Explain the interest group model of regulation.
health care organizations, regulations are continuously in route of consideration. For managers, regulations are important for five reasons including the fact that changes to regulations can make or break an organization, firms can use regulations to gain competitive edge especially when it can be used to prevent entry by a potential rival, regulations are political acceptable, legislating and regulating are continuing political contests and some of them work poorly because they conflict with powerful financial incentives (Lee, 2019). Regulations are put into place to help keep the systems, staff, and patients safe. They can affect all aspects of delivery of care and administration. Some of the more common regulations include the Health Insurance Probability and Accountability Act of 1996 (HIPPA), the Health Information Technology for Economic and Clinical Health (HITECH), and Hospital Readmissions Reduction Program (HRRP). When these regulations were created, they had safety in mind. Regulations serve many purposes, but consumer protection is at the top of the objective because consumers are rationally ignorant about the health care choices they must make (Lee, 2019). For example, under the Affordable Care Act (ACA), Insurance companies are required to have a database for pricing for consumers to shop and choose a program that works best for them. The publicly reporting of prices in hospitals, physicians and other health providers enables consumers to select health care providers on value, in much the same way they make cost-effective choices when purchasing other goods (Green and Sacks, 2018).
Market and regulations in health care go hand in hand. Different groups can use regulations to expand their markets and gain market power within health care organizations. The interest group model of regulation is a view of regulations as attempt to further the interest of affected groups, usually producer groups (Lee, 2019).
One of the main goals in health care to to provide good quality care in safe practices. Regulations are put into place to keep organizations and the people they server safe. Problems exist when these are violated. For example, when health care organizations violate the HIPPA law, several things can happen depending on the severity. According to the HIPPA Journal, there are four tiers of penalty structures. In most cases, the Office for Civil Rights (OCR) will work with organizations to resolve any issues using non-punitive measures, such as with voluntary compliance or issuing technical guidance to help covered entities address the effected areas however, in cases where the violation is serious and has persisted for a long extended time and have multiple areas of noncompliance, financial penalties will be issued (HIPPA, 2021). As leaders and humans in general, we all fall short as some point in life. Sometimes we are falling with intent and other time it occurs without having the understanding and knowledge to know better. As Christian’s, we are taught through the teachings of the bible that God bestows his grace among us throughout our journey when we do fall short. It is not that He expects us to be perfect, but his expectation is that we try to do our best and when we do fall short, repent and ask for forgiveness. He will shine though our weakness to prove to the world that he is King and is able to use our weaknesses for his glory. “But he said to me, ‘My grace is sufficient or you, for my power is made perfect in weakness.” Therefore, I will boast all the more gladly of my weakness, so that the power of Christ may rest upon me.” (1 Corinthians 12:9, English Standard Version).
Healthcare is an essential industry with a tremendous impact on countries. Markets have been the main method of healthcare delivery in the United States. Thus, healthcare markets are vital and come with a tremendous amount of competition (Gaynor et al., 2013). Organizations worldwide are seeking ways to gain market power. Therefore, the interest group model of regulation may play a role. The interest group model of regulation can be defined as regulations being viewed to further the interest of groups affected. These groups are usually producer groups (Lee, 2019). An interest group can be defined as a group of people that have the same goals in mind. They then try to influence the government to make laws that would ultimately support the goals. Regulation has been an effective way to avoid a large amount of competition while gaining market power.
Although healthcare markets have the intent to helping their consumers, it is critical to understand that regulations within the healthcare market that take on a competitive advantage may ultimately harm consumers. Regulation has been proven to be an effective way to limit competition between healthcare reorganizations (Lee, 2019). Therefore, the regulated industry is most likely to control the process, creating political tension within organizations. However, managers must not ignore politics within organizations or endure risk (Lee, 2019).
Additionally, regulation within healthcare is important for healthcare managers to understand. First, managers need to greatly understand when regulations change to affect an organization (Lee, 2019). Next, firms may use regulations to prevent other firms from placing their roots down and successfully run. Interestingly, regulations are politically acceptable. Healthcare organizations are extremely complex, resulting in the vulnerability of their consumers. Therefore, failure to address these feelings can lead to additional regulations of loss of business (Lee, 2019). Regulations are also considered to be a continuing political contest, resulting in the possibility of losing too much. Lastly, regulations may conflict with other financial incentives, reinforcing or undermining regulations (Lee, 2019). Therefore, managers must understand the potential of this occurring and determine how to address it when it happens. Healthcare managers have a large responsibility in understanding regulation and how it will affect their organization.
Managers need to understand the importance of regulations and how they may affect their organization. Understanding regulations will play a role in the decision-making process that managers are faced with. However, excessive regulation can also create a barrier when treating patients (Ross-Lee & Weiser, 1994). In the past, as regulation attempted to address specific problems relating to policy objectives, other policy objectives interfered with patient-physician relations. Therefore, managers must have a clear understanding and determine ways to improve physician and patient relations.
With healthcare organizations being one of the most important organizations globally, it is obvious that it can be extremely political. However, managers must understand that there must be an abundance of selflessness within an organization to be successful. Philippians 2:4 states: “Let each of you look not only to his own interests, but also the interests of others” (ESV, 2001). Often, as organizations fight for market power or use regulation for political contests, it is essential to set aside selfishness and become selfless, especially within the healthcare organization. Consumers trust the organization to seek care and are expected to be told what would be in their best interest. Therefore, it is important to build trust and understanding between the consumers and physicians. Regulation could impact those relationships, so it is critical to ensure regulations make a positive impact and not a selfish impact. The healthcare industry will be around forever; therefore, making patients a top priority will only improve the way healthcare is provided and improve the overall population health.