Health Care USA Chapter One

1. Health Care USAChapter One At the end of the class, you should: Understand the basics of the U.S. health care system. Be able to outline four components of the health care delivery system. Be able to differentiate the U.S. health care system and the free market. Have an overview of health care in other countries.

2. Health Care USA There are two key objectives of a health care delivery system: To provide universal access and to deliver services that are cost-effective. To meet pre-established standards of quality.

3. In the United States Health care…. • Is not delivered through a standard linear system, but instead through a kaleidoscope of financing, insurance, delivery, and payment mechanisms that are not standardized and are coordinately loosely.

4. Health Care Delivery There are four functional components… • Financing • to purchase insurance or to pay for health care services consumed • Insurance • to protect against catastrophic risk

5. four functional components… Delivery To provide health care services. Payment To reimburse providers for services rendered. Health Care Delivery

6. Healthcare Delivery • Access to health care is determined by four main factors: • Ability to pay • Availability of service • Payment • Barriers to enablement

7. Healthcare-Financing • Financing and insurance mechanisms are divided into… • Private (employer-based or privately purchased health insurance). • Public (Medicare and Medicaid) sectors.

8. United States • Key elements that contribute to the number of uninsured persons…. • Unemployment • Lack of a requirement for employers to provide insurance • Lack of a requirement for employees to purchase health insurance when it is offered • Lack of eligibility for government-funded programs.

9. Healthcare Delivery • The problem of rising health care costs was a major force driving the rise of… MANAGED CARE.

10. Healthcare – Managed Care • Managed care is a system of health care delivery…. • That seeks to achieve efficiencies by integrating the basic functions of health care delivery • Employs mechanisms to control utilization of medical services • Fees for services rendered.

11. United States Healthcare • All major developed countries except for the United States offer national health care programs. • These programs provide universal access through health care delivery systems • that are managed by the respective governments and provide a defined set of health care services to all citizens.

12. The Health Care Workforce Employs approximately 10 million people 850,000 doctors 3 million nurses 168,000 dentists 208,000 pharmacists 700,000 administrators 300,000 physical therapy, occupational therapy, speech 5,810 hospitals 17,000 nursing homes 5,720 mental health hospitals 11,700 home health and hospice agencies 800 primary care programs (HIV, black lung, homeless, migrant workers…) 300 medical, dental and pharmacy schools 1,500 nursing programs

13. Healthcare Delivery More numbers: • 190 million Americans with private ins • 39.6 million Medicare beneficiaries • 41.4 million Medicaid recipients • 1,000 insurance companies • 42 BlueCrossBlueShield plans • 540 health maintenance organizations • 925 preferred provider organizations

14. National Health Systems There are three models: • National health insurance (NHI): • a tax-supported national program in which services are rendered by private providers but paid for by the government.

15. National Health Systems • National health system (NHS) • a tax-supported national program in which the government finances and also controls the health care service infrastructure.

16. National Health Systems • Socialized health insurance (SHI): • a program in which health care is financed by government-mandated contributions by employers and employees, and in which health care is delivered by private providers.

17. Healthcare Delivery Uniqueness of the U.S. health care delivery system… • Lack of a central agency • Lack of universal access • An imperfect market. • The presence of third-party insurers and multiple payers.

18. Healthcare Delivery Imperfect Market … • Item pricing • obtain fees charged for service • (surgeon’s price) • services can’t be determined prior to procedure • Package pricing • bundled fee for a group of related services • Capitation • all health care services include one set fee per person, more all-encompassing

19. Healthcare DeliveryImperfect Market cont’d… • Phantom providers • bill for services separately • anesthesiology, pathologist, supplies, hospital facility use • Supplier/provider-induced demand • Physicians have influence on creating demand for their financial benefit • Physicians receive care beyond what is necessary • (i.e. follow-up visits, tests, unnecessary surgery)

20. Healthcare Delivery Third-Party Insurers and Payers • Patient is first party • Provider is second party • Intermediary is third party • a wall of separation between financing and delivery • quality of care is a secondary concern

21. Healthcare Delivery • The practice of defensive medicine.* *The practice of ordering medical tests, procedures, or consultations of doubtful clinical value in order to protect the prescribing physician from malpractice suits.

22. Healthcare Delivery • An understanding of the health care delivery system is essential… • Effective management of health services. • Help managers understand the shifts occurring in the system • Enable senior managers to take advantage of opportunities and minimize threats evaluate the need for training, and understand the impact of new regulations.

23. Healthcare Delivery Has: • duplication • overlap • inadequacy • inconsistency • waste • complexity • inefficiency • financial manipulation • fragmentation

24. Healthcare Delivery • The system is comprised of a set of interrelated and interdependent components designed to achieve common goals. • The systems framework provides an organized approach to understanding the various components of the U.S. health care delivery system and it is comprised of five key components; system foundations, system resources, system processes, system outcomes, and system outlook.

25. The System Framework E N V I R O N M E N T I. SYSTEM FOUNDATIONS • CulturalBeliefsandValues,andHistoricalDevelopments • “Beliefs, Values, and Health” (Chapter 2) • “The Evolution of Health Services in the United States” (Chapter 3)

26. The System FrameworkSystem Features II. SYSTEM RESOURCES • Human Resources • “Health Services Professionals”(Chapter 4) • Nonhuman Resources • “MedicalTechnology” (Chapter 5) • “HealthServices Financing” (Chapter 6)

27. The System Framework System Features • III. SYSTEM PROCESSES • The Continuum of Care“Outpatient and Primary Care Services”(Chapter 7) • “Inpatient Facilities and Services”(Chapter 8) • “Managed Care and Integrated Organizations“(Chapter 9) • Special Populations“Long-Term Care”(Chapter 10) • “Health Services for Special Populations”(Chapter 11)

28. The System Framework System Features • IV. SYSTEM OUTCOMES • Issues and Concerns“Cost, Access, and Quality”(Chapter 12) • Change and Reform“Health Policy”(Chapter 13)

29. The System Framework FUTURE TRENDS • V. SYSTEM OUTLOOK • “The Future of Health Services Delivery” (Chapter 14)

30. Terminology • Access - The ability of an individual to obtain health care services when needed. In the United States, access is restricted to (1) those who have health insurance through their employers, (2) those covered under a government health care program, (3) those who can afford to buy insurance out of their own private funds, and (4) those who are able to pay for services privately. Health insurance is the primary means for ensur­ing access.

31. Terminology • Administrative costs-Costs that are incidental for the delivery of health delivery services. Those costs are associated with • Billing/collection of claims for delivered services. • Time incurred by employers for selection of insurance carriers. • Costs incurred by insurance and managed care organizations for marketing their products and cost negotiation for rates.

32. Terminology • Balance bill-the billing of leftover sum by the provider to the patient after the insurance has only partially paid the charges initially billed. • Capitation- A set amount (or a flat rate) to cover a person’s medical care for a specified period, usually monthly. • Defensive medicine demand- Excessive medical tests and procedures performed as a protection against malpractice lawsuits, otherwise regarded as unnecessary. • Enrollee- (member) refers to the in­dividual covered under the plan.

33. Terminology • Health plan (or “plan,” for short). The contrac­tual arrangement between the MCO and the enrollee—including the collective array of covered health services that the enrollee is entitled to—is referred to as the health plan. It uses selected providers from whom the enrollees can choose to receive routine services. This primary care provider—often a physician in general practice—is customarily charged with the responsibility to determine the appropriateness of higher level or specialty services. The primary care provider refers the patient to receive specialty services if deemed appropriate.

34. Terminology Continuum of Services - Medical care services are generally classified into three broad categories: • Cura­tive (e.g., drugs, treatments, and surgeries). • Restorative (e.g., physical, occupational, and speech therapies) • Preventive (e.g., prenatal care, mammograms, and immu­nizations).

35. Terminology “Continuum of Services” Health care service settings: • No longer confined to the hospital and the physician’s office, where many of the aforementioned services were once deliv­ered. • Several new settings, such as home health, subacute care units, and outpatient surgery centers have emerged in response to the changing configuration of economic incentives.