CHALLENGES TO THE HEALTHCARE INDUSTRY part 1

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Due to the rapidly changing healthcare industry there are many things that challenge insurance and healthcare leaders should be aware of. These changes are not only affecting people but it includes salaries, patient volume and reimbursement. Some of the forces that have played a role in these issues have caused an increase in the cost of living. If a healthcare organization does not stay up to date and adapt to these issues, it will suffer financially. In this proposal, I will discuss these forces that are affecting the healthcare industry, what their impacts are, and some opportunities and challenges they have created.

Major Forces in Healthcare and Their Impact

Salaries cuts are a major issue within numerous different industries including the healthcare industry. According to the consumer price index, there has been an increase of $.40 in consumer product from January 2007 to January 2017 (McMahon, 2017). With the prices of things going up like healthcare and insurance, it is also causing the price of living to rise and many people having to choose. Healthcare supplies and equipment costs are on a drastic rise which then leaves business trying to walk the line on what to pay their staff. This has led to little room for raises and a way higher turnover rate. This issue has forced businesses to create new options to increase retention rate such as; increased personal time off, stock options, or decreased benefit costs.

Another issue that has a drastic effect on the healthcare is the reimbursement rates that are constantly decreasing. When the Affordable Care Act passed in 2001 there was a boost in patients receiving care because of the rise on insurance holders. Along with this increase Medicaid had an increase of reimbursement rates in 2014 to match Medicare rates.  (Xenon Health, 2015). This increase in Medicaid reimbursement was roughly 24 percent. However, after these two years the Medicaid rates returned to the normal rate of about 54 percent of what private insurance reimburses. An increase in Medicaid patients is leaving healthcare facilities with very low reimbursement rates, causing many challenges for healthcare facilities to cover their expenses.