Health 101
3. Why is the US health care market referred to as "imperfect?" The US healthcare market is imperfect because it does not meet the classical criteria of a free market.
) The health plans acting as intermediaries for the patients typically function as buyers of healthcare services. (b) Patients lack the information necessary to make prudent decisions. Patients generally do not know which new diagnostic methods, intervention techniques, and drugs are available. Information on price and quality is also extremely difficult to obtain. (c) Prices are often set by the health plans. They are not determined by the interaction of the forces of supply and demand. (d) The consolidation of buying power into the hands of private health plans is forcing providers to form alliances and integrated delivery systems on the supply side, thus restricting competition at the individual level. (e) Health insurance shields patients against the cost of health care. Health insurance does not always serve the purpose of true insurance, which is to protect against catastrophic risks. For basic and routine care, health insurance acts as prepayment for health services. There is a moral hazard that once enrollees have purchased health insurance, they will utilize healthcare services. (f) The utilization of health care is generally determined by need rather than price-based demand. Providers can often induce demand for their own financial benefit.
22. Discuss the relationship between technological innovation and healthcare expenditures.
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11. Describe how health care is rationed in the market justice and social justice systems.
1.In the market justice system, healthcare services are rationed through prices and the ability to pay. 2.Under social justice, the government makes deliberate attempts, often referred to as "health planning," to limit the supply of healthcare services, particularly those beyond the basic level of care
10. Briefly describe the concepts of market justice and social justice. In what way do the two principles complement each other and in what way do they conflict in the US system of healthcare delivery?
1.Market justice views health care as an economic good delivered under free-market conditions. 2.Social justice views health care as a social resource.
13. How did the emergence of general hospitals strengthen the professional sovereignty of physicians?
1.hospitals expanded, their survival became increasingly dependent on physicians to keep the beds filled 2.hospital symbolized the institutionalization of health care and became the central core around which the delivery of medical services was organized
37.Age is not the primary determinant for long-term care. Comment on this statement, explaining why this is or is not true.
Age is not the primary determinant for long-term care; functional impairment and ensuing dependency are. Although functional impairment may be more common among the elderly, it does not mean that all elderly people require long-term care. Some children need long-term care from an early age because they were born with physical or mental limitations. Others may develop limited functional capacity in youth as a result of severe trauma or a crippling disease
8. What are the main objectives of public health?
Ensuring conditions that promote optimum health for the society as a whole
38. F0rmal LTC
Formal LTC is provided by various community-based and institutional agencies which get reimbursed for the services they deliver.
2. Why is it that despite public and private health insurance programs, some US citizens are without health care coverage? How will the ACA change this?
Health insurance is offered voluntarily by employers as a fringe benefit. Some employers, especially small businesses, cannot afford to provide health insurance to their employees. The unemployed generally cannot participate in an employer-sponsored program. Under current laws, those who have recently separated from their employment can generally obtain coverage at group rates for up to twelve months from their previous employer. They must, however, pay the entire premium, which many cannot afford. Even when premiums are subsidized by the employer, many low-wage workers cannot afford them. Participation in public programs, such as Medicare and Medicaid, requires meeting certain eligibility criteria. For instance, Medicare is only for the elderly and certain disabled individuals. Medicaid eligibility is determined on the basis of assets and income, and generally only the very poor qualify. ACA is supposed to increase the number of people insured since it requires that all individuals must be covered by either public or private insurance and that insurance companies cover all applicants regardless of pre-existing conditions or sex.
35.HMO
Hospital Maintenance Organization a. Capitation is the primary method of payment; risk is shared with providers b. Uses gatekeeping c. Generally, it has a closed panel d. Responsibility for ensuring that services comply with certain established standards of quality e. It may employ physicians on salary
32.How does hospital utilization vary according to a person's age, gender, and socioeconomic status?
Hospital utilization increases with age. For example, the elderly age 85 and over have the highest utilization. Among younger age groups, children under 1 year of age have the highest utilization. In general, females incur higher use of hospital services than men do, even after childbirth-related utilization is factored out. Generally, hospital use is higher among people of lower socioeconomic status (SES) than the more affluent because poorer population groups are generally in poorer health and have less access to routine primary care.
20. What role does an IT department play in a modern health care organization?
IT departments manage the continuously increasing flow of information and ensure that it is made available in a user-friendly format to health care professionals, managers, payers, and patients, as determined by the organization
29.Discuss the gatekeeping role of primary care.
In a gatekeeping system, patients do not visit specialists without a referral from their primary care physicians. On the surface, gatekeeping may appear to be a controlling mechanism for denying needed care. In most cases, however, the interposition of primary care protects patients from unnecessary procedures and overtreatment. This is because specialists are much greater users of tests and procedures, and such interventions carry a definite risk of iatrogenic complications. Gatekeeping must emphasize the coordinating role of primary care to ensure comprehensiveness and continuity of care.
6. What is socialized health insurance (SHI)?
In a socialized health insurance system, health care is financed through government-
Informal LTC
Informal LTC is provided by family, friends, and surrogates who do not get paid for the services they provide.
19. Medical technology encompasses more than just sophisticated equipment. Discuss.
It includes life-saving procedures, such as bone marrow and organ transplants, as well as curative procedures, such as hip replacements.
24. Briefly describe the Medicare Advantage program
Medicare Advantage is also called Part C, but it does not add specifically-defined new services. It merely provides some additional choices of health plans with the objective of channeling a greater number of beneficiaries into managed care plans
28.Describe how some of the changes in the health services delivery system have led to a decline in hospital inpatient days and a growth in ambulatory services.
Medicare reimbursement and cost-saving efforts of managed care are the two main factors that have led to a decline in hospital inpatient days and a growth in ambulatory services. Medicare instituted the prospective payment system (PPS) for reimbursing hospitals in the mid-1980s. PPS reimbursement based on DRGs provides fixed case-based payment to hospitals. Hospitals, therefore, have a strong incentive to minimize the inpatient length of stay and continue treatment in an outpatient setting. The outpatient sector has fewer payment restrictions. Cost-containment strategies adopted by managed care also stress lower inpatient utilization, with a corresponding emphasis on outpatient services. These financial factors, for instance, have provided a major impetus for the unprecedented growth of home health care. Such changes, coupled with the availability of new technology, have also shifted a number of inpatient surgical procedures to the outpatient setting.
41.Compared with white Americans, what are the health challenges faced by minorities?
Minorities are more likely to be economically disadvantaged than whites.
5. What is the difference between national health insurance (NHI) and national health system (NHS)?
National health insurance is a tax-supported mechanism in which the government guarantees a basic package of health services to all citizens. In a national health system, in addition to financing a basic health package, the government also manages the infrastructure for the delivery of medical care.
18. Who are nonphysician primary care providers? What are their roles in the delivery of health care?
Nonphysician primary care providers include nurse practitioners, physician assistants, and certified nurse midwives. They play a critical role in the provision of health care, particularly primary care to underserved populations. NPs and PAs often give care equivalent to that provided by physicians. Moreover, NPs have been noted to have better communication and interviewing skills than physicians. Clients are more satisfied with NPs than with physicians because NPs generally spend more time with the patients, express greater personal interest in patients, and provide care at less cost. CNMs are considered to be effective in providing access to obstetrical and prenatal services in rural and poor communities. Among the issues that need to be resolved before nonphysician primary care providers can be used fully are legal restrictions to practice, reimbursement policies, and relationships with physicians.
23. What is Medicare Part A? Discuss the financing and cost-sharing features of Medicare Part A. What benefits does Part A cover? What benefits are not covered?
Part A, the hospital insurance (HI) portion of Medicare, is financed by special payroll taxes collected for Social Security Part A covers hospital inpatient services, care in a skilled nursing facility (SNF), home health visits, and hospice care. The noncovered services are long-term care custodial services, and personal convenience services
PPO
Preferred Provider Organization a. Discounted fee-for-service is the primary method of payment; there is little or no risk sharing with providers b. Does not use gatekeeping c. It allows enrollees to go outside the panel d. It uses only contractual arrangements with physicians
30.Why is the hospital emergency department sometimes used for nonurgent conditions? What are the consequences?
Reasons for emergency department use for nonurgent care include erroneous self-perceptions of the severity of ailment or injury, the 24-hour open-door policy, convenience, and unavailability of primary care providers. Since many private physicians do not provide services to Medicaid enrollees because of low reimbursement rates, Medicaid beneficiaries often have no primary care provider. Since emergency departments are required by law to evaluate every patient regardless of ability to pay, Medicaid patients and the uninsured frequently use them for primary care treatments. Even the insured sometimes feel that they need medical attention immediately regardless of how their problem might be classified by a provider. Such patients present themselves at the emergency department because they cannot find needed care elsewhere. Since the emergency department requires sophisticated facilities and highly trained personnel and must be accessible 24 hours a day, costs are high and services are not designed for nonurgent care. Inappropriate use of the emergency department wastes precious resources.
27.What are the differences between the retrospective and prospective methods of reimbursement?
Retrospective: a. Reimbursement is based on actual costs incurred in the past. In other words, costs are evaluated retrospectively. b. The total reimbursement is directly related to length of stay, services rendered, and the cost of providing the services. c. Providers have an incentive to increase costs and not be sensitive to the need for efficiency and cost containment in the delivery of services. d. Cost increases generally become essential for maximizing reimbursement and profits. Prospective: a. Certain preestablished criteria, not costs, are used to determine in advance the amount of reimbursement. b. Reimbursement is related to resource inputs. c. Because of the fixed reimbursement, providers have an incentive to reduce costs and provide services more efficiently d. Cost increases generally lead to a loss to be absorbed by the provider.
15. In the context of globalization in health care services, what main economic activities are discussed in Chapter 3?
Telecommunication infrastructure enables physicians in the United States to transmit radiological images to countries such as Australia where they are interpreted and reported back the next day. Also, telemedicine consultations are available to other parts of the world. (b) Consumers travel abroad to receive medical care in specialty hospitals that offer state-of-the-art technology to foreigners at a fraction of what it would cost to have the same procedures done in the United States or Europe. Physicians and hospitals outside the United States are gaining clear competitive advantages because of reasonable malpractice costs, minimum regulation, and lower costs of labor. (c) Foreign direct investment in health services enterprises. For example, Chindex International, a US corporation, provides medical equipment, supplies, and clinical care in China. (d) Health professionals move to other countries that present high demand for their services and better economic opportunities than their native countries. For example, nurses from other countries are moving to the United States to relieve the existing personnel shortage. (e) Development of health plans for expatriates and the challenges health insurers face in procuring medical care amid rising health care costs worldwide. (f) Overseas demand for medical care by US providers such as Johns Hopkins, Cleveland Clinic, etc.
26.How does the Supreme Court ruling on the ACA affect Medicaid? How does the ACA affect the program?
The ACA had authorized the DHHS to withhold the federal share of financing as a penalty for states that refused to expand Medicaid. The US Supreme Court struck down this mandate. Consequently, states now had a choice to either expand or not expand their Medicaid programs without any penalty from the federal government. The ACA requires coverage for legal residents under the age of 65 with income up to 138% of the FPL. States can no longer use the assets test. Federal matching will be provided at 100% for newly eligible individuals for 3 years (2014-2016), with a gradual reduction each year to 90% in 2020. Beneficiaries who were already in the Medicaid program, coverage for preventive services is at the discretion of the state. States have the option to establish Health Homes (not to be confused with home health care) for Medicaid beneficiaries who have chronic conditions, including serious and persistent mental health conditions.
16. What were the two main aspects of the Supreme Court's ruling in lawsuits filed against the ACA of 2010?
The Court ruled that the majority of ACA provisions—including the individual mandate—were constitutional under Congress' power to tax. The Court, however, struck down a major provision of the law. The Court held that the federal government could not coerce states to expand their state Medicaid programs by threatening to eliminate funding for the existing Medicaid programs in states that chose not to expand Medicaid coverage under the ACA.
25. What are Medicare trust funds? Discuss the current state and the future challenges faced by the Medicare trust funds. What main factors pose these challenges?
The HI trust fund provides the money pool for Part A services, and the SMI trust fund provides the money pool for Parts B and D. Each trust fund accounts for incomes and expenditures.
9. Discuss the main cultural beliefs and values in American society that have influenced healthcare delivery, and how they have shaped the healthcare delivery system.
The US healthcare delivery system has been shaped by two main beliefs and values. First, belief in science led to the application of the scientific method to medicine. The medical model of healthcare delivery is founded on advances in science and technology. In turn, the medical model has led to the tremendous growth in medical science and technological innovation. As a result, healthcare delivery in the United States has been preoccupied almost exclusively with combating disease, whereas the holistic aspects of health and use of alternative therapies have been deemphasized. Delivery of health care has suffered from a dichotomy between health promotion and disease prevention on the one hand and diagnosis and treatment of disease on the other. Few attempts have been made to integrate diagnosis and treatment with health education and disease prevention. Second, health care has largely been viewed as an economic good (or service), not as a public resource. Self-determination and individual capabilities to obtain health services have largely determined the production and consumption of health care—what services will be produced, where, and in what quantity, and who will have access to those services. Thus, we find a clear distinction in the types of services between poor and affluent communities, and between rural and urban locations. The value and belief system also governs the training and general orientation of healthcare providers, type of health delivery settings, financing, and access. Healthcare personnel have been trained to concentrate on physical symptoms. Medical practice has emphasized treatment rather than health education and other means for reducing high-risk behaviors. The concern with non-health has funneled most research efforts away from the pursuit of health into development of sophisticated medical technology. Medical specialists who use the latest technology have been held in higher esteem than general practitioners and health educators. The desirability of health delivery institutions, such as hospitals, is often evaluated by their acquisition of advanced technology. In contrast, commitment of resources to the preservation and enhancement of health and well-being have lagged far behind. Medical practice, in general, has also been directed at keeping the individual healthy rather than keeping the entire community healthy. Financing of health care through individual health insurance coverage has made access to health care a social privilege.
21. Generally speaking, why is medical technology more readily available and used in the United States than in other countries?
The United States leads the world in the development of new technology because of substantial outlays in research and development
40. What are the challenges faced in rural health?
The challenges faced in rural health include poverty or poor economic conditions, lack of healthcare professionals in rural settings, and low population density
12. What are the major differences of Healthy People 2020 from the previous Healthy People initiatives?
The foundational health measures include general health status, health-related quality of life and well-being, determinants of health, and disparities.
1. Name the four basic functional components of the US healthcare delivery system. What role does each play in the delivery of health care?
The four basic components are financing, insurance, delivery, and payment. Financing pays for the purchase of health insurance. Insurance protects the buyers of health coverage against catastrophic risks. Delivery of health care enables people to receive services covered under their health insurance plans. Payment mechanisms allow providers to receive payments for services delivered to the insured.
4. What main roles does the government play in the US health services system?
The government is a major financier of healthcare delivery through the Medicare, Medicaid, and S-CHIP programs. The government determines eligibility criteria as to who can receive services under these programs; it also determines the reimbursement rates that providers will receive for rendering services to Medicaid and Medicare patients. In order to render services to Medicaid and Medicare patients, healthcare facilities must be certified. These organizations must comply with the standards of participation formulated by the government. The government also regulates the healthcare industry through licensing of personnel and healthcare establishments. Under ACA, the government's role is expanding further by mandating that individuals have to get insurance or pay a penalty.
17. Why is there an imbalance between primary care and specialty care in the United States?
The major driving force behind specialists is the development of medical technology. Specialists not only earn higher incomes, but they also have more predictable work hours and enjoy higher prestige both among their colleagues and from the public at large.
7. Discuss the definitions of health presented in this chapter in terms of their implications for the health delivery system.
Within the framework of the medical model, health has been viewed as the absence of illness or disease. The implication is that the health delivery system emphasizes diagnosis and treatment rather than prevention of disease.
33.Nonprofit
a. Owned by community associations or other non-government organizations b. Operated primarily for the benefit of the community c. Nonprofit, which means they cannot distribute profits to any individuals d. Tax exempt
34.For-profit
a. Owned by individuals, partnerships, or corporations b. Financial returns to the owners or stockholders is an important objective c. Pay taxes d. A significant number are physician-owned specialty hospitals.
14. Discuss the government's role in the delivery and financing of health care, with specific reference to the dichotomy between public health and private medicine.
dichotomy has remained between public health and private medicine.
42.What are some of the reasons for increased healthcare costs attributable to the providers of medical care?
• Providers in many instances set their own charges, which are higher than what the same charges would be under free-market conditions. • Providers are in a position to induce demand for services, leading to higher utilization than what is necessary. Many of the procedures performed are medically unnecessary. • Providers have done little to promote healthy lifestyles and the prevention of disease because they have mainly espoused the medical model for healthcare delivery. • Because of legal risks, providers have engaged in the practice of defensive medicine to protect themselves against potential malpractice lawsuits. • Small area variations suggest that physicians can vary widely in their medical decision making and use of healthcare resources. Scarce medical resources are wasted when they are inappropriately used.
