The Use of Third-Party Payment in Healthcare
Over recent years, the United States has been relying on a third-party payment system for its healthcare. The individuals and employers are required to purchase insurance that allows the patients to receive healthcare treatments and other services that are, in turn, paid for by the insurance providers. However, the use of third-party payment has the effect of distorting the healthcare market because the patients/consumers are forced to accept unnecessary treatments and procedures because someone else pays the bills, but not the patients. It is mainly because patients feel that if they don’t use it now, they will lose these benefits (Nickitas, Middaugh, and Aries, 2016). There is a lack of incentives to economize because the insured patients will not take the price into consideration as a third party covers the cost. This means that physicians, doctors, or nurses can perform unnecessary procedures to make more money for the hospital or their practice in the case of private service providers. There is also the effect of increasing healthcare costs. Since insured patients do not realize the full financial impact of the treatment decisions, they do not take the cost of treatment into consideration, and therefore, the standard supply-demand price mechanism is not being applied. The result is that prices will go up consistently, thus increasing the prices for medical services and making unaffordable medical care available to self-paid parties (Abbey, 2013). There is a high chance of fraud and scams because some dollars paid by Medicare could be spent on fraudulent claims for which the consumers/ patients have not received care and service (Abbey, 2011). Therefore, third-party payment will always distort the healthcare market.
Even though third-party payment distorts the market for health care, every wealthy country insists on its usage because insurance spreads catastrophic risks over a large pool of individuals. It means that one will not be overburdened by the high cost if he/she was to pay for the medical cost individually. For most people with health insurance, healthcare costs no more. Than co-payment, it ensures that patients do not bear the full cost and payments of the healthcare services (In Nickitas, In Middaugh and In Aries, 2016).
In the case of the elderly, the government assumes the role of the insurer and uses funds from the payroll taxes from the current workers to pay for medical costs because as seniors age, they find it difficult to afford soaring health care costs as their income is shrinking. Many retired people cannot afford the average insurance plan, and therefore, there is a need to offer alternative payment programs (Nickitas, Middaugh, and Aries, 2016).
References
Abbey, D. C. (2011). Healthcare payment systems: Fee schedule payment system. Boca Raton: CRC Press.
Abbey, D. C. (2013). Cost-based, charge-based, and contractual payment systems. Boca Raton: CRC Press/Taylor & Francis Group.
In Nickitas, D. M., In Middaugh, D. J., & In Aries, N. (2016). Policy and politics for nurses and other health professionals: Advocacy and action.
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Question 
How does third-party payment distort the healthcare market?
The use of third-party payment in healthcare
Instructions: The length of the discussion post is 1 page long or one page and a half. Not more than that. It must be in APA format. It must provide three references or more. But nothing less than that.