Analysis of Healthcare System Bargaining and Government Response

This report examines the dynamics within healthcare systems, particularly focusing on the bargaining power between academic medical centers (AMCs) and large tertiary community hospitals. It highlights the financial challenges faced by AMCs, including high costs associated with providing tertiary care and the increasing preference of patients for community hospitals due to lower costs. The report analyzes how state and national governments might respond to these trends, emphasizing the role of Medicare and Medicaid funding. It suggests that government intervention is necessary to regulate healthcare costs, monitor bargaining requests, and encourage AMCs to focus on their local market positions. The report references key sources, including studies on bundled payments and the competitiveness of AMCs in a post-reform healthcare environment, and how AMCs can be financially stable. This report provides a comprehensive view of healthcare economics and policy.

Running head: HEALTH CARE SYSTEM
Analysing Health Care Systems
Name of the Student
Name of the University
Author Note

HEALTH CARE SYSTEM
1) What would be the difference in the bargaining position of an academic medical
center and a large tertiary community hospital system?
The marketplace for health care is increasingly being driven by factors such as
efficient fulfillment of patient’s needs and by competition on value. In the United States of
America, academic medical centers are considered to be crown jewel for health. Academic
medical center accounts for 60% level 1 trauma centers in the nation, all the while training
30,000 medical student and graduating 17,000 doctors annually (Miramedgs.com., 2019).
However, the AMCs are considered to be aggressive providers of end-of-life, high cost care.
Over 80% of the AMC could be fulfilled by larger tertiary community hospitals in lower cost
(Murray & Burch, 2016). The AMCs face major financial issue of providing tertiary care in
appropriate cost. Thus, a large tertiary community hospital, who treat patients from local
area, can be adjudged to having significant opportunity for bargaining over the academic
medical center.
2) How might state and national governments respond to this increasingly popular
phenomenon?
The initial goal of every health system it to financially survive and properly resolute
to funding challenges. On an average, over 60% of the funding for the academic medical
centers are funded by the government initiatives of Medicare and Medicaid (Bolz & Iorio,
2016). Due to overburdening of health care costs, local patient prefer to shift to a large
tertiary community hospital. The state and national government should react to the financial
crisis of academic medical centers by keeping a check on the bargain request by the health
care systems and impose several charges and restriction that refrains them from performing
unfair practices (Bolz & Iorio, 2016). The government can help the AMCs to focus on local
market position, to locate for markets where the payers need it and are ready to go it to access
health care services.

HEALTH CARE SYSTEM
References
Bolz, N. J., & Iorio, R. (2016). Bundled payments: our experience at an academic medical
center. The Journal of arthroplasty, 31(5), 932-935.
Miramedgs.com. (2019). The Rise and Fall of Academic Medicine: AMC Competitiveness in
Post-Reform Healthcare. [online] Available at: https://www.miramedgs.com/web/57-
focus/past-issues/spring-2017/667-the-rise-and-fall-of-academic-medicine-amc-
competitiveness-in-post-reform-healthcare [Accessed 1 Feb. 2020].
Murray, J., & Burch, K. (2013). Recent trends in academic medical center mergers,
acquisitions and affiliations. Health Law., 26, 29.