11) Health Care Costs and Cost Control Flashcards
What is the biggest issue in healthcare according to Dr. Mairella?
Cost
Why is health care cost important?
- It’s how we get paid
- It affects demand and access
- They’re very high
What happened to US per capita health care spending btwn 1988 and 2013?
It incr 20x
GDP Chart
What area of health care had the highest cost distribution of National Healthcare Expenditure?
Hospital Care (31%)
True or False: The US has the greatest per capita spending on health care.
True
True or False: In the US, govt spending for health care equals out-of-pocket spending?
True
True or False: In the US, we spend the most on health care, but our life expectancy is not any higher than other countries w/lower expenditures?
True
What things are affected by incr health care costs?
- Affordability of Care → Affects affordability of insurance
- Affordability of Insurance
- Burden on Businesses
- Individuals not getting the care they need
- Incr used of Govt Programs → Affects tax payers
Why are health care costs so high?
- Moral Hazard → New discoveries we didn’t have years ago and pt’s want to try them
- Demographic Shift → Aging population
- Decr Consumer Ownership → You can’t get a quote before surgery
- Overutilization
Who is to blame for high health care costs?
Everyone in the system
- Insurance Companies
- HCP’s
- Pt’s
- Malpractice → CYA medicine
What factors drive incr health care costs?
- Price
- Concentration of Market Power → Less options means higher prices
- Administrative Costs → Costs associated w/doing business
- If practitioners take time to do this, they won’t have time to see pt’s
- Volume and Intensity
- Fee-for-service
- Fragmented Care and Care Systems
- Medical Technology
- Medical Liability
- Malpractice Liability
- Incr Prevalence of Chronic Conditions
- Demographic Shifts
True or False: If you spend more money on health care, you will have better outcomes, but after a certain point, this is no longer the case
True
How can price be controlled and what is the problem with this?
Mandated uniform schedule → Bad bc it can cause cost-shifting to other payers, incr utilization, and decr quality/pt satisfaction
What are the 3 types of managed care plans?
- Health Maintenance Organization (HMO)
- Preferred Provider Organization (PPO)
- Point of Service (POS)
Health Maintenance Organization (HMO)
Only pays for in-network care (unless its an emergency); PCP coordinates care
- Doesn’t pay for out-of-network care
- Most restrictive type of plan
Preferred Provider Organization (PPO)
Covers more in-network costs, but will still pay for a portion of out-of-network costs
Point of Service (POS)
Allows beneficiaries to chose btwn HMO and PPO each time care is sought
- Kind of a mix btwn HMO and PPO
What were the early strategies for managing care costs?
- Selective Provider Networks
- Provider Risk Contracting
- Primary Care Gatekeeping
- Utilization Review → Providers were rewarded for decr utilization but this led to underutilization
What is the current strategy for managing care costs?
Disease and Case Management
What is the purpose of Choose Wisely ABIM?
To educate consumers about their choices
What is the “shifting of the curve”?
Improving outcomes w/out incr cost
- The only way we’re going to change anything
What are the “painless” cost control strategies?
- Controlling fees and provider income
- Dropping price of pharma and other supplies
- Decr administrative waste
- Eliminating medical interventions of no benefit → Need to create criteria
- Substituting less costly technologies that are equally effective
- Incr the provision of those preventive services that cost less than the illness
Managed Care
An insurance model created to manage costs; Insurance plan will employ/contract w/an organized system of providers who will deliver services and share financial risk
Explain how managed care works
- Providers make up the plan’s network
- Amount that the plan will pay depends on the network’s rules
- Restrictive plans cost less and flexible plans cost more
What were some general proposals to contain costs?
- Govt Regulation → Ended up being more of an administrative burden
- Adjusting Provider Compensation → Payment cuts to providers
- Investment in IT
- Improved Quality and Efficiency → If we do things better, they’ll cost less
- Prevention → Doing things that cost less sooner to decr need for more expensive care later on
- Incr Consumer Involvement in Purchasing
- Altering Tax Preference for Employer-Sponsored Insurance
What services make up the most excess costs in health care?
Unnecessary Services → $210bil in excess
What are some ways of improving efficiency to decr costs?
- EMR
- EBP
- Quality-Based Payments
- Consumer-directed health care
- Prevention and Chronic Disease Management
- Eliminating Fraud and Abuse
- Managing devo and diffusion of new tech
- Comparative effectiveness
