Finance chapter 1 & 2 Flashcards
Substitutability
- resources can be dedicated to many uses
- what is the value of a alternate resource?
Heterogeneous preferences
- ones persons pleasure is another persons poison
Marginal cost=
Change in cost for one-unit increase in quantity
Marginal utility=
Change in utility for one-unit increase in quantity
(utility is sometimes called benefit)
to increase production you might have to increase ___
marginal cost of production
Demand Curve
- quantity demanded at alternative prices
- if price changes you move along the curve
What causes changes in the demand curve?
- income (insurance reimbursement increase)
- Price of related goods (LPN/LVN wages)
- preferences (CNO preferes RN)
What does the demand curve measure?
marginal benefit- which is what you would be willing to pay for something
what is the supply curve?
- quantity supplied at alternative prices
- if prices change you move along the curve
- measures marginal curve for workers
What cause a shift in the supply curve?
- size of workforce
- input prices
What does the affordable care act do?
- quality and value improvement
- center for medicare and medicaid innovation
- integrated health systems (accountable care organizations) - value based purchasing program
- bundled payment program for medicare
- review of insurance plan rate increases
- independent payment advisory board aimed to extend life of medicare trust fund
- 85% of insurance premiums must be used for care
what is included in the federal regulatory cost containment
- Value based purchasing (accelerated by ACA)
- Accountable care organizations
- Medicare accès and CHIP reauthorizaiton act (MACRA)
how does the value based purchasing effect federal regulatory cost containment?
establishment of center for medicare and medicaid innovation
how does accountable care organization effect federal regulatory cost containment?
organizations of healthcare provider that are accountable for the quality, cost, and overall care of patients
how does medicare access and chip reauthorization act (MACRA) effect federal regulatory cost containment?
changed how medicare pays providers and created two payment tracks within the quality payment program
State regulation
- more extensive than federal regulation due to licensing of individual providers (MD, RN, etc) and certified the need laws require permission fro the state to add services
- state tort liability
- medical malpractice lawsuits indirectly regulate healthcare
What has led to the biggest changes in health care reimbursement since 1960s with the introduction of medicare and medicaid
Affordable care act
Health insurance
- prepayment for health services
what are the main sources for health insurance
- federal (medicare, medicaid, TRICARE (military) and veterans affairs (VA)
- state (medicaid)
- commercial insurers
- self-insurance
Reimbursement
- how entities get paid for providing a health service
- service is often paid by a third party for health services received
Domain 7: based practice
- pertains to organizational and systems leadership for quality improvement
- knowledge of business and finance principles including those related to health insurance and reimbursement are critical for DNP especially working in managerial and leadership roles.
- knowledge of payers, documentation, billing and coding processes and the prospective payment systems (PPS) complement the clinical and scientific knowledge base the DNP has developed
what is a health insurance policy?
agreement between a person (payer) and an insurance company that providers certain medial benefits per the policy
who is the individual?
(and or employer as often is the case) pays a premium
what is the role of the insurance company?
agrees to provide certain services typically with co-pays and deductibles
why does healthcare occur in a imperfect market?
- uncertainty
- asymmetry of information (providers and patients have different levels of information)
- non marketability of risks inherent in medial practice
About what percentage of Americans are uninsured?
10.9%
What are the three groups of the uninsured?
- foreign (born residents who are not US citizens)
- young adults (19-25)
- low-income families with an annual household income of less than 25,000
what is the especially vulnerable group of uninsured citizens?
children under 18 (CHIP- medicaid program for children/youth)
Medicare
- coverage for individual 65+
- also those with disabilities or ESRD
- often the largest payer source for hospitals
Medicare (hospital insurance) Part A
- hospital care
- limited care in a skilled nursing facility (SNF)
- funds mostly from social security taxes
Supplementary medical insurance (Part B)
- physician and certain other health care professional services
- hospital outpatient care and certain other services
- funded form general revenues and enrollee premium payments
Medicare + Choice (part C)
- services funded b a managed care organization
Medicare prescription drug coverage (pard D)
- funded primarily though individual premiums
Facts about Health care reimbursement
- 18% of gross domestic product
- majority of spending
- 31% for hospitals
- 20% for physicians
- 10 % for prescription drugs - 75% provides care for individuals with chronic conditions
what are the five basic types of payments to providers
- cost/cost plus
- fee for service
- fixed price
- capitation
- value
diagnosis related group (DRG) based reimbursement
- prospective payment system (PPS) operated based on DRGs
- recent history this has been the most prominent payment model in health care
what are the three value based reimbursement options?
- hospital value based purchasing (HVBP) program for reimbursement
- hospital readmissions reduction program
- hospital acquired conditions program
what are some other value based payment models ? (7)
- bundled payment
- accountable care organizations
- shared savings
- shared risk
- provider sponsored health plans (PSHPs)
- alternative payment model
- merit-based incentive program
Health insurance and reimbursement in non acute settings?
- long term care (skilled nursing, intermediate care and subacute services. assisted living)
- community service agencies
- dialysis
- rehab
- physician offices (primary care, specialty care, owned/managed care. self operated care)
- home health
- behavioral health
- hospice care
- social service agencies (adult day care)
- dental, optometry
- schools
- correctional facilities
APRN reimbursement
- depends on if the APRN is allowed by applicable state and federal regulations practice and bill independently and is able to obtain direct reimbursement for those independently delivered services
DNP roles related to reimbursement
- safe
- timely
- effective
- efficient
- equitable
- patient centered
DNP role related to reimbursement and cost reduction
- reduce variation
- remove unnecessary care
- use lowest cost settling possible
- reduce overall need for hospital services
In 2011, a surplus of registered nurses was reported in many parts of California
(Bates et al., 2011). Identify possible explana tions of the emergence of a surplus.
What might have changed in the labor market? How can you depict this in a
chart? What changes would switch the labor market to reflect a nursing shortage
in the future?
Medicare rules pay NPs 85% of the fee paid to physicians for ambulatory care.
NP professional organizations are lobbying for equal reimbursement. What
implications would that have? How might such a change affect the quality of
care? Access? Costs?
A growing share of health insurance plans have high deductibles, so that an
individual must spend up to $6,450 before insurance begins to pay for services.
What problem(s) are these insurance plans trying to solve? Answer this question
using economic terminology related to health insurance. For what reasons might
these plans be successful? In what ways might these plans backfire?
The fundamental problem of health policy is presented in Figure 1.13. Countries
that have single-payer or other universal health insurance systems, such as
Canada and Germany, face this problem, as does the United States. How might
health policy try to address the fundamental problem in the context of universal
health insurance? Identify specific programs or strategies that might be used,
and consider their potential benefits and drawbacks.
List three ways the DNP provides leadership in helping a healthcare entity
optimize reimbursement from insurers.
Choose two preferred financial and patient care outcomes from the following list
and describe two ways to achieve each of them:
a. Reduce overall hospital admissions.
b. Reduce average length of stay.
c. Reduce avoidable hospital readmissions.
d. Reduce high-tech imaging services.
e. Reduce amount CMS pays per beneficiary.
Discuss three of the CMS’s major value-based programs. Define the programs and
the criteria that are needed for each of these programs to be successful.
Can the kind of care proposed in an IDS be provided in a system that has a
primary focus on either provider or corporate incomes and profit accumulation?
Why is it financially important for hospitals to institute effective discharge-
planning programs?
Partnerships between acute care and community-based settings improve
continuity of care. How do these partnerships influence reimbursement for
health systems?
