Ch 5: Healthcare Flashcards
Classifications of healthcare (3)
- Primary care
- Refers to work of health professionals who act as a first point of consultation for all patients in healthcare system. - Secondary care
- Refers to healthcare services provided by medical specialists and other health professionals who generally do not have first contact with patients. - Tertiary care
- Specialised cosultative healthcare, usually for in-patients and on referral from a primary or secondary health professional, in a facility that has personnel and facilities for advanced medical investigation and treatment.
Commercial insurance products designed to fund healthcare can be divided into four groups:
- Optimal alternative:
- For a person who opted not to use the public service facilities and took insurance to cover expenses in the private sector. - Optimal compliment:
- Gap covers or waiting policies (designed to pay for elective procedures sooner than state would provide) - Compulsory alternative:
- Used in an environment where there are people that the gov considers can afford to buy comprehensive cover. - Compulsory complement:
- Compulsory top-up plans would be used in an environment where individuals are compelled to buy policies to pay for dental plans and services not provided by the state.
What are managed care organisations and the definition of managed care
- Organisations that combine clinical and statistical techniques to manage risk, reduce cost and improve quality by encouraging the delivery of cost-effective, high-quality healthcare.
- For-profit entities, used by healthcare insurers in order to manage risk and provide appropriate healthcare
- Managed care def: Managed care aims to manage claim costs while maintaining or even improving access to quality healthcare services. The system integrates the delivery and financing of healthcare, by providing the insurers with some control over the healthcare service providers through provider networks
Managed care interventions objectives (5):
- Reducing the cost of medical events
- Improving the quality of care provided
- Ensuring that medical services are provided in an appropriate setting
- Ensuring that high-risk members are managed and receive appropriate care
- Reducing the number of unnecessary medical services
Risks in managed care that can be transferred from the funder to the provider are:
- Price risk: the fee received by the provider does not cover variable costs or makes an inadequate contribution to overheads
- Intensity risk: More services are needed in the encounter than anticipated
- Severity risk: Cases are more severe than anticipated
- Frequency risk: More people need treatment than anticipated
- Actuarial risk: Demographics are not as anticipated, leading to incorrect pricing.
- Marketing risk: Enrolment is not as anticipated, thus demographics are not as anticipated which contributes to actuarial risk.
Strategies used by managed care organisations to meet objectives and minimise risk (5)
- Provider networks (retsricting access to a select network of specialists and GPs with whom preferential charging structures have been agreed)
- Reimbursement methods (Alternative reimbursement methods to align incentives of provider and funder - move away from fee-for-service to payment structure that encourages high-quality, cost-effective healthcare)
- Risk sharing (instead of just transferring all risks, share in risks to give provider some level of security) i.e. incentives
- Risk adjustment (remuneration should be based on the health risk of patients - should not disincentivise treatment of high-risk individuals)
- Formularies and treatment protocols in managed care (restricting which medicines may be used for certain conditions or a requirement for a GO referral to be obtained before visiting a specialist)
Successful operation of alternative reimbursement arrangements requires:
- Availability of adequate and reliable clinical data to allow the risk-taker to ensure that treatment complies with the specified clinical protocols and cost benchmarks
- Control cycle to ensure that clinical protocols are modified based on feedback following an analysis of outcomes achieved.
Principles of designing provider incentives to share risks in an optimally-managed delivery system (7)
- Natural response vs desired objectives (natural response to incentive should be consistent with desired performance objectives)
- Provider control (Incentives should be based on what the provider can and should control)
- Equitable risk sharing and sense of partnership with the funder (incentives should be equitable in terms of provider risk and reward - to the extent that financial risk is transferred to provider they should be able to share in any realised surplus)
- Simplicity
- Provider involvement (promotes sense of ownership)
- Realistic goals
- Education and support (support to meet goals)
Areas of concern associated with managed care (4)
- Provider networks may restrict access to care
- Providers may resent external parties imposing clinical protocols on them and influencing the way in which the practice medicine.
- Managed care may compromise quality of care provided to patients by encouraging under-servicing of patients by providers.
- Use of formularies and other financial-based managed care initiatives may result in additional cost being transferred from the scheme to the member with no overall cost reduction
Appropriate measures to be used in benchmarks to assess quality if care provided under an alternative reimbursement arrangement: (6)
- Patient mortality rate
- Specialist referral rate
- Hospital admission rate
- Procedure complication rate
- Chronic medication adherence
- Patient questionnaires
Costs of healthcare are increasing due to: (4)
- Misalignment of incentives between provider and funder
- Medical tech advancements combined with user expectations resulting in high cost treatment
- Cost increases resulting from a fairly static population
- Fraud
Examples of treatment protocols
- Medicine risk management - restrictive formulary governing which medicines may be used for certain conditions (mainly generic medicines)
- Maternity programme - only allow caesarean sections where these are deemed clinically necessary by a healthcare provider
- Specialist and GP networks - Restrict access to a selected network of GPs and specialists with whom preferential charging structures have been agreed. Healthcare providers on the network may also agree to adhere to certain clinical protocols.
Which reimbursement methods will transfer what risk from the funder to the provider
Price risk: Negotiated fixed fee per service
Intensity risk (more services are needed around the bed than expected): Negotiated fixed fee per day that a patient stays in hospital, irrespective of treatments received
Severity risk (Condition of paitient is more severe than expected): Global fee for certain conditions/treatments (irrespective of severity or recovery period)
Frequency risk (More people need services than expected); Capitation
Actuarial/demographic risk (proportion of premium paid to provider, shares in the risk pool, share risk that business mix is not as expected or less members join scheme than expected or pricing risks
