The role of Insurance in Healthcare Productivity
Discuss the role of insurance in healthcare delivery and productivity.
The Role of Insurance in Healthcare Productivity
Health insurance plays a significant role in healthcare. It refers to a type of agreement whereby the insurance company agrees with a client (an insured) to cover his/her medical expenses that arise if the insured falls ill or the insured experiences an event that leads to hospitalization. The costs include hospitalization costs, cost of medicines, or doctor consultation fees. Health insurance plays various roles in healthcare delivery and productivity. First, it promotes efficiency in healthcare delivery. This is because health insurance encourages cashless treatment whereby the insured gets treatment as his/her insurance company collaborates with the healthcare provider to get the bill cleared. Thus, it reduces the lengthy processes involved in a cash payment (Nguyen & Worthington, 2018). Secondly, health insurance has improved healthcare delivery to a large population, including low-income earners (Duggal & Hooda, 2021). Uninsured individuals incur substantial out-of-pocket costs whenever they fall ill or get hospitalized. This can hinder low-income individuals from accessing medical care. Health insurance has addressed this issue by allowing insurers to access care by paying a given amount of premiums over an extended period.
Besides, health insurance has improved productivity in healthcare. For instance, insured people are likely to seek healthcare services, including preventive services, such as screening tests for various health conditions, unlike the uninsured. Thus, this helps to promote the health outcomes of the insured as they are more likely to prevent multiple health conditions and even detect particular diseases during their onset (Al-Hanawi et al., 2020). Also, health insurance enhances productivity in healthcare as it helps to expand the number of healthcare services offered to patients. For instance, health insurance cover pre and post-hospitalization costs (Mehta et al., 2020). This has helped to reduce the rate of morbidity and mortality in healthcare and led to better patient outcomes.
Al-Hanawi, M. K., Mwale, M. L., & Kamninga, T. M. (2020). The effects of health insurance on health-seeking behaviour: evidence from the kingdom of Saudi Arabia. Risk Management and Healthcare Policy, 13, 595. https://doi.org/10.2147/RMHP.S257381
Duggal, R., & Hooda, S. K. (2021). COVID-19, Health Insurance and Access to Healthcare. Economic and Political Weekly, 10-12. https://www.researchgate.net/profile/Ravi-Duggal/publication
Mehta, R., Sahara, K., Merath, K., Hyer, J., Tsilimigras, D. I., Paredes, A. Z., … & Pawlik, T. M. (2020). Insurance coverage type impacts hospitalization patterns among patients with hepatopancreatic malignancies. Journal of Gastrointestinal Surgery, 24(6), 1320-1329. https://link.springer.com/article/10.1007/s11605-019-04288-9
Nguyen, L., & Worthington, A. C. (2018, July). Efficiency and Productivity of Australian Private Health Insurers. In 31st Australasian Finance and Banking Conference. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3222060