Chapter 12 Economics of Health Care

Question 1

Economics affect all aspects of healthcare; nurses traditionally avoided arena of economics instead focusing on direct care of client; healthcare costs cont rise and consume greater proportion of resources, health of indivs, fams, aggregates sig influenced by economics; sev factors influence healthcare costs
Use healthcare increases as age; majority costs healthcare spent towards older pop - need it more and use it more - fact of life; not much preventative care in country; focus on curative measures (help recover, rehab, live past life after disease - maybe should have done work before hand to prevent disease ahead of time)
Leading causes of death and illness + affected by changes in lifestyle: communities where able walk around, safe, not food desserts (lot healthy food options) where can help make better choices which changes lifestyle
Historical perspective –
Use of health care –
Lack of preventative care –
Lifestyle and health behaviors –
Societal beliefs –
Technological advances –
Aging of society –
Pharmaceuticals –
National Shift to for-profit health care –
Health care fraud and abuse –

Answer 1

Factors influencing health care costs

Question 2

costs have risen exponentially since the mid-1960’s

Answer 2

Historical perspective –

Question 3

According to economic principle the existenc of a desirable product and the demand for the product and available of financial funding influences use of product
Health care is a product Demand for product increases when the need expands and funding is available
Despite recognition of healthcare costs and multiple attempts to address it spending on healthcare 2x of other countries; little incitentive to prevent/promote health

Answer 3

Use of health care –

Question 4

curative measures have traditionally been the focus

Answer 4

Lack of preventative care –

Question 5

the 5 leading causes of death and illness can be positively affected by changes in lifestyle
Healthy lifestyle does not ensure good health by shows longevity and productivity
Low fat diet, exercise, optimum weight, smoking cessation, stress reduction modify/prevent chronic issues
Some insurance companies provide monetary incentives such as reductions in premiums that help demonstrate changes in a healthy lifestyle

Answer 5

Lifestyle and health behaviors –

Question 6

belief in cure rather than prevention, combined societal safety nets encouraged society to be passive participant in healthcare
Not have worry since have insurance
HCP slow embrace preventative healthcare

Answer 6

Societal beliefs –

Question 7

Modern society come to expect these; adv remarkable but also expensive
numerous and expensive
Influences costs: telehealth - not reimbursed at same level for provider as in-office visit because is little bit less

Answer 7

Technological advances –

Question 8

Healthcare expenditures rise with age, dramatically so at older ages
Older than 65: 14.1% total pop in 2015; expected double in 2050; live longer % over 80 increases so consuming greatest amount healthcare resources will rise more rapidly than those that provide monetary support for resources
Lot more people over age 65 than below age 30; paying into sys - for trust fund and put into fund - doing is paying for care of people using sys now - money they have to use; any left over by time people get to age otherwise dependent on workforce paying into sys; pop dwindling in age something catches up to us - not as many people working as retired and need know who will fund us

Answer 8

Aging of society –

Question 9

utilization of drugs (prescription and OTC) - influenced healthcare economics, increased costs
Using drugs at increased costs - increases healthcare costs because charge more for certain drugs, diff insurance plans cover at diff rates; medicare started covering meds under part D; help absorb some costs, newer drugs super expensive: costs lot money to do research to develop them and market them but also find way to make money so generics already out at lower costs

Answer 9

Pharmaceuticals –

Question 10

from nonprofit - contributor to costs; emphasis on profit, mechanism of achieving higher reimbursement developed effect of healthcare costs

Answer 10

National Shift to for-profit health care –

Question 11

Decreasing this helps decrease total healthcare costs; billions spent on healthcare and struggle control increased risk of fraud and abuse
FBI: healthcare fraud industry costs the US tens of billions of dollars annually
All areas in healthcare experience fraud medicare and medicaid have highest levels
Costs 10s of billions annually in US - make direct impact on healthcare costs crack down heavily on fraud and abuse - people claiming disability for med issue that not have and able fake through sys

Answer 11

Health care fraud and abuse –

Question 12

Nurses in providers of care and consumers of services need be knowledgable about terms to be understand of healthcare financing
Access –
Coinsurance –
Copayment –
Deductible –
Gatekeeper –
Medicaid –
Medicare –
Medicare Advantage –
Medigap –

Answer 12

Terminology used in health care financing

Question 13

ability to obtain health care services in a timely manner, at a reasonable cost, by a qualified practitioner, and at an accessible location

Answer 13

Access –

Question 14

cost sharing required by a health plan whereby the individual is responsible for a set percentage of the charge for each service

Answer 14

Coinsurance –

Question 15

cost sharing required by the health plan whereby the individual must pay a fixed dollar amount for each service

Answer 15

Copayment –

Question 16

cost sharing whereby the individual pays a specified amount before the health plan pays for covered services

Answer 16

Deductible –

Question 17

person in a managed care organization who decides whether a patient will be referred for specialty care

Answer 17

Gatekeeper –

Question 18

Joint federal- and state-funded programs that provide health care services for low-income people

Answer 18

Medicaid –

Question 19

a health insurance program for people who are 65 years of age or older, are disabled, or have end-stage renal disease

Answer 19

Medicare –

Question 20

part of Medicare by which recipients may choose to enroll in a coordinated care plan

Answer 20

Medicare Advantage –

Question 21

privately purchased plan designed to supplement Medicare coverage

Answer 21

Medigap –

Question 22

1965 enacted first movement toward universal healthcare coverage with creation of medicare and medicaid; medicare: fed program intended to lower cost of healthcare for those meeting requirements
Medicare: under fed funding; funded by the workers - they are paying into each it every time get a paycheck
4 parts
Eligible at age 65 if US citizen - automatically qualify - no monthly premium if you or your spouse paid Medicare taxes for a certain amount of time while working (premium-free Part A)
Eligible if older than 65, if the following apply:
Covers:
Will be Deductibles and co-insurance applies some cases but gen not high

Answer 22

Medicare - Part A (Hospital Insurance)

Question 23

People who are disabled OR
Have End-Stage Renal Disease (ESRD) OR
Have amyotrophic lateral sclerosis (ALS)

Answer 23

Eligible if older than 65, if the following apply: - Medicare - Part A (Hospital Insurance)

Question 24

Inpatient hospital care, skilled nursing facility care, hospice care, some home health care
Most US residents eligible for premium free medicare part A benefits when reach 65
Big entities

Answer 24

Covers: - Medicare - Part A (Hospital Insurance)

Question 25

Eligable for part A may purchase part B for Monthly premium/fee (may be higher depending on income) - premium diff for all: based on circumstances and gen income/assets Pay for OOP costs and preventative and screenings services Mostly covers doc office visits, testing, OP procedures Covers a lot: Pay Deductible and co-insurance applies

Answer 25

Medicare - Part B (Medical Insurance)

Question 26

Preventive and screening services Physician services Outpatient services Ambulance services/transport Durable medical equipment (DME) Mental health (inpatient, outpatient, and partial hospitalization)

Answer 26

Covers a lot: - Medicare - Part B (Medical Insurance)

Question 27

Replaces Medicare A and B If already qualify for A can purchase part C if wish; replaces Medicare A and Medicare B; costs vary by tier of part C chosen; offered by private insurance companies: BCBS, Aetna - info not on govt websites; qualify could go to private insurance and request part C through private insurance Medicare adv plan Coverage Provided by private insurance companies approved by, and under contract with Medicare Costs/coverage services vary by plan Individual must be eligible to have Medicare Parts A and B and must live in the service area of the plan Enrollment steadily grown Covered services vary by plan and may include vision, hearing, and dental care as well as other services and supplies not covered by Medicare Parts A, B, and D Deductible and co-insurance varies by plan

Answer 27

Medicare - Part C (Adv plans)

Question 28

Initiated in 2006 to help defray costs of prescription drugs D = Drug coverage Optional If eligible recipients choose this option must enroll in approved prescription drug plan; most participants pay monthly premium, ded, copay, OOP based on plan and drugs Cost varies by plan (higher-income consumers may pay more) - make more pay more Prescription costs through roof and to help afford meds for people on Medicare Coverage, deductible, copayments, and out-of-pocket costs varies by plan - pay OOP and not just given to; must opt into

Answer 28

Medicare - Part D (Drug Coverage)

Question 29

fed, not available to everyone: available to citizens over 65, ESRD, ALS, disability - if meet any of those then qualify

Answer 29

Medicare:

Question 30

Mostly supplemental insurance; can buy addition to A and B; cover extras not covered by A/B Not pay for meds Some seniors have this Must have original Medicare Part A and B at time to have this Supplements original Medicare benefits Have to Pay a monthly premium in addition to premium for Medicare Part B Each person must have their own policy (no group plans) Renewable guarantee as long as the premiums are paid Does not cover Part D – need to purchase separate policy Doesn’t cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing Supplements A and B - everything else Bridge gap not covered in A and B; supplement for benefits; pay premium; not cover drugs; drugs part part D

Answer 30

Medigap policy (considered supplemental insurance)

Question 31

Funded by BOTH fed and state funding HHS - runs distriptution of policies and regulations of Medicare and Medicaid - hand down to state and state gets to choose if have Medicaid and what cover underneath it; not all states have same coverage underneath Medicaid: some states have better coverage Public welfare assistance program that was initially designed to finance health care coverage for the indigent Joint venture with state and federal funding Eligibility for program is determined by each state; based on income and family size - qualify if below poverty line: depending on state poverty line can be low/high and may knock out of range with increased wages Initially was intended to focus benefits to children, pregnant women, the disabled, and impoverished elders Change with the implementation of the ACA, as funds were made available to provide health care for all adults below the poverty line – within states that elected to participate Federal government sets baseline eligibility requirements, but states can alter eligibility Federal government mandates covered services, but state governments may provide more services - can tack things on Many Children younger than 18 are eligible for the Children’s Health Insurance Program (CHIP)

Answer 31

Medicaid

Question 32

Mandated services: Must include inpatient and outpatient hospital care, physician services, vaccines for children, family planning services, rural health clinic services, home health care, laboratory and radiography services, and Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) services for children younger than 21 Additional optional services may be provided by state governments: optometrists services and glasses, intermediate care facilities for mentally disabiled, rehab, PT, hospice Inpatient and outpatient hospital care - other items that go along with that

Answer 32

Federal government mandates covered services, but state governments may provide more services - can tack things on - Medicaid

Question 33

Provides insurance for children of low-socioeconomic families who do not qualify for Medicaid - above poverty line but cannot afford healthcare for child this would cover them Kids version of Medicaid Administered by the states, which share the cost with the federal government

Answer 33

Many Children younger than 18 are eligible for the Children’s Health Insurance Program (CHIP) - Medicaid

Question 34

First established in 1930’s - effort provide care and avoid bankruptcy HCP establish health insurance plans; BCBS: EX indemnity plan Usually covered through employer, option to purchase it; pick plan and employer and you pay some - variety plans Private healthcare funded by us; buy it and employer offers it but more employer employee kind of thing Can get private if not working for someone but more expensive Types of health care plans Private insurance – “health exchanges"

Answer 34

Private health care insurance

Question 35

Indemnity Health Maintenance Organization (HMO) Preferred Provider Organization (PPO) – most common type of insurance plan Point-of-service (POS) High-deductible health plans (HDHP)

Answer 35

Types of health care plans

Question 36

Cover all costs of services provided to enrollee Became costly because no plans for containment

Answer 36

Indemnity

Question 37

Designed provide more comprehensive care; lacks enrollee freedom of choice of provider Preventative care encouraged but specialty care restricted Encouraged to reduce costs by providing most necessary services

Answer 37

Health Maintenance Organization (HMO)

Question 38

Negotiated with HCP for services at reduced rates in exchange for guaranteed increases in customers Negotiate reimbursement rate: allows cost of plan to be controlled; plan enrollees offered cost incentives when choose healthcare within plans providers More flexible than HMO but to have full benefits have to choose in-network providers; more expensive than HMO

Answer 38

Preferred Provider Organization (PPO) – most common type of insurance plan

Question 39

Combine elements of PPO and HMO; less pop

Answer 39

Point-of-service (POS)

Question 40

Early 2000s; method involve consumer in healthcare decisions; 2nd most pop insurance plan

Answer 40

High-deductible health plans (HDHP)

Question 41

Cost insurance high and increasingly high when sharing costs with employers; millions US self-employed/work for company that not have health insurance for all employees: focus of ACA health exchanges: exchanges: govt regulated market place for insurance plans; in market place people can choose 4 tiers of standarized plans: bronze, silver, gold, platinum, cost each plan might vary

Answer 41

Private insurance – “health exchanges”