Community 11

15. What is a "carve-out" service?

A particular service that is offered only by a designated provider or group. Carve-out services might be designated for those who need the services the least. A carve-out service (for example, mental health care) is provided within a standard benefit package but delivered exclusively by a designated provider or group.

6. What were the effects of Medicare and Medicaid? Select all that apply.

A previously unseen rise in demand for services occurred. Many persons previously without access now receive health care. Medicare reimbursement rates became the standard for all insurance carriers. Now almost half of all health care costs in the United States are paid by government financing. The enactment of Medicare and Medicaid created an unprecedented demand for services. Medicare reimbursement rates generally became the standard for all insurance carriers.

21. What did large industrial giants do to stop the constant increase in their costs for health insurance for their employees?

Assembled their own health care programs Large industrial giants, such as Kaiser Permanente, decided to assemble their own health care programs. They built hospitals, hired physicians, and provided health care services to their employees. In an effort to market this concept, the phrase health maintenance organization was created. These organizations were designed to provide comprehensive care to employees.

6. What message are public health leaders trying to emphasize to the public?

Assume responsibility for your own health by choosing healthy behaviors Although there are many public health messages in the media, from stop smoking to get a checkup, the primary message currently being emphasized by public health, as well as all the media coverage of the constantly increasing cost for health care, is for each person to take responsibility for his or her own health through choosing healthy lifestyle behaviors

3. Of what can the American health care system be especially proud? Select all that apply.

Availability and use of technological advances in equipment and procedures, Laboratory and clinical research The United States leads the world in laboratory and clinical research. The United States also exceeds other industrialized countries in the availability and use of technological advances. We do not rank near the top in length of life or patient care outcomes, although we spend far more on health care than other industrialized nations. We are just beginning to confront the issues of access and rationing.

5. What or who determines eligibility for Medicaid to pay for health care? Select all that apply.

Baseline eligibility is established by the federal government, but states may be more lenient. Children in low-income families are eligible for free care. Eligibility depends on family size and total family income. Medicaid provides universal health care coverage for the indigent and children. Eligibility is dependent on the size and income of the family. The federal government sets baseline eligibility requirements. State governments who wish to provide care to more citizens can lower the eligibility requirements. The federal government mandates covered services, but state governments may provide more services.

9. Why do so many Americans continue to engage in unhealthy behaviors?

Because of the belief that most illnesses can be cured with insurance footing the bill Society sees insurance as an economic shield protecting against all disease and illness. The belief in cure rather than prevention, combined with this financial safety net, encourages society to become a passive participant in health care. The pervasive societal thought is "I don't have to worry; I have insurance."

1. What was unfortunate about the idea of private health insurance? Select all that apply.

Because providers were paid for any service they gave, it was economically advantageous for them to give as much care as possible. Health care costs increased very rapidly. Health education and health promotion interventions were not included in the idea of health insurance. Patients wanted any and all care that might help, regardless of how expensive it was. There was no limit on what care could be sought and given. The majority of the population was protected. The emphasis was placed on illness care, because providers received a fee only when a service was rendered, and all costs were reimbursed. Insulated from having to pay for health care, consumers demanded complex and technologically advanced services. These demands were a major force rapidly increasing health care costs because people with insurance felt entitled to care, and, after all, there was a guaranteed payer. Medical orientation was on curing at any cost.

3. What happened to health care providers during the Great Depression when so many persons were unemployed?

Both hospitals and physicians went bankrupt. With 25% of the population out of work, the number of patients capable of paying their medical bills was reduced. Because public financing was limited, hospitals, physicians, and other providers went bankrupt.

23. When Medicare first began reimbursing hospitals based on diagnosis-related groups (DRGs), which might have been less than actual cost, how did hospitals cope?

Charged more for patients whose care was paid by insurance Hospitals developed cost shifting to supplement losses caused by Medicare funding. Because private insurance reimbursements were cost based, hospitals included the loss in their total costs; therefore private insurance paid for covering care to both their enrollees and Medicare patients. By 1985 Medicare paid $0.87 for each hospital dollar and insurance providers paid $1.27.

7. What would be the least expensive approach to treating chronic diseases?

Choose healthy lifestyle behaviors to retain health The five leading causes of death and illness can be positively affected by changes in lifestyle. Healthy lifestyles can modify or even prevent most chronic illnesses.

24. How might all the changes resulting from attempts to control costs be summarized?

Conflict between providers, patients, employer, and insurance plans raged. All these changes resulted in conflicts among providers, patients, employers, and the insurance plans, particularly when services deemed necessary by the consumer and provider were denied insurance coverage. Everyone blamed everyone else.

2. What did insurance companies do to decrease their constantly increasing costs? Select all that apply.

Did not cover any illnesses that were diagnosed before the person (or his or her employer) purchased insurance Limited coverage to only certain services, eliminating any that were experimental, nontraditional, or too costly Only care requested by the patient's primary physician was eligible for reimbursement. Required preapproval before expensive services were used Whenever possible, ceased coverage on any person who used an exorbitant number of services Insurance companies attempted to reduce unnecessary utilization by limiting coverage for certain services and people. Restrictions such as the establishment of a gatekeeper that requires preauthorization, limited coverage for preexisting illnesses, and exclusion of participants whose use was deemed exorbitant were instituted. Such restrictions increased resentment and resistance and were not very successful.

12. What conclusion can be drawn from reviewing how health care costs are spread over a person's lifetime?

Expenditures increase with age. Expenditures increase with age. About one third of costs are incurred during middle age; half during the senior years; and, for those older than 85 years, one third of their lifetime costs occurs during their last year of life.

11. Who pays the majority of the costs for pharmaceutical drugs in the United States today?

Government Government pays 47.8%, insurance companies pay 22.3%, and individuals out of pocket pay 30%.

14. What is a current trend regarding heath care services?

Health care organizations are offering services low in cost and higher in reimbursement. There is a national shift from nonprofit health care to for-profit health care as large for-profit organizations take over smaller community organizations. Because emphasis is on profit, mechanisms of achieving higher reimbursement have been developed. Coding of the patient's illness from the CPT codes results in an increase in reimbursement. Use of computerized medical record programs almost ensures that service can be reimbursed at the highest rate possible. This has changed health care practices to the utilization of services that are low in costs and higher in reimbursement. High-cost services are limited or not offered.

7. What was one unfortunate consequence of using diagnosis-related groups (DRGs) to determine reimbursement? Select all that apply.

Incentive was to undertreat and underuse health resources. Quality of care was no longer assured. Because costs were contained by both the federal programs and insurance companies, the providers had a strong incentive to undertreat and underuse health resources. The public feared that the quality of care being provided was less to keep costs as low as possible

8. Because people respond to incentives, how has having health insurance affected lifestyle behaviors?

Medications and medical treatment are relied on for cure. Funding for behavioral changes is limited, inadequate, or unavailable. Weight loss programs or smoking cessation programs are not reimbursable treatment regimens, although more expensive pharmaceutical interventions are reimbursable. Therefore, it is financially wise not to worry until illness strikes because illness care is reimbursable, whereas preventive health care is not.

22. What did physicians do to compete with new competition from health maintenance organizations (HMOs)?

Organized preferred provider organizations (PPOs) to negotiate with insurance companies In an effort to compete with HMOs, physicians and hospitals organized the independent practice model, which provided services to enrollees of one insurance company. This model evolved into the PPO, which offered services at a reduced rate in exchange for a guaranteed increase in consumers.

4. Why do many persons who have Medicare decide to purchase Medigap health insurance policies? Select all that apply.

Patients have to pay a deductible (about $1000) when admitted as a hospital inpatient for care. Medicare Part A does not pay for physician services, hospital outpatient care, and medical equipment. Medicare does not pay for all health care costs of enrollees. There are costs the individual must pay. Consequently, individuals often decide to buy a Medigap policy. Medicare part B (if purchased) pays for physician services, hospital outpatient care, durable medical equipment, and other services including some home health care. The patient does have to pay a deductible, which was almost $1000 in 2010, if admitted as a hospital inpatient. Medicare part A does pay for most inpatient care in hospitals and skilled nursing facilities, hospice care, and some home health care.

2. Historically, how did patients pay for health care?

Patients paid out of their pockets for whatever care the provider charged. Until the 1930s, the predominant method of health care financing was self-payment. Health care providers charged a fee for the services they rendered, and the patient paid the out-of-pocket expense. The assumption was that those who could pay would pay and those who could not pay should receive care and pay what they could.

5. What was the first government step in trying to stop constantly rising costs?

Payment reimbursement was based on diagnosis and client characteristics rather than on treatment given. The first efforts to control costs were made by the federal government when Medicare hospital reimbursement was based on a prospective payment system. Payment would be based on a classification system that identified costs according to diagnosis and client characteristics.

10. Which groups of persons are more likely to engage in health-oriented lifestyle behaviors?

People with higher socioeconomic and education attainment Resistance to behavior change remains high among minorities and those of lower socioeconomic status and lower educational levels. Interest in health education, health promotion, and behavioral change has increased, particularly among those of higher socioeconomic and education attainment.

20. Indemnity plans were very much appreciated, but what flaw did they have?

Plans lacked any incentives to contain costs. Indemnity plans paid all the costs of covered services provided to the enrollee. The enrollee enjoyed free choice of provider and services. They preserve the enrollee's right of choice and allow the person to manage his or her own health care. These plans lack incentives for cost containment. Today, cost-sharing efforts (e.g., co-payments, deductible) help contain costs.

27. How might providers legally improve their profit under the current reimbursement process?

Practice very conservatively to earn an incentive payment by delivering care for less cost than allocated As a reward for conservative medical practices, health care providers may receive a specified amount of money or a percentage of the agreed reimbursement if services are delivered below the limit set by the third-party payer.

25. When was the idea of national health care insurance first debated in the United States?

President Theodore Roosevelt advocated such national medical coverage in 1916. European countries began a social model of health insurance in the early 1900s. President Theodore Roosevelt advocated a similar plan for the United States in 1916.

19. What is the primary thrust of philanthropic groups involved in health care?

Primary informational and research activities Philanthropic funding whose services are typically research or disease oriented pays a limited amount of health care. Services are limited to the specific disease or population of interest. Informational and research activities constitute the majority of services provided, although some give direct care or meet ancillary needs such as housing, transportation, or wigs.

26. How was the government successful at containing costs?

Prospective payments were based on diagnosis-related groups (DRGs). Various efforts from, for example, certificate-of-need, peer review, and utilization review were not effective. Prospective payment based on DRGs proved to be effective. The cost reduction that resulted gave rise to the managed care revolution as providers searched for the most cost-effective mechanism of care provision.

1. What is the best definition of economics?

Science of allocation of resources Economics represents the science of allocation of resources. Resources are goods or services.

16. Because of an interest in social justice, what major event affecting health care occurred in the 1960s?

Social Security Act was amended to create Medicare and Medicaid legislation. The popularity and benefits of employer-provided insurance plans were recognized, as was the reality that some segments of society were being neglected. The 1960s, with a pervasive thrust for social justice, presented the opportunity to move toward universal health care coverage. Titles XVIII and XIX of the Social Security Act created Medicare and Medicaid, respectively.

29. Why should nurses be knowledgeable about health care funding?

To better serve as patient advocates in policy making for funding that provides appropriate care for the greatest good Increasing knowledge of health care funding and policy making will empower nurses to advocate for the type of funding that provides appropriate care to obtain the greatest good. Nurses need to utilize their political power. Nurses must advocate for health promotion disease prevention funding.

4. Why did employers decide to offer health insurance as an employee benefit?

To obtain and retain the limited number of persons available to work when government rules forbid raising wages, insurance was offered. The idea of paying a small fee for guaranteed health care to have sickness cured was very popular. Health care providers liked knowing they would receive payment for their services. During World War II, faced with a limited workforce and governmental restrictions on wages, employers began to see health insurance as a means of supplying workers' benefits without granting a wage increase.

28. Why would large employers decide to self-insure?

To reduce administrative costs charged by insurance companies Some organizations have decided to self-insure their employees. This reduces the administrative cost of insurance, which has been estimated to represent 12.5% of the cost of insurance.

17. On what basis does the federal government give special funding for health care?

To stay consistent with the societal priorities such as 2020 Health Objectives Allocation of resources is based on societal priorities such as the 2020 Health Objectives.

13. What was a major change after Medicare began a prescription drug benefit?

Utilization of drugs and their cost immediately increased. As with other health care services, once a funding source has been established, utilization and costs increase. As one example, physician visits or hospital outpatient visits in which five or more prescriptions were ordered increased from 4% to 7%.

18. What is the usual result of a state or health care organization receiving federal funding for a special health care need?

When funds cease, so does the health care; therefore continuity is lacking. When the funding is no longer provided, the programs cease, which results in lack of continuity of care.