Chapter 6 And 9 Study Guide Flashcards
(98 cards)
What is the description/characteristics of a not-for-profit health agency?
-Health agencies and hospitals may be for-profit or not-for-profit
-Not-for-profit agencies make money, but profits are used to offset the cost of other services that do not generate income or to improve the infrastructure of the agency’s facilities, as they must “serve the health care needs of the community”
-Maintain prices at an affordable level to keep tax their exempt status
-They do not pay federal, state, or county taxes
-Both for-profit and not-for-profit health agencies receive payments from Medicare, Medicaid, private insurance companies, and out-of-pocket payments from clients
-The top 10 hospitals earned over $163 million in total profits from patient care, and only 3 were for-profit
1. Nonprofits used their money to expand services, fund research, or build capital projects
2. Hospitals with the highest prices generally earned greater profits, making the case for a need to curb excessive fees
What are examples of nonprofit and voluntary agencies that provide services for vulnerable populations?
-There are 2,968 nonprofit and 1,322 for-profit hospitals in the United States
-The American Red Cross
-And, a recent study of hospital profitability found that 7 out of 10 of the most profitable U.S. hospitals were nonprofits, including Gundersen Lutheran Medical Center, Stanford Hospital and Clinics, and Louisville’s Norton Hospital
What is a public health care agency/sector?
-Public health agencies perform a wide variety of activities, some requiring legal authority to ensure enforcement (e.g., environmental pollution, communicable disease control, food handling)
-These agencies provide important data, including the collection and monitoring of vital statistics and communicable diseases
-They also conduct research, provide consultation, and sometimes financially support other community/public health efforts
-These activities can be grouped under one of the three core public health functions: assessment, policy development, and assurance
-Examples includes federal, state, and local agencies
What are the core pubic health functions?
-Public health agencies perform a wide variety of activities, organized around the three core public health functions of assessment, policy development, and assurance
-States retain the primary responsibility for their citizens’ health and are responsible for implementing federal policies
-At the local level, a city government health agency, a county agency, or a combination of both assess, plan, and serve the health needs of their community
-Protect the environment, workplaces, food
What is the federal public health agency?
-The federal public health responsibilities include the following:
1. Policymaking and implementing legislation
2. Financing public health through health care services, grants, contracts, and reimbursements to states and local public health agencies
3. Protection of public health and prevention activities through surveillance, research, and regulation
4. Collecting and disseminating data (national data, health statistics, surveys, research)
5. Acting to assist states in mounting effective responses during public health emergencies (e.g., natural disaster, bioterrorism, emerging diseases)
6. Developing public health goals in collaboration with state and local governments and other relevant stakeholders (e.g., Healthy People 2030
7. Building capacity for population health at federal, state, and local levels by providing resources and infrastructure
8. Directly managing health care delivery through categorical grant programs (maternal–child health programs, Medicaid, Medicare, community health centers) and services (public health laboratories, Indian health clinics)
At the national level, public health organizations are clustered into what four groups of government agencies?
-U.S. Public Health Service (USPHS) is staffed by the Commissioned Corps, which consists of over 6,700 uniformed health professionals
1. Employees of the USPHS work in many different federal agencies
-The U.S. Department of Health and Human Services (USDHHS), including the Centers for Disease Control and Prevention (CDC)
-Federal departments that oversee areas impacting health, such as the Departments of Labor, Education, Environmental Health, Agriculture, and Transportation, among others
-Federal agencies that focus on international health concerns, such as the U.S. Agency for International Development (USAID) and the Office of International Health Affairs, are under the auspices of the U. S. Department of State
What is the state public health agency?
-The state health department (SHD) is responsible for providing leadership in and monitoring of comprehensive public health needs and services in the state
-SHDs promote population health, focusing on prevention and protection
-They also administer federally funded programs
-General functions of SHDs include the following:
1. Statewide health planning
2. Intergovernmental and other agency relations
3. Intrastate agency relations
4. Certain statewide policy determinations
5. Standards setting
6. Health regulatory functions
7. State laboratory services
8. Surveillance and epidemiology
9. Training and technical support
-The Association of State and Territory Health Officials (ASTHO) surveys SHDs; the latest published data were collected in 2019 and 2016
-The person in charge of the SHD is generally appointed by the governor and is, most often, a physician
1. In fact, 64% of state health officials have a medical degree
What is the local pubic health department?
-The primary responsibilities of LHDs are to assess the local population’s health status and needs, determine how well those needs are being met, and take action toward satisfying unmet needs
-Specifically, they should fulfill these core functions as follows:
1. Monitor local health needs and the resources for addressing them
2. Develop policy and provide leadership in advocating equitable distribution of resources and services, both public and private
3. Evaluate availability, accessibility, and quality of health services for all members of the community
4. Keep the community informed about how to access public health services
-LHDs provide public health clinical programs to help people lead healthy lives and specific population-based health services within their jurisdictions
-The most commonly provided clinical services were as follows:
1. Adult and childhood immunizations
2. TB screening and services
3. Women, Infants, and Children (WIC) services
4. Screening for HIV and other STDs
5. Blood lead screening
6. Home visits
-The most common population-based programs provided include the following:
1. Adult and childhood immunizations
2. Communicable/infectious disease
3. Environmental health
4. Family planning and WIC program
5. Syndromic surveillance
6. Primary preventive programs for nutrition, tobacco, and physical activity
-Where a board of health exists, it holds the legal responsibility for the health of its citizens
1. More than three quarters of LHDs report to a local board of health; this is more common for small health departments compared to medium and large departments
How is the public health funded?
-Federal public health agencies are largely funded by the federal government, but about 75% of that funding ends up at the state and local levels, along with other private and public organizations
-At the state level, federal grants and monetary support, along with state tax dollars, fund programs
-The majority of federal grant money is provided by the Prevention and Public Health Fund created by the ACA. From its 2018 budget, $586 million of the total $800 million budget went to state and LHDs
-The money that makes its way to LHDs often comes through competitive grants and block grants; it is supplemented by local taxes
-The lack of consistency and transparency limits public health officials’ ability to defend public health programs when budget cuts are threatened
1.Given that public health agencies are vital safety net services, the decreases in budgets and staffing are very challenging
-About 80% of state health agencies derive 40% of their funding from federal sources. As of 2016, 56% of state health agencies were accredited
-LHDs also receive federal funding, a portion of which are “pass through dollars,” meaning the state receives the funding from the federal government but sends the money on to LHDs who provide the services
What is a private health sector organization?
-Private groups include professional associations and nongovernmental organizations (NGOs) focusing on health-related issues
-Health-related professional associations influence the quality and type of community/public health services available in the United States through the promotion of standards, research, information, and programs
1. Many also lobby legislators
2. These organizations are funded primarily through membership dues, bequests, and contributions
What are examples of private health sector organizations?
-Health issues focused nongovernmental organizations (NGOs)
1. e.g., American Cancer Society, American Diabetes Association
2. Supply funds for research, to lobby legislators, and to educate the public
*Funding is through private contributions
-Health related professional associations
1. American Public Health Association (APHA)
2. Association for Community Health Nursing Educators (ACHNE)
-Others, such as the National Society for Autistic Children, Planned Parenthood Federation of America, and the National Council on Aging
1. Focus on the needs of special populations
-Some NGOs provide services and health care
1. These include Habitat for Humanity, the American Red Cross, and the Public Health Institute
-A few agencies focus on disease prevention, such as the Trust for America’s Health and the Prevention Institute
1. Many foundations provide grant support for health programs, research, and professional education as part of their mission (e.g., Robert Wood Johnson Foundation, Bill and Melinda Gates Foundation, National Philanthropic Trust)
What is the Social Security Act?
-During the Great Depression, the U.S. government enacted the first significant legislation that affected the health and well-being of a wide range of citizens, the Social Security Act of 1935
-This law ensured greater public health programs and provided retirement income to participating workers aged 65 years and older
-The act included aid to dependent children, unemployment insurance, and supported educational programs similar to those in the Sheppard–Towner Act
What is managed care?
-Became popular in the late 1980s
-It refers to systems that contract to coordinate medical care for specific groups in order to promote provider efficiency and control costs
-Managed care is a cost-control strategy used in both public and private sectors of health care
-Care is managed by regulating the use of services and levels of provider payment
1. This approach is utilized in HMOs, ACOs, EPOs, and PPOs
2. Roughly 70 million Americans are enrolled in HMOs, compared to 90 million enrolled in PPOs
-Managed care plans operate on a prospective payment basis and control costs by managing utilization and provider payments
1. Because costs are tight, preventive services are generally encouraged, so that more expensive tertiary care costs can be avoided if possible
Types:
1. Health maintenance organizations (HMOs)
2. Preferred provider organizations
3. Point-of-service (POS) plans
4. High-deductible health plans (HDHPs)
5. Exclusive provider organizations (EPOs)
6. Competition and regulation
7. Drivers of costs
What are health maintenance organizations?
-Systems in which participants prepay a fixed monthly premium to receive comprehensive health services delivered by a defined network of providers
-Insurance premiums have continued to rise more than wage increases
-HMOs are the oldest model of managed care. Several HMOs have existed for decades (e.g., Kaiser Permanente), but others have developed more recently
-The unique set of properties of HMOs includes the following:
1. A contract between the HMO and the beneficiaries (or their representative), the enrolled population
2. Absorption of prospective risk by the HMO
3. A regular (usually monthly) premium to cover specified (typically comprehensive) benefits paid by each enrollee of the HMO
4. An integrated delivery system with provider incentives for efficiency
*The HMO contracts with professional providers to deliver the services due the enrollees, and the basis for reimbursing those providers varies among HMOs
-Some HMOs follow the traditional model, employing health professionals (e.g., physicians, nurses), building their own hospital and clinic facilities, and serving only their own enrollees
-Other HMOs provide some services while contracting for the rest
1. HMOs have a 20% higher rate of consumer complaints than customers with PPO plans
2. In response to concerns from managed care clients, a patient bill of rights stipulating the patient’s right to timely emergency services, respect and nondiscrimination, as well as participation in treatment decisions and a more consumer-friendly appeals process was developed
What are preferred provider organizations?
-A network of physicians, hospitals, and other health-related services that contract with a third-party payer organization (health insurer) to provide health services to subscribers at a reduced rate
-Employers with these plans offer medical services to their employees at discounted rates
1. In PPOs, consumer choice exists
*Enrollees have a choice among providers within the plan and contracted providers out of the plan
*PPOs practice utilization review and often use formal standards for selecting providers
2. In 2016, PPOs were the most common form of health insurance offered by employers—with 48% of workers able to choose this type of policy; companies with over 200 employees have the highest rate of PPO usage at 52%
3. However, enrollment in PPOs began to decline, and increases were noted in HDHP/SO policies
*In 2019, 44% of workers had PPOs, and 30% had HDHP/SOs
*About 19% were enrolled in an HMO
What are point-of-service plans?
-A variation on the plans
-Permits more freedom of choice than a standard HMO or PPO
-Enrollees choose a primary physician from within the POS plan who monitors their care and makes outside referrals when necessary
-At an extra cost, enrollees can go outside the HMO or PPO network of contracted providers unless their primary physician has made a specific referral
-POS is a type of hybrid or combination of an HMO and PPO
-In 2016, about 10% of employees were enrolled in POS plans and only 7% were in a POS plan in 2019
What are high-deductible health plans?
-Growing in popularity
-Among employees in small and large size companies a high-deductible health plan with a saving option (HDHP/SO) is often favored over HMOs
1. The plan has higher deductibles and out-of-pocket maximum limits
2. However, once these deductibles are met, the plan pays 100% of in-network health care
-In addition, the HDHP plan is the only health plan that allows for money to be put aside pretaxed to be used to pay for deductibles and out-of-pocket expenses
1. The average annual out-of-pocket cost in 2018 for high-deductible, high-premium HDHP-HSA plans were not to exceed $6,650 for single and $13,300 for family coverage
*Similar saving plans tied to HDHP plans vary in maximum costs
2. Deductibles have risen 212% between 2008 and 2018, and over a quarter of covered employees have plans with $2,000 deductibles (or more)
*For employers with <200 employees, 42% of covered employees have at least $2,000 deductibles
3. In 2018, 29% of employers offering HDHPs also included a savings plan option, either HSA or HRA
*HDHPs are more often available with large firms than with small ones, 58% versus 27%
What are exclusive provider organizations?
-Other than for medical emergencies, an exclusive provider organization (EPO) plan only covers services and providers within the network
1. Benefits of this type of plan are lower prices than an HMO and not needing a referral from a primary health care provider
-However, if an individual goes out of network, 100% of the medical bill is owed by that person
1. A provider that was covered when you bought your policy may no longer be part of the plan the following year, and you will not necessarily know this until you are billed for the visit
-In 2016, there were projected to be about “60% more EPOs being sold through the federal insurance exchange” than the previous year
What is competition and regulation?
-Often, competition and regulation in health economics have been viewed as antagonistic and incompatible concepts
1. Competition describes a contest between rival health care organizations for resources and clients
2. Regulation refers to mandated procedures and practices affecting health services delivery that are enforced by law
-In a society in which there are long-held values of freedom of choice and individualism, competition provides opportunities for entrepreneurial endeavor, free enterprise, and scientific advancement
1. Yet, regulation also serves an important role in promoting the public good, overseeing equitable distribution of health services, and fostering community-wide participation
-Health care incorporates four major types of regulation—laws, regulations, programs, and policies
-Leaders in the field have concluded that both competition and regulation are needed
How do laws work in relation to regulation?
-Laws that regulate health care include any legislation that governs financing or delivery of health services (e.g., Medicare reimbursement to hospitals)
-Regulations guide and clarify implementation; they are issued under the authority of law and are part of most federal health care programs (e.g., CHIP eligibility requirements)
-Regulatory policies have a broader focus and involve decisions that shape the health care system by channeling the flow of resources into it and setting limits on key players’ actions (e.g., state nurse practice acts, health manpower training, ACA rules on preexisting conditions)
-Programs and policies are often developed in order to control costs and improve quality (e.g., HRRP, HIPAA)
-In the early 1980s, government cost-control measures were greatly diminished as the Reagan era ushered in deregulation
1. The passage of the Omnibus Budget Reconciliation Act caused dramatic changes affecting health care
2. The federal government, having failed to contain rising health care costs, shifted responsibility for the public’s health and welfare back to state and local governments
3. From all this grew the competition-versus-regulation debate
-The 1990s were characterized by numerous hospital mergers and movement from nonprofit to for-profit status
1. More than 86% of the population in 1991 was covered by some form of prepaid health insurance, largely due to the effects of Medicare and Medicaid
*The Clinton health plan failed to gain support and many hospitals downsized and reduced the number of nurses on staff
*Managed care became more popular, but by the late 1990s, fears were raised about MCOs withholding necessary care and a consumer “backlash” resulted
-Many states and the federal government enacted benefit laws between 1990 and 2008, in response to these concerns
1. The ACA was passed into law in 2010
2. However, we still feel the results of decades of disjointed policies, and one of the most obvious consequences deals with competition in health care
-Competition, its proponents say, offers wider consumer choice and positive incentives for cost containment and enhanced efficiency; that is, consumers are free to select among various health plans on the basis of cost, quality, and range of services
-One downside is fragmentation of services, lack of coordination, and subsequent waste
1. Integrated delivery systems, such as Kaiser Permanente’s fully integrated system, or more loosely organized public–private partnerships, could lead to improved quality, outcomes, and reduced costs
What are the problems with regulations?
-Regulation advocates for almost 20 years have argued that there are at least four problems associated with the competition model:
1. Consumers often do not make proper health care choices because they have limited knowledge of health services
2. Competition may discriminate against enrolling certain consumers, especially high-risk, high-cost patients, thus excluding those who may need services the most
3. The competition model may not encourage enough teaching and research—expensive elements of our present system
4. Quality may be sacrificed to keep costs down
-The following tenets often guide discussions on health care reform efforts:
1. Reduction in health care prices occurs when there is more competition among hospitals and among insurers
2. Reducing government regulations will lead to lower health care prices
3. Higher prices can reflect higher-quality care
4. Higher provider costs are reflected in higher prices
What are drivers of costs?
-Drug spending is a “primary driver of higher cost” in the present U.S. health care system, and a continuing trend, with $1,011 per person spent on prescription drugs annually compared to $422 for other developed countries
1. While the U.S. Veterans Administration has a 30% discounted rate for prescription medications, the federal government is not allowed to negotiate drug prices for Medicare or Medicaid programs
-Other drivers of health care costs include the following:
1. An aging population, new technologies, and biologics (e.g., biosimilars like synthetic insulin and monoclonal antibodies)
2. Lifestyle/behavioral choices (about 70% of health care costs may be related to smoking, abuse of alcohol, and obesity), inefficient systems (e.g., duplication of services/procedures, preventable medical errors, unwarranted prescriptions/visits/treatments, spotty quality improvement)
3. Medical malpractice costs, cost shifting, increased demand for health care, government regulations, and other market changes, like consolidations/monopolies
-We will need to decide how to move forward, either building on the ACA by offering a more meaningful public option and expanding markets while continuing to promote employer health insurance or making a significant shift to a single-payer system provided to all citizens
-With the lack of quality health outcomes in the United States, as described above, even if everyone received health insurance, how could quality be assured?
1. Some believe that the overall performance of the health care system should improve as everyone gains access to care
2. However, some early evaluation of value-based incentive and penalty programs (e.g., Hospital Value-Based Purchasing Program, Hospital Readmission Reduction Program [HRRP]) reveal that they have not been “effectively calibrated” to achieve their expected results and need more fine tuning to produce better outcomes
-A system that provides incentives to both providers and patients to use services efficiently and effectively may produce better results
-Another factor that may also improve outcomes is a means of providing health care consumers with pertinent, timely information so that they can be more active participants in their care
What is managed competition?
-Market-based effort to provide wide access to health care while keeping costs down
-Have been part of the discussion around health care reform
-Two plans that are worth further review are managed competition and universal coverage, with and without a single-payer system
-Pros:
1. Acceptance of all
2. Tax incentives
3. Tight regulation
4. Outcome management standards board
5. Improved access
-Cons:
1. Untested
2. Limited consumers’ choices
3. Failure to provide equitable and universal coverage
What is the economics of health care
-Economics is defined as the science of making decisions regarding scarce resources. It is concerned with the “production, distribution, and consumption of services”
-Economics permeates our social structure—it affects and is affected by policies
-Consequently, health is closely tied to economic growth and development, in that a healthy population is necessary for adequate national productivity
-A nation with a healthy population has better worker productivity; longer life expectancies provide an incentive for investment in education and innovation
1. These factors encourage income growth and higher GDP
-Ample evidence exists for a health–income gradient, as personal income (specifically poverty) is linked to health status; people with lower incomes report poorer health and greater prevalence of diseases than those with higher incomes
1. They also live shorter lives
-Public health policies and programs that promote health and wellness can impact economic development by improving health outcomes, often on a more cost-effective basis than other interventions
-Economic methods commonly employed by public health include analysis of:
1. Regulatory impact (How will this new law effect costs and behaviors?)
2. Budget impact (How cost-effective is a new program or intervention?)
3. Cost–benefit analysis (How much will a disease outbreak investigation cost, and how many lives will it benefit?)
4. Decision modeling (How can mathematical models help determine cost-effectiveness of vaccine programs, pandemic spread, disease management, and injury prevention programs?)
-Health economics can be better understood by examining the two basic theories underlying the science of economics: microeconomics and macroeconomics
1. In addition, concepts of health care payment must be understood
-Issues such as cost containment, competition between providers, accessibility of services, quality, and need for accountability continue as areas of major concern
-Several ACA provisions address these issues as well:
1. The law established the Centers for Medicare & Medicaid Innovation, which tests ways to improve quality and efficiency of care
2. Payments to hospitals and physicians increase or decrease based on the quality of care provided, and all hospitals must publicly report several indicators of quality.
-Evaluation of how these provisions affect the supply and demand for health services is ongoing