Law and Ethics in Healthcare
Week 8 Discussion
What Drives Healthcare Costs?
In this week’s Discussion, you will focus on practical solutions to reducing healthcare costs while improving quality and access. Because health care in the United States is a business, it is imperative that healthcare administrators understand that providing safe, quality healthcare services under budget is one of the single most important performance metrics that they can benchmark for success.
To prepare for this Discussion:
· Choose a healthcare policy issue in your workplace or community related to cost, quality, or access. You may wish to explore the literature and healthcare policy websites to ascertain what is working and what might work in your workplace or community.
Post your Discussion, to include the following:
· Provide an analysis of the healthcare policy issue you chose, making sure to address these specific points:
· Describe the healthcare policy issue you selected.
· Provide and explain the statistics depicting the issue.
· Explain how this issue relates to healthcare costs, quality, and access.
· Explain why a lack of price transparency can contribute to increased healthcare costs.
· Explain a strategy that you would propose to decrease healthcare costs.
· Be sure to provide examples from your professional experiences to demonstrate cost concerns in your particular field. Alternatively, you can use personal anecdotes/stories to illustrate some of the problems that exist.
Support your response by identifying and explaining key points and/or examples presented in the Learning Resources.
Sample
The Upstream Cost Crisis: Preventable Chronic Disease and What We Can Do About It
The most consequential healthcare policy problem in the United States is not a billing dispute or a staffing shortage — it is the systematic failure to invest in preventing the diseases that are consuming the system. Ninety percent of the nation’s $5.3 trillion in annual healthcare expenditures go toward people with chronic and mental health conditions. That figure is not a footnote. It is the organizing fact of American healthcare finance, and it has direct implications for cost, quality, and access simultaneously. CDC
The Issue: Underinvestment in Primary Prevention of Chronic Disease
The United States spends generously on treating chronic disease and comparatively little on preventing it. Three in four American adults have at least one chronic condition, and over half have two or more. The conditions driving this burden — cardiovascular disease, type 2 diabetes, obesity-related illness, COPD — share a short list of modifiable root causes: poor nutrition, physical inactivity, tobacco use, and excessive alcohol consumption. Many preventable chronic diseases are caused by exactly this short list of risk behaviors. Despite this, less than 3 cents of every healthcare dollar in the U.S. is spent on public health and prevention, with the overwhelming majority flowing downstream to treat conditions that could have been addressed earlier at far lower cost. CDCCDC
The Statistics
The scale of this problem is difficult to fully absorb. Chronic disease is on pace to cost the United States as much as $47 trillion between 2024 and 2039, including $2.2 trillion annually in medical costs and nearly $900 billion each year in lost productivity by 2039. The human and financial concentration of this burden is striking: 5% of people account for nearly 50% of total healthcare spending, driven largely by the growth of patients living with three or more chronic conditions. Emergency department overutilization is part of the same picture — nearly 60% of all emergency room visits are associated with people with chronic conditions, at a cost of $8.3 billion, and nearly 30% of such visits could be prevented or treated in a lower-cost setting if conditions were better managed. At the community level, this means that under-resourced primary care and prevention infrastructure drives some of the most expensive care in the system. PFCD + 2
Impact on Cost, Quality, and Access
These three dimensions are deeply entangled. On cost: treating a preventable disease is always more expensive than preventing it. A patient who develops heart failure because hypertension went unmanaged for a decade will require hospitalizations, specialist management, and eventually potentially a transplant evaluation — care orders of magnitude more expensive than consistent blood pressure monitoring and medication. On quality: chronic disease that is poorly managed between acute episodes produces worse outcomes precisely because the current system rewards episodic intervention rather than longitudinal prevention. On access: communities with the highest rates of preventable chronic disease are disproportionately low-income and rural, with the fewest primary care providers and the least access to preventive services — meaning the people at highest risk are served by the thinnest infrastructure. This is not a coincidence; it is the structural consequence of a reimbursement system that has historically undervalued prevention relative to procedure.
How Lack of Price Transparency Compounds the Problem
Price opacity does not merely inconvenience individual consumers — it structurally prevents the market competition that would reward lower-cost preventive services. When patients cannot compare prices across providers, they cannot make informed decisions about where to receive routine preventive care. They may defer a $150 wellness visit because they do not know what it will cost, then present to an emergency department months later with an advanced complication that costs $15,000. Price transparency has long been viewed as a critical component of driving competition and consumerism in healthcare. Since the CMS Hospital Price Transparency Rule went into effect in January 2021, hospitals have been required to post pricing information publicly. Compliance increased from 70.4% in 2021 to 87.7% in 2022 following increased financial penalties. Yet compliance is only the beginning — data posted in machine-readable files that average consumers cannot interpret does not meaningfully reduce the information asymmetry that drives avoidance of preventive care and makes the overall system less efficient. Corporatecomplianceinsightsnih
A Proposed Strategy: Community Health Worker Integration into Chronic Disease Prevention Programs
The evidence-based strategy I would propose is the scaled integration of community health workers (CHWs) into federally qualified health centers and public health departments in high-burden communities, specifically targeting primary prevention of type 2 diabetes and hypertension — the two chronic conditions driving the largest share of preventable spending.
CHWs are trained community members who serve as a bridge between clinical care and the social environments where health is actually shaped. They conduct outreach, provide health education, connect people to resources, support medication adherence, and address social determinants of health such as food access and transportation — the barriers that a physician appointment cannot resolve. The CDC’s National Diabetes Prevention Program (DPP), delivered through community and FQHC settings and frequently facilitated by CHWs, has demonstrated that structured lifestyle intervention reduces diabetes onset by 58% in high-risk individuals. Medicare now reimburses for DPP delivery, making it a scalable, reimbursable intervention.
In public health practice, the experience of watching the same patients cycle through emergency departments for complications that a consistent community health connection could have prevented is both morally frustrating and financially indefensible. The cost of employing a CHW for a year is substantially less than a single preventable hospitalization — which means the return on investment is not ambiguous. Better prevention, earlier intervention, and improved management of chronic disease could prevent 150 million new chronic disease cases, save 13.5 million lives, and avoid $7 trillion in costs nationally between 2024 and 2039. PFCD
The strategy works because it meets people where they are — in their communities, speaking their languages, understanding their constraints — rather than expecting them to navigate a clinical system that was not designed for prevention. Pairing CHW programs with strengthened price transparency so communities can access and compare the cost of preventive services creates both the supply-side and demand-side conditions for a fundamentally more efficient system.
The downstream cost of failing to act is already measured in trillions. The upstream investment required to change the trajectory is a fraction of that — which is itself a policy argument that healthcare administrators are uniquely positioned to make.
