Health Care Technology and Finance in the U.S.


HealthCare Technology and Finance in the U.S.

Technologyhas become an integral aspect in the provision of health care.Indeed, it has facilitated giving people safe and efficient care,which is critical for survival of humans. For instance, theadvancements in technology have supported the production of devicessuch as the Google glass, which helps in providing enhanced care topatients having trauma. Thus, technology has been viewed assignificant in improving health services. Health cost in the UnitedStates has been another issue that has remained debatable since thefinancing of medical services has required a big share from the grossdomestic product (GDP) of the country. This report will delve thematter of health care technology and finance in the U.S.

Healthcare expenses is astronomical in the U.S. Studies by ComparativeEffectiveness Research (CER) have revealed that cheap medical optionsthat have not been applied by medical care practitioners exist(Sheridan, 2012). According to Sheridan (2012), 64 percent of medicalunits still make use of paper-based records however, they will needto transform to electronic health records (EHRs) in the proximatefuture, or become penalized. EHR is a computerized application thatstores identifiable health data of an individual electronically. Astechnology progresses into the medical field, EHR will blow up andboost efficacy of client services (Sheridan, 2012). Regrettably, theverification to support the sustainability of EHR has not yet beenascertained.

In2004, President George Bush started a ten-year program to endorse theintegration of EHR, which has also been a major focus for PresidentObama. The present administration has a belief that the introductionof EHR is crucial to realize better care for American citizens(Sheridan, 2012). Since over 50% of Americans fail to receivesufficient health care because of the rising cost of medicalservices, the induction of EHR by the government is believed to havean impact of mitigating health care disparities. A barrier thatexists in the introduction of EHR in health care units is lack oftraining in the educational programs. However, the administration hasauthorized the right training for doctors and hospitals (Sheridan,2012).

Shuler(2011) posits that the area of medical services in the United Stateshas been resilient to the info era and electronic medical record(EMR) systems. The transition from a paper record approach to an EMRstructure has been sluggish however, it can be perceived to move abit quicker in the past decade. Most health experts argue that paperrecord approach is the way of the past while the future comprises ofapplying computerized initiatives. Stakeholders such as nurses,administrators, and doctors among others are adjusting to the EMRsystem and have the feeling that more valuable time can be used inenhancing patient care (Shuler, 2011). Evidence suggests that thereis a connection amid advanced EMR systems and reduced expenditure andconstructive patient outcomes (Shuler, 2011). In the modern times,leaders in the medical organizations are using EMR structures andintegrate them with sound nursing informatics tools in an attempt tomaximize quality care as well as minimize costs. Through theutilization of quality nursing informatics, nurses are able to savetime and avoid unnecessary work. For instance, there are systems thathave the potential of automatically entering vital signs and otherassessments in EMR systems. Such technology helps in reducing errorswhile eliminating some unnecessary procedures and tasks. This is acritical aspect in the provision of health care since it can assistin improving satisfaction of patients. The utilization of an EMRarrangement combined with concrete nursing informatics tools is anelement that healthcare leaders should consider. The application ofpaper records in health care services does not make sense as itproduces unnecessary costs for healthcare facilities (Shuler, 2011).

Accordingto Omachonu &amp Einspruch (2010), the healthcare business hasexperienced an increase in innovations that have an objective ofenhancing life expectancy, analytical and management options, qualityof life, and the competence as well as cost efficacy of the medicalsystems. A crucial role has been played by information technology inthe revolution of medical systems. However, regardless of theincrease in novelty, theoretical investigation on the science and artof medical modernization has limitations. Healthcare noveltyprogresses to be an important element in the expedition since itbalances cost suppression and quality of health services (Omachonu &ampEinspruch, 2010). Out of $600 billion that is expended on lab testsannually in the United States, 70% of the resources pay forpaperwork, which is prone to costly errors. In order to realize hugesavings in this area, there is a need to use electronic recordkeepingand software that have the potential of detecting mistakes andprovide alternatives (Banger &amp Graber, 2015).

Thehealthcare industry is on a hinge of a future where physicians willbe in a position to share imaging and test results within or acrossorganizations. According to Omachonu &amp Einspruch (2010), thereare two chief dimensions of innovations that the U.S. healthcare canadopt which include operational and environmental dimensions. The twoaspects motivate or influence the uptake of modernism in healthcarefacilities. The operational facet includes the enhancement of medicaloutcomes, usefulness, nursing shortage, profitability, agingpopulation, patient fulfillment, and cost control. Alternatively, theecological dimension entails organizational culture, partnerships,physician acceptance, and teamworks. Thus, innovation can beassociated with the need of the health industry to contain costs,which is a fundamental goal in the U.S. healthcare facilities.

Accordingto Kowdley &amp Ashbaker (2011), healthcare costs have beenaugmenting annually in both real and nominal terms. The growth rateof healthcare has increased at a faster rate compared to the grossdomestic product of the U.S. over the past 4 decades. This has led tothe portion of healthcare outlay as a fraction of GDP to increaseover this period. Most of the rise in the health care expenditure hasbeen attributed, largely, to the expansion and growth of technologyin the health care system. The cost has been moved to both thegovernment run healthcare system (Medicare and Medicaid) and privatehealth insurance entities. Kowdley &amp Ashbaker (2011) argue thatalthough incorporation of technologies has an overall impact ofdecreasing health costs in other areas of medical care, it tends toincrease the health care expenditure associated with surgery. This isbecause the induction of technologies results in a sustained increasein costs due to an augmented access for patients and the enhancedactual outlay of production.

TheCongressional Budget Office projects that the share of GDP expendedon healthcare will reach 30% in 2035, 40% in 2060, and 49% in 2082(Kowdley &amp Ashbaker, 2011). The increase in health care spendingwill be observed in private insurance as well as public insuranceproviders. Medicaid and Medicare are also estimated to increase fromthe present levels with the aging of Americans and as the number ofbeneficiaries rise with the retirement of baby boomers. Medicaid andMedicare are projected to grow to 9% and 19% in 2035 and 2082respectively (Kowdley &amp Ashbaker, 2011).

Insupporting healthcare upgrading, the American Recovery andReinvestment Act (ARRA) of 2009 includes a provision for the HealthInformation Technology for Economic and Clinical Health (HITECH) Act.The idea that IT will promote healthcare restructuring is facilitatedby federal investment of $35 billion for HITECH initiatives,including show of Meaningful Use (MU). The initial stage of MUemphasizes on data capture and sharing. Alternatively, the thirdphase stresses on changing health services through medical IT(Hessels et al., 2015). Entities that receive Medicaid and Medicareresources are eligible to engage in the EHR enticement initiatives.The utilization of IT in health is one encouraging system-levelprogram that may enhance organization performance as well ascommunication across experts. Some evidence show that technologyimproves connection and decision-making, a move that positivelyinfluences health unit performance and patient satisfaction. Despitebroad devotion and funding, key issues in the use of IT continue topressurize, including discovering the impact of EHRs across differentorganizational environments. Thus, although health IT is perceived asimportant in enhancing the patient and provider outcomes, it may alsohave some gaps (Hessels et al., 2015).

HealthIT has the capacity of enhancing the health of individuals as well asthe working of providers, which is critical in giving enhancedquality, price savings, and greater involvement by patients inmedical care. However, despite having these benefits, practitioners’and health centers’ use of health information technology and EHRsis low (Buntin et al., 2011). In accelerating the utilization ofhealth IT, in 2009, the Assembly passed and President Obama assentedinto law the Health Information Technology for Economic and ClinicalHealth (HITECH) Act. HITECH was vital since it makes approximately$14-27 billion in enticement payments accessible to health facilitiesand medical experts in the embracing of certified electronic healthrecords and application of the tools successfully in the progressionof care. The Congress also introduced programs within the Office ofthe National Coordinator for Health Information Technology (ONCHIT)to act as guide to physicians, health centers, and other mainentities as they embrace electronic health records in attainingmeaningful use that is spelt in federal regulations. According toBuntin et al. (2011), federal funding was conventionally utilized toas an incentive for basic research in technology, science, andmedicine. However, in the present, policy makers and healthprofessionals have acknowledged the worth of translational researchand behavioral aspects in the transmission of health innovation.Health IT emerges as a field in which new federal efforts have beenfocused on aligning payment with delivery system reforms.

Accordingto Squires (2012), medical care expenditure is a chief element of anyeconomy of an industrialized nation. The advance of drugs and medicalexpertise can result in invented products, new markets, andinnovation hubs. Health outlay is substantial because it satisfieskey personal and societal calls for services that convey enhancedhealth, high output, and prolonged lives. Comparing the health sectorwith others in the budget, a great proportion of the health sectorobtains its resources from the public. In different countries thatare industrialized, except the U.S., affordability of medicalservices is achieved through worldwide insurance-based plans ortax-financed approaches. In the U.S., public resources contribute tomedical services through insurance initiatives like Medicaid andMedicare, and tax plan which backs employer-sponsored healthinsurance (Squires, 2012).

Studieshave indicated that medical services expenditure in the U.S. dwarfsthat found in other developed economies. In 2009, the United Stateshealth care spending reached approximately $8,000 per capita. Thecountry dedicates around 17% or more out of its GDP to the healthcare sector, which is relatively higher compared to other developednations since other countries spend approximately 12% or less of GDPon medical care (Squires, 2012). Also, in 2009, public outlay in theUnited States accounted for about 50 percent of all healthexpenditure, whereas in other developed economies such as Switzerlandaccounted for 60%, while it stood at 84% in UK and Norway.&shy&shy&shyOne likely reason for the United States health care expenditure tosoar to such high levels is due to the elderly people, as thebaby-boomers approach the age of retirement with consistently biggermedical care demands. While the populace is becoming older, the U.S.has fairly young inhabitants in comparison to other developedcountries such as Norway, UK, and Switzerland. Besides, lifestyles aswell as behavior are chief determinants of health, which have aninfluence on medical demands and expenditure. One-third of the U.S.inhabitants have obesity. The high rates of obesity contributesignificantly to the medical expenditure of the U.S. One studyindicates that, in 2008, the medical costs associated with obesity inthe United States was approximately 10% of all medical expenditureduring the year (Squires, 2012). Furthermore, the high spending inhealth services in the U.S. can be attributed to high charges inoffice visits, drugs, and procedures. Moreover, the use of expensivehealth technology can be associated with the high cost of medicalcare in the U.S. (Squires, 2012).

Accordingto Chandra &amp Skinner (2012), medical technologies havecontributed to rising endurance rates in the United States, butspending on health care in relation to GDP has also expanded in arapid manner compared to other countries. Technology growth has beenassociated with the increasing health care spending in the UnitedStates. Technology advances have been indicated to generate progressin longevity and expansion in costs. New technologies involve fewerrisks and thus increase costs because more patients may experiencecomparative gains. Therefore, per patient outlay would fall but totalcharge would increase with the diffusion of new procedure. Acrossdoctors, there are variations in the perception of benefits thataccrue to given procedures. Additionally, they seem to predict entirespending across regions (Chandra &amp Skinner, 2012). For instance,imaging technologies provide large incremental worth for a subgroupof patients, but their effectiveness in marginal patients isdifficult to determine. Practitioners are now utilizing computerizedtomography and MRIs among others in the treatment of diseases. Theuse of these costly technologies in the provision of health care hasled to the growth of medical services. Although there are specificuses of imaging with clear value, there are also some instances wherethe technology may be harmful. For example, the technology may beassociated with the risk for cancer as radioactive emanating from theprocedures may expose patients to contracting cancer (Chandra &ampSkinner, 2012). Therefore, some technologies are believed to havefalse positives, which may result in an increase in the probabilityof causing harmful effects. Hence, in case technology is consideredto have false positives, it is likely to lead to the expansion ofhealth care spending.

Werder(2015) argues that health care organizations that have entirelyintegrated and facilitated administrative strategic importancealigned with significant drivers, which are vital to the perceptionsof patients, can enhance patient contentment scores. The adoption ofa well-developed EMR and vigorous leadership support is also vital inimproving patient experience. The adoption of health informationtechnology has become a challenge in health organizations due to theskyrocketing of health care services. However, there is a need toinvest in health information technology since it improves patientexperience. The satisfaction that people receive from theincorporation of health information technology can be categorizedinto four subgroups, which include technology tools electronichealth record and access technology as enabler and quality,communication, as well as safety. According to Werder (2015),healthcare practitioners will discover that the implementation oftechnologies will be viewed as a market differentiator in the future.Expertise that directly bonds the practitioners with the patientswill offer a practical social call in true communication form.Healthcare centers are already putting into utilization the capacityof pushing patient learning videos and reports into the homes ofpatients through the EHR and portals of patients (Werder, 2015).Although health information is expensive, there is a need for healthfacilities in the U.S. to apply it because it helps in improvingpatient experience. Therefore, cost emerges as an important issue inthe integration of technology in healthcare organizations.


Inconclusion, the introduction of EHR by the government is believed tohave an impact of mitigating health care disparities. A barrier thatexists in the introduction of EHR in health care units is lack oftraining in the educational programs. However, the administration hasmandated the right training for physicians and hospitals. Health careoutlay is a chief constituent of any economy of a developed country.The improvement of drugs and medical expertise can result insuccessful products, new markets, and novelty hubs. Medicalexpenditure is substantial because it satisfies key personal andsocietal needs for services that convey enhanced health, betteroutput, and prolonged lives. Comparing the health sector with othersin the economy, a large proportion of the health sector is fundedthrough public resources. A crucial role has been associated withinformation technology in the innovation of medical programs.However, regardless of the increase in novelty, academic explorationon the science and art of medical revolution is limited. Healthcarenovelty endures to be a vital factor in the expedition as it attemptsto balance budget containment and medical services excellence. In theUnited States, medical expenditure is astronomical. As technologyprogresses into the field, EHR will blow up and boost adeptness ofclient services. Regrettably, the verification to support thesustainability of EHR has not yet been proven. Technology growth hasbeen associated with the increasing health care spending in theUnited States. However, its advances have been indicated to generateprogress in longevity and expansion in costs.


Banger,A. &amp Graber, L.M. (2015). Recent Evidence that Health IT ImprovesPatient Safety. ResearchTriangle Institute.

Buntin,B.M., Burke, F.M., Hoaglin, C.M. &amp Blumenthal, D. (2011). HealthAffair,Vol. 30 (3) 464-471.

Chandra,A. &amp Skinner, J. (2012). Technology Growth and Expenditure Growthin Health Care. Journalof Economic Literature,Vol. 50 (3) 645-680.

Hessels,A., Flynn, L., Cimiotti, P.J., Bakken, S., Gershon, R. (2015). Impactof Health Information Technology on the Quality of Patient Care.OJNI,Vol. 19.

Kowdley,G. &amp Ashbaker (2011). Health care Costs in America: Technology asa Major Driver. Journalof Surgical Education,Vol. 68 (3) 231-238.

Omachonu,K.V. &amp Einspruch, G.N. (2010). Innovation in Healthcare Delivery:A Conceptual Framework. TheInnovation Journal,Vol. 15 (1).

Sheridan,S. (2012).&nbsp The implementation and sustainability of electronichealth records. OnlineJournal of Nursing Informatics (OJNI),16(3).

Shuler,K.G. (2011). Role of Nursing Informatics for Leadership. AdvanceHealthcare Network for Nurses.

Squires,A.D. (2012). Explaining High Health Care Spending in the UnitedStates: An International Comparison of Supply, Utilization, Prices,and Quality. Issuesin International Health Policy, The Commonwealth Fund.

Werder,M. (2015). Health Information Technology: A Key Ingredient of thePatient Experience. PatientExperience Journal,Vol. 2(1).