Professionals in Health

1. Professionalsin Health The Health Care Delivery System

2. Overview of the Health Care System • Health Services are varied- based on perceived need and based on decision of the physician.

3. Financial • Funded by private insurance, personal funds or governmental health plans • The federal government (for the most part) does not deliver health care. • The federal government is involved with financing health care to the elderly (Medicare) and to the indigent (Medicaid)

4. Health Care Industry:4 Types of Service • 1. Health Promotion- (Practice preventative medicine) reduce risk of illness, maintain optimal functioning, follow healthy lifestyles • Vaccinations • Prenatal nutrition classes • Exercise classes

5. 2. Illness Prevention Education aimed at involving the consumer in own health • recognition of risk factors • occupational safety

6. 3. Diagnosis and Treatment • Most used • Technology has improved effectiveness • Increased in cost

7. 4. Rehabilitation • Restoration of a person to normal function after a physical or mental illness • hospitals • homes • rehabilitative institutions

8. Levels of Care • Primary- ex. Physicians office • Secondary – ex. Hospital • Tertiary- ex.- Long Term Care, Rehab

9. Healthcare Defined by Function or Type of Service • Inpatient- hospitals that offer “acute” care of no more than 30 days • Long Term Care – patients need continued nursing services for greater than 30 days – nursing homes • Outpatient-Ambulatory Care, clinics, education, rehab, therapy • Community based- day cares, home health, half way houses • Governmental – VA hospitals • Hospice-provides dignified death

10. Hospitals • Third largest business in the U.S. • Employs 75% of health care personnel • Is a complex industry-categorized by 3 methods • function or type of service • length of stay • ownership

11. Ownership • Proprietary – • Doctor’s Hospital, Sarasota, FL • Non-proprietary • Mercy Medical Center, Cedar Rapids, IA • Government/ Public – • Veterans Administration Medical Center • State – • University of Iowa Hospitals and Clinics • Local (County or City) • Davis County Hospital, Bloomfield, IA

12. Ambulatory Care Examples • Medical and Dental Practices • Hospital Outpatient • Industrial Health Units • Public Health Clinics

13. Behavioral Health Services • Acute Inpatient services on a psychiatric unit • Outpatient therapy – through a counselor or physician’s office • Old terminology-Mental Health

14. Home Health Care • Care provided in home • Nursing care • Home health aide • Assist with household tasks • Medical supplies • Physical and Occupational Therapy

15. Managed Care • HMO’s- Health Maintenance Organization- provides basic and supplemental health maintenance and treatment series to enrollees • Kaiser Permanente- California • Group Health - Washington D.C.

16. Consumer Rights; The American Hospital Association Patient Bill of Rights • Receive information pertaining to diagnosis and treatment • Receive information on fees for services rendered • Receive continuity of care • Refuse diagnostic and treatment procedures • Enjoy privacy and confidentiality • Right to seek a second opinion • Change providers if hot satisfied

17. Health Care Costs • There are 4 major problems with U.S. health care relative to cost • 1. Exorbitant cost • 2. Health care is fragmented- consumers no longer have a family doctor. Instead may have specialists that do not communicate with one another. Leads to duplication of services and increased costs

18. Health Care Costs continued • 3. Technological changes lead to need for continual education and training costs for practitioners • 4. Uneven distribution of health care

19. Paying for Health Care • Background-Four factors have changed health care in the past 20 years • 1. Fear of Medicare going bankrupt. Led to prospective payment (DRG’s) 1983.

20. DRG’s (Diagnostic Related Groups) • Hospitals are paid a set amount for each patient in any of the established 518 DRG’s • The government will not pay beyond the set fees for the individual illness, no matter how long the patient stays or what services are received.

21. Result of DRG’s • Decrease in length of stays • Need for increased efficiency • Physicians paid with a similar system in 1992. (Resource Based Relative Value System/RBRVS)

22. Paying for Health Care • 2. Shift in Balance of Power • Labor unions lost power in the 1980’s • Workers had come to expect high frequency of service with no copayments • Employers shifted to less costly managed care plans, that had copayments and more limits on services covered.

23. Paying for Health Care • 3. Surplus of Doctors • 1960’s- government took steps to increase number of physicians to care for Medicare population • Supply of doctors increased 57% from 1970-1990 while population increased by 30% • Result: Oversupply, competition, reorganization and advertising

24. Paying for Health Care • 4. Medical Technology • Services are provided outside of the hospital due to better technology. • Free standing surgical clinics, out-patient clinics

25. Changing Objectives of Health Insurance • Early 1900’s- beginning of health insurance in the U.S. Goal is to eliminate the economic burden of illness

26. After WWII • Medical resources expanded. • Government eliminated taxation on employer provided insurance premiums. • Fringe benefits increased instead of wages • Insurance rates increased instead of cost containment

27. WWII-1980’s • Increase percentage of national income channeled to health. • Cost control not pursued • Medicare and Medicaid paid provides based on past charges- therefore providers raised charges instead of containing costs

28. 1980’s to present • Managed care growth in an effort to contain cost • Hospitals diversify to include ambulatory care • Hospitals attempt to contain costs

29. % of GNP Spent on Health Care • 1965 5.9% • 1979 9.1% • 1997 14%

30. Health Care Financing • Hospital 40% • Physician 20% • Long-term care, pharmacy, dental 32% • Misc 8%

31. Who Pays? • Most is paid through government programs and health insurance (third party payers) • Those with private insurance have better access to resources • Most employers offer managed care options

32. Who Pays? continued • 52% of Medicare recipients are in HMO’s • Patient care decisions are determined by the organization to which they subscribe and primarily are determined by cost.

33. Regulation of MCO’s • Consumer complaints of physicians not being in control have increased. • 980 bills of legislation in 49 states were introduced in 1997 to provide consumer protection

34. Physician Reimbursement • Fee for service: the problem is establishing what is included in a service. The more service provided = more cost • Capitation: physician is paid a fixed amount per person per fixed unit of time. The physician is incentives to provide only preventive and necessary services • Salary: the provider is hired by organization and HMO’s. The incentive is to be productive.

35. Health Insurance in the U.S. • Who is covered? • Virtually 100% of population over 65 yrs is covered by Medicare • 3 out of 5 over 65 have supplemental coverage (private) • 80% under 65 have private insurance for inpatient services • 60 % under 65 have insurance for outpatient services • 40% under 65 have dental insurance

36. Health Care Coverage Has Changed • The number of benefits has increased • Employers pay 70% of premiums

37. History of Insurance Coverage • 1930’s- Blue Cross/Blue Shield. BC=Hospital coverage BS=Outpatient services • BC plans spread the risks of losses across all segments of the population. All premiums were the same

38. 1950’s • Commercial insurance offered lower rates than BCBS. Resulted in competition. • Insurers denied groups with high risk, the poor and the aged • Led to Medicare and Medicaid

39. Medicare • Federal program for those 65 & over; some disabled are eligible • Entitles same coverage as middle income people have • Run by HCFA (Health Care Finance Administration of the U.S. Department of Health and Human services (USDHHS) • Now changed to CMS (Center for Medicare & Medicaid Services)

40. Part A Hospital insurance Has deductible and coinsurance Pays 60 days of inpatient per hospital stay plus 20 days of skilled care Part B Medical insurance Has a monthly premium, deductible with the patient paying 20% of the approved amount 2 Parts to Medicare

41. Medicaid • Federal/State cooperative program to insure poor/indigent • Income must be below the poverty level. • Some providers don’t accept these patients due to lower reimbursement. • 60% of nursing home bills are paid by Medicaid

42. Managed Care • Definition- A system in which employers and health insurers channel patient to the most cost effective place of service

43. HMO • Health Maintenance Organization • Benefits cover hospital, physician and ancillary services. • Incentive is for efficient and effective care • Greatest drawback is patient must find a provider who is a member of the HMO • 20% of US population has HMO coverage

44. PPO • Preferred Provider Organization • A group of providers who have joined together to provide health care • Providers may be hospitals, physicians, etc.

45. fee for service contractual agreement organization of providers Discounts Free Choice Economic incentives PPO

46. Biggest Impact of Managed Care • Decrease in hospital inpatient use.

47. Effect of Managed Care on Health Care Providers • Increase demand for family practitioners, nurses and therapists outside of the inpatient hospital setting. • Rehab services will continue to be at a high demand