Challenges and Trends in the US Healthcare Industry

This report analyzes the challenges and trends in the US healthcare industry, including financial and economic issues, invoicing and payment processing, security of patient's information, healthcare reform and complexities, transparency in pricing, supply and demand challenges, increasing healthcare costs, and regulatory issues.

Running head: HEALTH CARE FINANCE
Health Care Finance
Name of the Student:
Name of the University:
Author’s Note:

1HEALTH CARE FINANCE
Executive Summary:
This report aims at analyzing the challenges and issues faced by the US as well as global
healthcare industries. It also describes the economic trends in the US healthcare industry. As
the healthcare industry is going through certain reforms, there are various complexities in
accounting and operations of the hospitals. In this report all those challenges and trends are
explained briefly. Lastly the report concludes some key issues in faced by the US healthcare
industry along with recommendations to resolve those challenges.

2HEALTH CARE FINANCE
Table of Contents
Introduction:...............................................................................................................................4
Financial and Economic Issues in the Healthcare industry:.......................................................4
Invoicing and Payment Processing:.......................................................................................4
Security of Patient’s Information:..........................................................................................5
Healthcare reform and complexities:.....................................................................................5
Need of transparency in Pricing:............................................................................................5
Payment processing and collection as the key issue in healthcare industry:.............................5
Supply and Demand Challenges for Healthcare industry:.........................................................6
Increasing trend of Healthcare costs:.........................................................................................6
Regulatory issues:......................................................................................................................6
Conclusion:................................................................................................................................7
Recommendations:.....................................................................................................................7

3HEALTH CARE FINANCE
Introduction:
Health care industry is having immense importance in any of the country as it is a
basic necessity of the people. In US the health care industry is moving towards a new
business model aiming at providing value rather than the volume of services. Their main
objective is to keep the people away from the hospitals making them healthy. A value based
system is being adopted in modern shaped hospitals to offer more efficient and appropriate
healthcare services to the patients and in time. In this report the challenges and issues in the
US healthcare industry is being analyzed and some recommendations are made to face those
challenges to make the healthcare industry more a value based system Capolongo et al.,
2015).
Financial and Economic Issues in the Healthcare industry:
The healthcare industry of US is going towards value based model of business giving
priority to the quality of healthcare services. The healthcare industry is having some financial
and economic challenges and issue, which can be descried briefly as below.
Invoicing and Payment Processing:
Payment collection from the patients has become the key financial challenge for
healthcare industry. If the medical bill is huge payment terms for patients should be friendly
with their abilities of payment. It requires flexibility in payment terms for medical bills.
Sometimes it becomes difficult for the hospital to recover certain part of the medical bill
service for which has already been provided. As the healthcare service is given priority at
certain emergency situations, later on the collectability of the bills comes into certain
challenges ("5 Major Challenges Facing the Healthcare Industry in 2019", 2019).

4HEALTH CARE FINANCE
Security of Patient’s Information:
Hospitals are collecting personal information from each of their patients for providing
better services to them. Security of such a huge patients’ personal information database is in
question now. There are various previous instances of database breach in healthcare industry.
Healthcare reform and complexities:
The healthcare industry is going through a reform and it becoming more complex in
providing quality healthcare services to the patients.
Need of transparency in Pricing:
The transparency in pricing is a big issue for the healthcare industry. The bills must be
prepared in such a way that the fees charged to the patient is justified rationally ("Here are the
12 healthcare issues that will define 2018, according to PwC", 2019).
Payment processing and collection as the key issue in healthcare industry:
In recent years, invoicing, payment processing and collection of fees have become
major issue for the healthcare industry. The invoicing system needs to be more transparent so
that the there is a clarity in the items of the healthcare bill. It also requires certain flexibility
in the billing and collection system to serve the patients ultimately with the value based
services. The payment system in healthcare industry is going through a big change. They
healthcare industry involves three parties, receiver of service, provider of service and the
payer or receiver of service bill. Patients are the receiver of service and payer of service bill
to the hospitals. Doctors are the provider of service and receiver of payments from the
hospitals and lastly the hospitals are the receiver and payer of amount to the doctor and the
patients.

5HEALTH CARE FINANCE
Question arises, how the payment will be made to the doctors and on what basis the
payments will be charged from the patients. Selection of basis of pay to the doctors and basis
of billing to the patient is in context in this situation. Doctors are paid mainly based on the
activities performed or it may be certain fixed amount of pay each month. On the other hand
patients are billed based on services consumed by them. There are various insurance schemes
or bulk healthcare facilities under which a group of services is provided at certain price. In
those cases it becomes difficult to identify those transactions and record accordingly in the
books of accounts.
Supply and Demand Challenges for Healthcare industry:
There is one major issue in the healthcare industry which is the gap between the
supply and demand of drugs and healthcare service providers. There are various lab tests
which require specific expertise in certain field, still now there is a lack of such adequate
number of specialized labs. On the other hand, supply of various medicines and drugs are
scarce which sometimes fails to meet the current demand of those medicines. Lastly,
adequate numbers of specialized doctors are not available till now which creates a big gap in
between the healthcare services needs and deliveries.
Increasing trend of Healthcare costs:
As the healthcare services is going to be more mechanized and tested in more
improved laboratories the costs of healthcare services is in increasing trend. Also the concept
of value based service requires premium amount of fees for premium healthcare services
(Kuziemsky, 2016, January).

6HEALTH CARE FINANCE
Regulatory issues:
Regulatory issues in healthcare industry are those which are related with the changes
in government rules and regulations affecting the health care industries. With changes in
various government rules, hospitals also need to change their strategies to cope with the
changing rules and regulations.
Conclusion:
From the above discussions it can be concluded that, payment processing, cyber
security and regulatory changes are the main challenges in the US healthcare industry. All
those challenges affect the financial performance of the healthcare industry. As the healthcare
industry is passing through some reforms, there are various complexities in the industry and
some good strategies can help the hospitals to face those challenges.
Recommendations:
It can be recommended at last to face those financial and economic challenges that,
the payment processing system should be made more transparent and flexible according to
the pay ability of the patients. Improved information technology should be used for cyber
security of patients’ data. Lastly, building up some good strategies would help the industry to
survive in the changing scenario.

7HEALTH CARE FINANCE
References:
5 Major Challenges Facing the Healthcare Industry in 2019. (2019). Retrieved from
https://medium.com/@MailMyStatement/5-major-challenges-facing-the-healthcare-
industry-in-2019-60218336385f
Capolongo, S., Bottero, M. C., Lettieri, E., Buffoli, M., Bellagarda, A., Birocchi, M., ... &
Gola, M. (2015). Healthcare sustainability challenge. In Improving Sustainability
During Hospital Design and Operation (pp. 1-9). Springer, Cham.
Groves, P., Kayyali, B., Knott, D., & Kuiken, S. V. (2016). The'big data'revolution in
healthcare: Accelerating value and innovation.
Here are the 12 healthcare issues that will define 2018, according to PwC. (2019). Retrieved
from https://www.healthcareitnews.com/news/here-are-12-healthcare-issues-will-
define-2018-according-pwc
Hilbert, M. (2016). Big data for development: A review of promises and
challenges. Development Policy Review, 34(1), 135-174.
Kaye, K. S., Patel, D. A., Stephens, J. M., Khachatryan, A., Patel, A., & Johnson, K. (2015).
Rising United States hospital admissions for acute bacterial skin and skin structure
infections: recent trends and economic impact. PLoS One, 10(11), e0143276.
Kuziemsky, C. (2016, January). Decision-making in healthcare as a complex adaptive
system. In Healthcare management forum (Vol. 29, No. 1, pp. 4-7). Sage CA: Los
Angeles, CA: SAGE Publications.
Zingales, L. (2015). Presidential address: Does finance benefit society?. The Journal of
Finance, 70(4), 1327-1363.