HSA6114: Chapter 1

primary objectives for acceptable health delivery system

(1) enable all citizens to obtain needed health care services (2) ensure that services are cost-effective and meet certain established standards of quality.

access in the U.S. determined by

(1) have health insurance through their employers (2) are covered under a government health care program (3) can afford to buy insurance with their own private funds (4) are able to pay for services privately (5) can obtain charity or subsidized care.

managed care

(1) seeks to achieve efficiency by integrating the four functions of health care delivery (2) employs mechanisms to control (manage) utilization of medical services (3) determines the price of services and, consequently, how much the providers are paid. -primary financer is employer or government

imperfect market

-insurance plans act as intermediaries for the patients -health plans are the real buyers in the health care services market -prices are determined by payers, such as MCOs, Medicare, and Medicaid. Because prices are set by agencies external to the market, they are not governed by the forces of supply and demand.

free market

-patients (buyers) and providers (sellers) act independently, with patients able to choose services from any provider -prices are governed by the free and unencumbered interaction of the forces of supply and demand -patients must directly bear the cost of services received. -not the case in the U.S. -free market requires that patients have information about the appropriateness of various services to their needs--difficult to obtain because technology-driven medical care has become highly sophisticated -Knowledge about new diagnostic methods, intervention techniques, and more effective drugs fall in the domain of the professional physician, not the patient.

insurance

-protects the insured against financial catastrophe by providing expensive health care services at mitigated cost -specifies what services the beneficiary is entitled to, by whom and where -also functions as claims processor and manages distribution of funds -fundamental purpose of insurance is to reimburse major expenses when unlikely events occur--having insurance for basic and routine health care undermines the principle of insurance.

disadvantages of multiple payers

-providers cannot keep up on health plans, services covered under each plan and how much each plan will pay for those services -Providers must hire claims processors to bill for services and monitor receipt of payments. Billing is not standardized -Payments can be denied for not precisely following the requirements set by each payer. -Denied claims necessitate rebilling. -partial payment allows the provider to balance bill the patient for the amount the health plan did not pay but it triggers a new cycle of billings and collection efforts. -Providers engage in lengthy collection efforts, including writing collection letters, turning delinquent accounts over to collection agencies, and writing off as bad debt amounts that cannot be collected. -Government programs have complex regulations for determining whether payment is made for services actually delivered. ex. Medicare and Medicaid is known for lengthy delays in paying providers.

10 Characteristics of the U.S. Health Care system

1. No central agency governs the system 2. Access to health care services is selectively based on insurance coverage 3. Health care is delivered under imperfect market conditions 4. Insurers from a third party act as intermediaries between the financing and delivery functions 5. The existence of multiple payers makes the system cumbersome 6. The balance of power among various players prevents any single entity from dominating the system 7. Legal risks influence the practice behavior of physicians 8. Development of new technology creates an automatic demand for its use. 9. New service settings have evolved along a continuum 10. Quality is no longer accepted as an unachievable goal.

need and demand

Need = amount of medical care that medical experts believe a person should have to remain or become healthy demand follows from self-assessed need, which, coupled with moral hazard, leads to greater utilization, creating an artificial demand because prices are not taken into consideration. provider-induced/supplier-induced demand=Practitioners who have a financial interest in additional treatments also create artificial demand by prescribing medical care beyond what is clinically necessary.

utilization of health services

The quantity of health care consumed

package pricing

a bundled fee for a package of related services. Ex: surgeon's fees, hospital facilities, supplies, diagnostics, pathology, anesthesia, and postsurgical follow-up in one price

benefits of managed care

accomplishes cost control and greater integration of health care delivery without compromising quality ensures access to needed health services emphasizes preventive care

provider

any entity that delivers health care services and either independently bills for those services or is supported through tax revenues.

health coaches

complement medical professionals by getting to know patients through one-on-one contact and can keep the clinical staff apprised of financial struggles, issues with housing, family concerns, or other obstacles that may stand in the way of the patient following a prescribed care plan do not need a medical degree, can be recruited from various professional backgrounds, and help improve the effectiveness and efficiency of care.

administrative costs

costs associated with billing, collections, bad debts, and maintaining medical records U.S. spends far more than national health care systems

growth of medical technology

creates demand for new services despite shrinking resources to finance sophisticated care People generally equate high-tech care with high-quality care. Legal risks for providers and health plans may also play a role in discouraging denial of new technology.

continuum of services

curative (i.e., drugs, treatments, and surgeries) restorative (e.g., physical, occupational, and speech therapies) preventive (i.e., prenatal care, mammograms, and immunizations).

central agency

disadvantages: availability of services and payments to providers are subject to such budgetary constraints availability of specialized services is restricted. in the U.S. despite no central agency, federal government determines public-sector expenditure and reimbursements for their beneficiaries

demand

driven by the prices prevailing in the free market Under free-market conditions, the quantity demanded will increase as the price is lowered for a given product or service Conversely, the quantity demanded will decrease as the price increases.

problems with lack of central agency

duplication, overlap, inadequacy, inconsistency, and waste occur and inability to use standard budgetary methods for cost control

power balancing

each player has their own economic interests to protect self-interests of various players produce competing forces within the system leading to the challenge of cost containment -cost containment has resulted in payment cuts to providers and minimal health insurance coverage ex: physicians have income and want minimal interference with practice of medicine, institutional administrators seek to maximize reimbursement from private and public insurers, insurance companies and MCOs maintain their share of the health insurance market, large employers contain the costs they incur providing health insurance to their employees, government contain the cost of providing benefits

premium cost sharing

employers require employees to pay portion of cost of health insurance

health care reform

expansion of health insurance to cover the uninsured Ex: ACA which required all US citizens and legal residents be covered by either public or private insurance or pay a tax resulting in an overall decrease of uninsured, but still many were left without health coverage

quad function model

financing, insurance, delivery, payment

phantom providers

function in an adjunct capacity and bill for their services separately ex: anesthesiologists, nurse anesthetists, and pathologists during surgery

emergency medical treatment and labor act (EMTALA)

hospital emergency departments (EDs) are required to evaluate a patient's condition and render medically needed services for which the hospital does not receive any direct payments unless the patient is able to pay.

health information technology (HIT)

improved access to care through telemedicine Electronic health records provide clinical measures, decision support tools, enabled providers to automate processes to reduce redundancy, and captured more clinical data

quest for quality

increased pressure to develop quality standards and demonstrate compliance higher expectations for improved health outcomes at the individual and community levels

insurance as an intermediary

no incentive to be the patient's advocate on either price or quality employers may be reluctant to change plans if the current plan offers lower premiums than a different plan.

financing

normally employment based in US employers can purchase through MCO in public programs, government functions as financier and is used as an HMO

payment

normally in form of reimbursement as determined by the insurer at time of service, patient is required to pay out of pocket amount and then the remainder is billed to MCO or insurance

moral hazard

once enrollees have purchased health insurance, they may use more health care services than if they were to pay for these services on an out-of-pocket basis

managing chronic diseases

patients with multiple use the most health services and each condition increases cost by factor of 3 patient centered medical homes and ambulatory intensive care units are being incorporated into accountable care organizations

types of health services along continuum of care

preventive primary specialized long-term subacute acute rehabilitative end-of-life

trends and directions

primarily driven to promote health while reducing cost health is now seen as the presence of wellness rather than the absence of illness focus on delivery by mid-level providers

Childrens health insurance program (CHIP)

program for children of low-income families jointly run by federal and state

medicare

program for elderly and disabled run by federal government

medicaid

program for indigent jointly run by federal and state

standards of participation

providers must comply with the standards established by the government to be certified to provide services to Medicare, Medicaid, and CHIP beneficiaries.

defensive medicine

providers protect themselves against the possibility of litigation by prescribing additional diagnostic tests, scheduling return checkup visits, and maintaining copious documentation efforts may be unnecessary, costly, and inefficient.

delivery

provision of health care services by various providers.

challenges to the U.S. health care system

quest to control costs with increasing demands -aging population -more chronic diseases and comorbidities

universal access

the ability of all citizens to obtain health care when needed -a theoretical concept.

access

the ability of an individual to obtain health care services when needed, which is not the same as having health insurance.