Final answer:
When patients underutilize healthcare, medical providers can experience financial losses due to factors such as lack of access, uninsured patients, rising prices, and fraud. Some healthcare providers have adopted fixed-payment models and insurance policies with deductibles and co-payments to mitigate the financial impact of underutilization.
Step-by-step explanation:
When patients underutilize healthcare, medical providers can experience financial losses. There are several reasons for this:
- Lack of access: Poor people often have limited access to healthcare due to a lack of health insurance. This means they may postpone seeking medical care until their condition worsens, requiring more expensive treatments.
- Uninsured patients: Uninsured patients who receive medical care at emergency rooms may not be able to pay for their treatment. The cost of caring for these patients often falls on hospitals or is passed on to those with insurance.
- Rising prices and fraud: In response to being paid primarily by insurance companies, medical providers have raised their prices. Additionally, some healthcare providers exploit government payment for emergency care by performing unnecessary and expensive tests on Medicaid clients.
To mitigate the financial impact of underutilization, some healthcare providers have adopted fixed-payment models, such as health maintenance organizations (HMOs), to limit excessive healthcare demands. Deductibles and co-payments for insured patients can also reduce the level of moral hazard and minimize unnecessary healthcare consumption.