Affordable Health Care

Abstract

Affordable health care ought to be ubiquitous and responsive to changes in consumer demand. Providing affordable health care by reducing out-of-pocket costs (OOPC), and encouraging prevention, maintenance, and promotion of health are essential elements of promoting the health of nation. However, what stands in the way is the daunting complexity of health care system that it is supposed to serve patients with various socioeconomic status (SES). Health care products and services are complex and often complementary (not substitute) in nature and can only be valued by the patient’s ‘‘experience’’ and/or by the ‘‘credence’’ by which they are offered. In other words, the health care market deviates from the competitive norm. Uncertainties with the timing and the nature of health care needs have led to an all-pervasive and thriving health insurance industry, entrenched regulators in each state and the federal level, and evasive providers who possess complicated incentive structures that are yet to be fully understood by scholars and/or policy makers. The outcome is an evolving spectrum of opaque prices for the complex and complementary health care products and services. Thus, nationwide experiments, strategic inputs, and academic investigations into the taming, treating, and curing an obese health care industry have become the urgent preoccupation of the government (e.g., ACA 2010), strategists (e.g., Porter and Teisberg 2006), and scholars (e.g., papers in this issue). While no specific solution is in sight, the breadth of ideas, scholarship, and evolving experiments are encouraging. In the United States, the health care spending is projected to reach almost 20 % of GDP by 2024, indicating a growth of an almost 6 % per year. While, in recent years the growth rate in health care costs has been reduced, per capita spending on health care was $9,523 in 2014. In comparison, the United Kingdom, France, and Germany are spending around 8–10 % of their GDP on the health care. Rising health care costs hinders access to affordable health care. Innovative solutions require an in-depth understanding of the underlying problems. This is not possible without evidence-based supported theories that assist scholars to properly frame the underlying complex issues. Theories such as the ‘‘disease cost’’ theory of Baumol and Bowen (1966) that relates low productivity in health sector to rising costs are helpful, but lack reference to institutions, legacies, and existing complex incentive structures in a heavily regulated health care industry. On the other hand, theory-rich solutions (e.g., Mokhtari et al. 2015) are yet to be put to the test by evidence teased from nationalor international-wide databases. Understanding institutions and their legacies, which underpin the current framework for managerial input and policy analysis, is the key in gaining insight into the United States health care