Community Health Ch 12: Economics of Health Care

Who does Medicare serve?

- 65 and older - Disabled - End stage renal disease - ALS

Medicare Part D

- Alleviates the costs of prescriptions for seniors but does this increase their out of pocket costs? - Eligible to purchase insurance coverage to offset costs of prescription drugs: so you're spending money to save money? - Optional: must enroll in an approved prescription drug plan at additional cost - Monthly premium, deductibles, and co-payments - Must pay 100% of costs when costs reach "coverage gap" or "donut hole"

Prospective reimbursement

- Alternative to cost-based reimbursement with immediate savings noted - No matter what providers cost is, reimbursement to hospitals is from a predetermined amount - Amount paid to provider is determined by diagnosis, age, gender and complications - Reduced Medicare costs, NOT overall health care costs - Hospitals developed cost-shifting as a means of supplementing the loss of Medicare funding - Hospitals were able to include the loss from caring for Medicare patients in their cost - Actuarial classification ensured adequate premiums were charged for the projected health care needs of those enrolled and other means of cost-control emerged - Managed care groups negotiated with health care providers to render care for specified amount of reimbursement based on community ratings modified by group-specific demographics - Created incentives to control costs BUT also led to under treatment and underuse of system - Physician services are given current procedural terminology (CPT) codes, which determines reimbursement from the patients illness

What is healthcare fraud?

- Billing for services not received - Billing for oter services - Telemarketers targeting the elderly, calling and stating they are from Medicare

Cost containment efforts

- Capitated reimbursement: prospective reimbursement for services - Access limitation: primary care provider as gatekeeper, managed care plans (can't see a specialist without a referral) - Rationing: determining the most appropriate use of health care or directing the health care where it can do the most good

Point of service (POS)

- Combine HMO and PPO - If an individual goes outside the network, they will be responsible for most costs unless referred by the PCP

High deductible health plans (HDHP)

- Encourage employees to select plans with lower premiums but more pronounced, up-front cost sharing - Has health care consumer shop around for lower costs - More popular with the healthy, younger population - Put money in and HAS to pay for healthcare expenses

Private insurance

- High costs - Costs based on cost-sharing levels selected and other actuarial factors - Plans are subsidized through tax credits or other mechanisms - Offered by employer or business owners by this for their insurance

Medicare part A

- Hospital insurance: includes inpatient care in hospitals/skilled nursing facilities, hospice care, some home health care - Must pay a deductible for health services - Does not pay for all health care costs - Co-payments required after 60 days - Does NOT pay for long-term care or any unskilled care: this is out of pocket

Who is covered by Medicaid?

- Indigent: severe poverty - Children - Women - Disabled - Impoverished elders - Adults below poverty line in some states (including Ohio)

Barriers to health care access

- Lack of insurance is a major factor associated with lack of access to medical care (uninsured adults are more than 3x as likely to go without needed medical care) - Physical and geographic barriers; rural areas and transportation issues - Sociological barriers among the poor and ethnic Americans; language barriers and fear of reprisals for being in country illegally

Medicare Part C

- Medicare Advantage Plans - Optional "gap" coverage": supplemental Medicare insurance that can be purchased by patients to extend coverage - Provided by private insurance companies an then approved/under contract with Medicare - May include HMOs and PPOs - May include vision, hearing, dental care, and other services not covered in A, B or D

Medicare vs. Medicaid

- Medicare: federal-administered health plan, provides care to those over 65 years - Medicaid: state-administered, provides source of financing health care for some of the poor and the disabled

Flaws of Affordable Care Act

- More Americans have health care but there are concerns over evolving demographics such as aging baby boomers (expensive to take care of) and expansion of medicare costs - Health care costs continue to increase!

Health maintenance organization (HMO)

- More comprehensive care - Lacked enrollees freedom of choice though - Preventative care was covered but speciality care was restricted - Encouraged to reduce costs by only providing most necessary services - Not very popular

Preferred Provider Organization (PPO)

- Negotiated with health care providers for services at reduced rate in exchange for guaranteed increase in consumers - Negotiated reimbursement rate allows cost of plan to be somewhat controlled - Enrollees are offered incentives for choosing health care from within the plans network: if they go out of network, they pay more out of pocket - More flexible than HMOs

How do we bean advocate for our patients regarding insurance?

- Nurses need to become more involved in the economics of health care - Advocate for health promotion/disease prevention funding from both public/private sectors - Need to plan programs, seek funding and evaluate program effectiveness - Constantly seek sources for funding for health programs through any available sources

Indemnity plan (Blue Cross/Blue Shield)

- Paid all costs of covered services - Free choice of provider and services - Allowed persons to manage their own health care - Became costly, because there were no incentives for cost containment - Cadillac plans: good coverage of medical and prescriptions

Private Health Care Insurance

- Paid monthly fee for health care - Paid mostly by employer as a "fringe benefit"

Societal beliefs cause people to still except the health care system to ______, but now there is an increase in ______

- People still expect the health care system to CURE them - But now there is an increase in preventative care interest, health education, health promotion, behavioral changes (research into barriers and lifestyle changes has increased)

Medicare Part B

- Purchased by monthly fee - Helps pay for those out-of-pocket costs that are not covered in Part A: physician services, hospital outpatient care, durable medical equipment (wheelchairs, shower chairs, walkers, hospital beds), some home health care - Premiums prorated based on income - Must pay deductibles and coinsurance (Part A)

Diagnosis related groups

- The hospital is not reimbursed for the total cost of the patients care, they are reimbursed for the specific diagnosis - Example: a hospital is reimbursed for tuberculosis in general (a set cost), not the individual complications that specific patient

How has the focus of US health care shifted recently?

- There used to be little/no incentive to prevent illness or promote health - Curative measures were always the focus but now, with the rising costs, the public is more aware of health promotion/prevention

Cascade of events that led to most services starting to move toward outpatient

1. When employee fringe benefits included health care coverage, expanded benefit packages were developed to attract employees 2. Costs increased so employers passed cost to employees, then insurance companies limited covered services to curtail escalating costs 3. Providers modified delivery of health care to accommodate changes 4. Hospitalization rates declines and outpatient services increased

Why does the ACA allow you to stay on your parents insurance until you're 26?

40% of overall decline in number of insured

Five leading causes of death and illness can be positively affected by ______

Changes in lifestyle: low fat diets, exercise, maintaining optimal body, smoking cessation, stress reduction

Health Care Fraud and Abuse in the US

FBI estimate health care fraud costs the US tens-billions of dollars annually

Medicaid: federal or state?

Federal government sets baseline services but states may provide additional services - Must include: inpatient/outpatient hospital care, pediatric/family nurse practitioners, pregnancy-related care, Vaccines for children, family planning services, rural health clinics, home health care, laboratory and x-ray services and EPSDT (early and periodic screening diagnosis and treatment)

CHIP

For low socioeconomic family who does not qualify for Medicaid

How is aging affecting US health care?

Health care expenditures rise with age dramatically as people live longer

What is a major factor is the success of consumers figuring out ACA?

Health literacy and communication

The United States exceeds other industrialized countries in availability/use of technological advances. How does this affect US health care?

It does save lives but it is expensive! - 20% of the US population consumes 80% of healthcare resources

How did ACA increase preventative services?

Mandated preventative services: - Counseling for management of obesity - Prevention of STDs - Tobacco cessation

How do pharmaceuticals impact the US health care system?

New drugs improve health care outcomes and quality of life BUT increase cost - Market justice!

Prospective payment system

Pre-determined amount of payment for Medicare and Medicaid patients to the hospital for a specific diagnosis. - The hospital is not reimbursed for the total cost of the patients care, they are reimbursed for the specific diagnosis

______ or ______ is largely responsible for accessibility to health care

Private insurance coverage or participation in government programs

How was the United States health care system financed prior to the 1930's?

Self-pay

Eligibility for Medicaid depends on ____

Size and income of family

How should you obtain insurance if not provided by employer?

Use exchanges