $262 million in the last six years.

What this means for the Australian healthcare system is that there is already a pre-existing condition for the existence of preventable deaths. It can be argued that greater education and research will go a long way towards improving these dire statistics, however other issues arise.

2. Medical information explosion

In his paper Challenges and opportunities facing medical education, Densen states that by 2020, information about the body, health, and healthcare is predicted to double every 73 days. In fact, to keep up with Primary Care literature, a GP would need to read for 21 hours every day.The Challenges to the Health Insurance Companies Essay

Obviously, such an undertaking is virtually impossible. However, this also means that medical practitioners can no longer rely on their training, medical intuition, and experience


When it comes to the delivery of high-quality healthcare. With this in mind, it has been suggested that integrating technology such as Clinical Decision Support Systems (CDSS) are the only way medical professionals can hope to keep up with the increase in information.

3. The slow diffusion of medical knowledge

You might be aware that the acceptance of new scientific discoveries into clinical practice can take a long time. However, this diffusion of medical knowledge is more drawn out than many realise. According to Balas, only 14% of new scientific discoveries make their way into daily clinical practice. Furthermore, those that do become accepted, take an average of 17 years to do so.

In Australia specifically, it takes:

● 3.48 years for regulatory bodies to withdraw drugs that are found to be unsafe
● 8.2 years for drugs to reach a stable level of prescription

This essentially means that patients are routinely waiting to be prescribed drugs or undergo procedures and interventions that have actually been proven to be effective decades ago. Unfortunately, there is no simple solution to this problem. That said, the use of CDSS (utilising guidelines built on the most current evidence-based information) at the point of care, will help overcome this challenge.

4. Good care costs less

Lastly, healthcare is currently being reformed globally. For example, payment models are increasingly moving away from Fee-For-Service (FFS) models to Pay-for-Performance (P4P) models.The Challenges to the Health Insurance Companies Essay

The idea behind this is that P4P models reward care providers for providing better quality care, whilst simultaneously penalising them for medical errors, adverse outcomes, and excessive diagnostic and treatment costs.

Thus in the P4P model, providers and healthcare systems risk significant financial penalties if they are unable to avoid adverse clinical outcomes and unnecessary tests and procedures.

What does this mean?

In short, there are a number of obstacles that currently face the medical sector. For some of these issues, only time and extensive research and funding will ensure a lasting solution. However, organisations can take the lead by implementing various technologies such as CDSS to combat preventable medical errors. The implementation of CDSS (and its incorporation of evidence-based medicine) means that medical professionals and healthcare providers will be able to reduce variability, improve patient outcomes, optimise EHR investment, and overall improve the quality of care for patients. The Challenges to the Health Insurance Companies Essay

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