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Healthcare Cost Milieu and the Need for Rationing

Healthcare Cost Milieu and the Need for Rationing

Healthcare expenditure in the United States has been rising over the years. The U.S. healthcare system is also experiencing an increased utilization of various healthcare. This has made the U.S. to be ranked as the world’s leading healthcare spender as compared to other countries from the developed world. Various factors are contributing to the current utilization rates and rising healthcare expenditure. The wayward healthcare costs prompt the need to ration the available resources. Both high healthcare costs and rationing of care services and resources create accessibility and ethical issues. There is a need to develop a long-term solution to ensure the sustainability of the U.S. healthcare system. This research paper explores the issue of healthcare costs and rationing in the post-pandemic environment and the high prevalence of chronic diseases and recommends a solution to contain the rising healthcare costs and reverse the need for rationing.

Defining the Problem of Healthcare Costs and the Need for Rationing

Although the U.S. healthcare system has been the anchor for the U.S. economy and economic development, it is currently facing substantial problems, making it an unsustainable and larger consumer of the national budget. In the pre-COVID-19 period, U.S. healthcare expenditure grew for four consecutive years, with a notable increase of 4.6 per cent in 2019, indicating a total of $3.8 trillion in national healthcare spending (Martin et al., 2021). Notably, the U.S. government and private insurers spent an estimated $4.0 trillion on healthcare in 2021, which was 17.4% of the nation’s gross domestic product (GDP) (Congressional Research Service, 2023). Regardless of the high expenditure, the U.S. still rates low in population health outcomes compared to its economic peers.

The COVID-19 pandemic is setting new trends in healthcare services and product consumption, which threaten further increases in the U.S. as demand for care grows during and after the pandemic (Health Research Institute (HRI), 2023). Additionally, the U.S. has a huge burden of non-communicable chronic diseases (Azarpazhooh et al., 2020) as well as an ageing population who are prone to acquire multiple chronic conditions contributing to the age-related burden of disease and healthcare services consumption (Atella et al., 2019). Of concern amid the rising healthcare costs is the proportion of Americans who are yet uninsured or are underinsured. Although, as of 2021, 91.4 per cent of Americans were insured under various programs, 8.6 per cent of the population, or 28 million Americans, remained uninsured (Congressional Research Service, 2023). The high utilization trends during the COVID-19 pandemic are expected to continue into the post-pandemic period (Health Research Institute (HRI), 2023). With chronic diseases high and age-related healthcare utilization trends growing, available resources will remain insufficient for the general population and the need for rationing.

Literature Review

Research identifies the COVID-19 pandemic to have contributed to the strain on resources across the healthcare systems as the demand for healthcare services, including testing, care, and treatment (Moosa & Luyckx, 2021; Wall et al., 2020). Evidence also shows that the impact of the pandemic has been disproportionate across populations based on population demographics and the need for rationing and prioritizing the allocation of limited resources. Farrell et al. (2020), for example, found that the COVID-19 pandemic had a severe impact on older adults as compared to younger generations. The study showed that older adults had an increased risk of developing severe illness and higher rates of hospitalizations related to COVID-19. It was also established that the pandemic also increased the risk of mortality among older adults. As the resources for healthcare delivery became limited during the pandemic, Farrell et al. (2020) suggest the need for rationing and prioritizing resource allocations by considering the legal and ethical issues related to the rationing of limited resources.

Wall et al. (2020)  provide an example of increased demand for resources during the COVID-19 pandemic and the justification for rationing and priority allocations by focusing on the impact of COVID-19 on transplant programs globally. COVID-19 has negatively impacted global transplant programs, including lockdowns risk of exposure from organs, and constrained resources for transplant. The overall impact was felt on the complexity of making patient allocation decisions with limited resources. Wall et al. (2020) recommend making ethical allocation decisions based on the severity of illness, potential benefits, and cost-effectiveness.

On the other hand, Moosa and Luyckx (2021) identify the realities of rationing healthcare in times of increased demand and limited resources. The argument presented in the article focused on the impact of the COVID-19 pandemic on health systems as the demand for healthcare resources increased. An increase in resource demand makes them scarcely available, creating a need for rationing. Rationing, however, can create accessibility and equitability issues in healthcare, locking out people with genuine needs. Rationing decisions need to be regular and ethical. Regardless of demand, employing health systems strengthening methods can combat the need for rationing.

Analysis of Healthcare Costs and the Need for Rationing

Several interrelated factors contribute to the current healthcare cost trends in the U.S. and the need for rationing. As noted, the COVID-19 pandemic has increased the demand for various healthcare services as well as the utilization of such services. The pandemic also led to major changes in how healthcare services are accessed as new technologies, including those that support telehealth and telemedicine, were adopted. The costs related to the implementation of innovative healthcare solutions such as telehealth contribute to healthcare costs in direct adoption costs and indirectly during user training (Hilty et al., 2023). The high prevalence of non-communicable diseases and the growing portion of the ageing and aged population prone to multiple chronic diseases increase the burden of disease on the U.S. national and household budget. Poor planning and wastage in the U.S. healthcare system lead to higher costs (Shrank et al., 2019). Overall, the increased demand for services as a result of the pandemic and the increasing burden of disease has strained the available resources, leading to scarcity. Rationing is identified as an option in healthcare when the demand is high and the resources are limited to ensure the sustainability of the healthcare system. However, high healthcare costs and rationing negatively impact equitable access to healthcare services and ethical issues in resource allocation. Both high costs and rationing also risk the development of multiple chronic diseases with a further significant impact on the costs of healthcare.

Proposed Possible Solutions

Three possible solutions have been proposed based on the observed trends in healthcare utilization, costs, disease prevalence, and insurance. The first solution is to focus on reducing wastage across all levels of the U.S. healthcare system. This includes the use of digitized and automated resource management systems to optimize resource usage. The second solution is to invest more in disease prevention than in treatment. Preventive measures can reduce risks and disease prevalence, hence, the burden of disease. The third possible solution is to improve insurance rates through universal healthcare coverage. Universal healthcare coverage will improve access to preventive care services.

Selected Proposed Solution

Universal healthcare coverage (UHC) is the most probable solution to the rising healthcare costs in the U.S. and avoids the need for rationing. UHC ensures that all people, regardless of their sociodemographic characteristics, have access to quality healthcare services. This, in return, helps in the provision of preventive care services, improving testing early detection, and reducing the prevalence of chronic diseases. This has a positive impact on population health outcomes. UHC achieves this through pooling public resources, sharing risks, and improving healthcare consumers’ negotiating power.

Implementation Plan for Universal Healthcare Coverage

The implementation plan for the UHC program across the U.S. healthcare system should be phased. The first step is to comprehensively analyze the current U.S. insurance marketplace and the healthcare system, including community, provider, and insurance stakeholder views on the program. This will help determine the readiness for UHC. Step two includes developing legislation to guide the framework for implementing and managing UHC in the U.S. The next step is establishing the funding sources, mechanisms, and infrastructure to ensure the successful implementation of UHC. The final implementation steps will require extensive community education to ensure buy-in for the UHC program, implementation of the program, and setting metrics for the UHC program.

Justification of Universal Healthcare Coverage

There is extensive evidence to validate the implementation of Universal healthcare coverage. Based on evidence from multiple countries, both high- and low-income countries, UHC was found to improve service coverage and accessibility as well as offer financial protection (Wagstaff & Neelsen, 2020). In China, 10 years of UHC have shown that UHC-related health reforms improve the sustainability of healthcare financing and the primary healthcare system, including access and supply to essential medications (Tao et al., 2020). This proves UHC improves equitability in healthcare access, reducing health-related financial risks and increasing the resilience of healthcare systems in times of healthcare emergencies. The UHC can result in healthier populations, hence reducing healthcare expenditure.


Despite the U.S. having the world’s biggest healthcare budget, the population’s health outcomes still remain poor compared to other developed countries. The issue has been exacerbated by the COVID-19 pandemic and post-pandemic environment combined with an ageing population and a high prevalence of non-communicable chronic disease. Rationing becomes necessary as the demand for healthcare services increases and the resources become limited. Implementing the UHC in the U.S. can support the pooling, planning, and allocation of resources to improve equitable access to available preventive healthcare services. Overall, better preventive care reduces disease prevalence, resulting in reduced demand, scarcity of resources, costs, and the overall need for rationing.


Atella, V., Piano Mortari, A., Kopinska, J., Belotti, F., Lapi, F., Cricelli, C., & Fontana, L. (2019). Trends in age-related disease burden and healthcare utilization. Aging Cell, 18(1), e12861.

Azarpazhooh, M. R., Morovatdar, N., Avan, A., Phan, T. G., Divani, A. A., Yassi, N., Stranges, S., Silver, B., Biller, J., Tokazebani Belasi, M., Kazemi Neya, S., Khorram, B., Frydman, A., Nilanont, Y., Onorati, E., & Di Napoli, M. (2020). COVID-19 Pandemic and Burden of Non-Communicable Diseases: An Ecological Study on Data of 185 Countries. Journal of Stroke and Cerebrovascular Diseases, 29(9), 105089.

Congressional Research Service. (2023, February 6). U.S. Health Care Coverage and Spending.

Farrell, T. W., Francis, L., Brown, T., Ferrante, L. E., Widera, E., Rhodes, R., Rosen, T., Hwang, U., Witt, L. J., Thothala, N., Liu, S. W., Vitale, C. A., Braun, U. K., Stephens, C., & Saliba, D. (2020). Rationing Limited Healthcare Resources in the COVID-19 Era and Beyond: Ethical Considerations Regarding Older Adults. Journal of the American Geriatrics Society, 68(6), 1143–1149.

Health Research Institute (HRI). (2023). Medical cost trend: Behind the numbers 2022. PwC.

Hilty, D. M., Serhal, E., & Crawford, A. (2023). A Telehealth and Telepsychiatry Economic Cost Analysis Framework: Scoping Review. In Telemedicine journal and e-health : the official journal of the American Telemedicine Association (Vol. 29, Issue 1).

Martin, A. B., Hartman, M., Lassman, D., & Catlin, A. (2021). National Health Care Spending In 2019: Steady Growth For The Fourth Consecutive Year. Health Affairs (Project Hope), 40(1), 14–24.

Moosa, M. R., & Luyckx, V. A. (2021). The realities of rationing in health care. Nature Reviews Nephrology 2021 17:7, 17(7), 435–436.

Shrank, W. H., Rogstad, T. L., & Parekh, N. (2019). Waste in the U.S. Health Care System: Estimated Costs and Potential for Savings. JAMA, 322(15), 1501–1509.

Tao, W., Zeng, Z., Dang, H., Lu, B., Chuong, L., Yue, D., Wen, J., Zhao, R., Li, W., & Kominski, G. F. (2020). Towards universal health coverage: lessons from 10 years of healthcare reform in China. BMJ Global Health, 5(3), e002086.

Wagstaff, A., & Neelsen, S. (2020). A comprehensive assessment of universal health coverage in 111 countries: a retrospective observational study. The Lancet Global Health, 8(1), e39–e49.

Wall, A. E., Pruett, T., Stock, P., & Testa, G. (2020). Coronavirus disease 2019: Utilizing an ethical framework for rationing absolutely scarce healthcare resources in transplant allocation decisions. American Journal of Transplantation, 20(9), 2332–2336.


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Possible Course Project Topics: Choose one topic
Describe and evaluate the ethical issues involved in Medicare-funded organ transplants.
Assess the intent and impact of publicity-oriented legal challenges to physician-assisted suicide.
Analyze the effectiveness of society’s delegation of ethical standards and the supervision of professional conduct in the professions of medicine and nursing.

Healthcare Cost Milieu and the Need for Rationing

Healthcare Cost Milieu and the Need for Rationing

Describe the current healthcare cost milieu and evaluate the need to ration the availability of healthcare services.
Analyze the recent legislation outlining minimum safe staffing standards for healthcare organizations; suggest follow-up strategies.
Research Paper Grading Rubric
Introduce the issue.
Define the problem.
Search the literature.
Analyze the problem.
Offer possible solutions.
Propose a single solution.
Develop an implementation plan.
Justify why and how your solution will solve the identified problem

The Course Project has two deliverables due in Week 7.

Research Paper: The length of the Research Paper should be approximately five to seven pages, double-spaced in MS Word and include a minimum of six references in APA format.
PowerPoint Presentation: The length of the PowerPoint Presentation should be approximately 10–15 slides with relevant speaker’s notes and include a minimum of three audio-visual components (e.g., audio narratives can be embedded in images, figures, tables, audio links with/or without video, etc.). Follow these guidelines to create your PowerPoint Presentation.
Include a cover slide with the course number, course title, title of PowerPoint Presentation, your full name, and date.
Title of Presentation: Course Project: PowerPoint Presentation
Insert headers or titles or subtitles on each slide.
Insert page and slide number.
Keep it simple but engaging. Use appropriate images and graphics to illustrate and complement your presentation.
Number of slides: 10–15 slides
Complete a minimum of three of the 10–15 PowerPoint slides with an audio or visual component to present, explain, and bring to life your presentation. Show enthusiasm and speak with proper volume and inflexion to maintain audience interest and attention.

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