Health Care Financing

Introduction

Health care financing is an issue which is facing harsh scrutiny in the political sphere. Universal healthcare coverage has been touted for years; however, health care reform is being called upon from multiple arenas as the debilitating costs both to healthcare providers and recipients can get in the way of providing efficient medical care. Research has also been done to measure how “the method of financing of health expenditure affects the efficiency with which better health can be achieved” (Grosskopf, 2006 1477).  Due to these financing concerns at the time the focus of healthcare is on treatment rather than prevention. Through the use of health promotion programs, nurses can play a vital role in playing a role in prevention rather than just reactive treatment. While these health promotion programs have costs associated with the implementation of the program, in the long run, the programs often save money through reducing the incidences of the problem occurring which will reduce healthcare costs.  A health care program and budget will be developed to reduce incidences of teenage pregnancy. 

Task

A sample budget for a teenage pregnancy prevention program as part of an awareness campaign, to reduce the risks and costs associated with teenage pregnancy, will be developed through the implementation of the following steps:

 A.  Defining the problem: Teenage pregnancy is an issue of concern for parents and healthcare providers. “Every year, 400,000 U.S. children under age 18 give birth--a rate twice as high as that in any other advanced country” (Maynard, 1998 np). Teenagers who become pregnant can have medical, emotional and financial problems which can impact them for the rest of their lives. Teenagers are more likely to give birth to babies that are premature and are less likely to have prenatal care. Teenagers are at times not mature enough to be able to handle the responsibilities of being a young mother. Teenagers can have high incidences of postpartum depression and other mental illnesses associated with undergoing the life task of birth at such a young age. Teenage mothers are also less likely to complete their education which can impact their ability to be financially successful later in life. The costs of having a child can also financially set a teenager back as they may not be able to maintain employment which would be able to pay for their child’s expenses. In order to combat these issues, a prevention program needs to be developed to educate teenagers about the risks associated with teenage pregnancy/ Nurses can play a role in this awareness campaign through developing the program, budget and implementing the program within the community settings of high schools. 

B.  Budget: Before a program can be developed a budget would need to be created which would account for all of the expenses associated with the implementation costs of the prevention program:

1.  Three fixed expenses: Fixed expenses for a budget would include anything that would be paid at a constant rate each month. Three fixed expenses for this program would include rent for the office space of the program, the monthly salary for the staff in the prevention campaign and automobile insurance for the vehicles which will be used in transporting staff to various high schools.

2.  Three variable expenses: Variable expenses are costs which fluctuate every month as they may be high one month and low another. These costs are important to closely maintain as they can take over the budget. Three variable costs associated with this program would include transportation costs of paying for the gas or paying for any unexpected repairs the vehicle may need. As repairs and the price of gas cannot be predicted these expenses can vary from month to month. Other expenses include the cost of publishing the material which would be provided to the teenagers and also the costs of purchasing materials which will be utilized in the demonstrations such as condoms. The amount needed each month may vary which would change the budget.

3.  Three controllable expenses: Controllable expenses are those which can be kept as low as possible in order to stick to the budget. The expenses associated with this program would be janitorial services for the office space, bonuses for staff in achieving the program goals and promotional material for marketing the program to other high schools or school districts within an area. 

4.  Three unrecoverable expenses: Unrecoverable costs are those costs which are unable to be recovered if the program for some reason is not implemented. These costs are associated with leases or contracts. The costs associated with this program would be contracted space such as the office space which may have a lease term, the cost of the leftover educational materials and the cost of the remaining time on the lease for the vehicles used to transport staff to the high schools.

(Budget table omitted for preview. Available via download)

C. Cost-Benefit Analysis:  Once a budget is developed a cost benefit analysis needs to be conducted in order to determine if the costs associated with the program would be worth the benefits. “Cost-benefit analysis is a planning technique that answers the following question: What are the costs of pursuing a goal, objective, program or specific nursing intervention?” (Swansburg, 2002 187). As the funding for the program has to come from a source it is important to develop a sound cost benefit analysis to demonstrate why the program should or should not be implemented. The following factors would need to be included in the analysis:

1. Costs of implementing the pregnancy prevention program - $115,333 annually.

2. Overall expenses in a health promotion campaign - $576,665 for a five year campaign and the various expenses associated with the program.

3. Financial and social benefits of the campaign- Pregnancy prevention campaign can reduce teenage pregnancy which in turn will reduce the costs associated with providing health care to premature babies and teenagers who did not take care of themselves during their pregnancy. The program would also reduce the loss to the job market that is created when teenagers become young mothers. The social benefits of the program would also create healthy communities in which there is not a large number of young mothers raising children who may go on to have children at a young age themselves.

4. Costs to healthcare and the community without the prevention program - The costs associated with teenage pregnancy are considerably high. “Teen childbearing in the United States cost taxpayers (federal, state, and local) at least $10.9 billion in 2008”. These costs also continue to occur over a long period of time. Teenage pregnancy leads to other consequences which in turn have heavy costs associated with them such as incarceration, homelessness, and involvement in the child welfare system.

The cost benefit analysis of the pregnancy prevention program could be summarized by: Costs to the healthcare, justice system, child welfare system and communities when teenage pregnancy occurs: $10.8 billion annually. Costs to the healthcare department of implementation of the teenage pregnancy prevention program: $115,333 annually. The cost benefit analysis suggests that the implementation of the program would be effective as the benefits associated with the program outweigh the costs. 

Conclusion

The high costs of teenage pregnancy to not just healthcare but also other systems which often times deal with the teenage population, such as juvenile justice and child welfare, demonstrates that a program is needed to reduce the rates of the teenage pregnancy. Kirby (2001), would argue that parents can no longer be the sole source of providing sexual education to teenagers. He would argue that pregnancy prevention programs are needed to reduce these rates. Through the development  of a program which effectively uses its budget to administer material to teenagers which may help them make better decisions in terms of their sexual health, the rates of teenage pregnancy can be greatly reduced. The cost benefit analysis determines that the program is worth implementing due to the low costs of the program versus the costs of not implementing the program. The development of a budget is the crucial first step in this process. The cost benefit analysis will then highlight what the budget means in terms of the larger problem. The teenage pregnancy prevention program should be implemented.  

References 

Grosskopf, S., Self, S., & Zaim, O. (2006). Estimating the efficiency of the system of healthcare financing in achieving better health. Applied Economics, 38(13), 1477-1488.

Kirby, D. (2001). Emerging Answers: Research findings on programs to reduce teen pregnancy. 

National Campaign To Prevent Teen Pregnancy, 1776 Massachusetts Avenue, NW,# 200, Washington, DC 20036.

Maynard, R. A. (1996). Kids having kids: Economic costs and social consequences of teen pregnancy.

The National Campaign to Prevent Teen and Unplanned Pregnancy (n.d.). Counting it up: The public costs of teen childbearing.  Retrieved from http://www.thenationalcampaign.org/costs/

Swansburg, R. C., & Swansburg, R. J. (2002). Introduction to management and leadership for nurse managers. Jones & Bartlett Learning.