Hours 7 and 8 Flashcards
How health insurance works/managed care
what has been the trend in U.S. health care spending? How much and amount per capita?
steadily increasing; in 2010, 17.4% GDP, $2.598 trillion/$8,412 per capita; in 2016, 17.9% GDP, $3.337 trillion/$10,348 per capita which is an increase of +8.4%
how fast has health care expenditures increased compared to the general inflation rate?
8 times
how do US health care costs compare to other countries?
we rank number 1 in health care costs spending $19.4 trillion, $5 trillion more than the next leading country, Japan
where is the health care dollar being spent?
leading is hospital care (31.7%), next physician and clinical services (19.8%), other personal health care (15.2%)
what demographic is the US spending a lot of money on?
older patients
what health issues have the highest cost?
most expensive being heart disease, cancer, trauma, mental disorders; the 15 most expensive conditions accounting for 44% of spending and those with chronic conditions cost more
why are these increases in health care costs important to address?
health status is impacted if patients cannot pay bills; it puts pressure on businesses making them less competitive affecting employment, money spent on health care cannot be spent elsewhere, this impacts national debt
what is the national debt as of June 30, 2018?
$21.195 trillion or $64,373 per capita
why do we need health insurance?
risks- the world is a dangerous place in addition to uncertainty- a bad event happens
what are some risks of certain events, use examples from 2014?
Drug/medication overdose, MVA, fire, falls, lightning, flood
what were the leading causes of death in 2015?
heart disease, malignant neoplasms, chronic lower respiratory diseases and unintentional accidents
why health insurance?
according to Teitelbaum and Wilensky - “Individuals purchase health insurance to protect themselves against the risk of unforeseen and costly events”; insurance spreads the risks of costly events over a larger population
what is a beneficiary or insured?
the health insurance consumer and if you have health insurance you are a beneficiary or insured
what is a premium?
the annual amount paid by or on behalf of a beneficiary to purchase covered medical services
what are covered medical services?
medical goods and services defined in the insurance contract or policy
deductibles? define this term
an annual, or plan year amount, that must be paid before the insurance company pays anything
co-payment
A fee paid every time a beneficiary receives certain services form a provider like a $50 payment every time you go to the ER
Do co-payments count toward meeting the deductible?
Usually not, depends on the plan
what is Co-insurance?
a percent, usually 20%, that the beneficiary must pay after the deductible has been met.
what is maximum Out of pocket?
Maximum amount that will be paid by the beneficiary during the plan year
what does In-Network mean?
refers to providers that are contracted with the insurance company. Insurance company pays more of the bill
what does Out-of-Network mean?
providers not contracted with the insurance company. Patient pays more of the bill
what is a formulary?
list of prescription drugs covered by insurances, they are often placed in tiers and copayments differ by tier level in that you can have generic versus name brand, pharmacy versus mail order
what is a high deductible plan?
the employer pays 100% of the premium, higher annual deductible, and higher maximum out of pocket
what are some issues with traditional insurance?
fee for service reimbursement, where providers are paid for the volume of services provided, which does not place limits on access to services; healthy people do not want to buy insurance because people have different levels of risk tolerance; co-payments, co-insurance, and deductibles are regressive meaning that they can limit access to care for those at lower income levels; there is no relationship between payments and clinical effectiveness; 50% of individuals are covered by the employer and the insurance does not follow the individual so changes in employment status can create gaps in coverage
what are some examples of Payors?
governmental health insurance programs; private health insurance programs; out of pocket; all paid by individuals who are patients or will likely be patients at some point in time
when was medicare signed into law?
so along with medicaid, on July 30, 1965 signed by Lyndon B Johnson
after we medicare was signed into law, what was the next most significant legislative change?
Dec 8, 2003 when George W. Bush signed the Medicare Modernization Act - Part D
what, as quoted by Lyndon B Johnson, were the intended consequences of Medicare?
“No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings they have so carefully put away over a lifetime . . . No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents . . .
how has the medicare beneficiaries and the number of workers per beneficiary changed and expected to change over time say from 2000 to 2030?
so it is expected to decrease from 4 workers per beneficiary to 2.4 with a gradual increase in number of beneficiaries
What is medicare?
it covers individuals age 65 or older, under age 65 with certain disabilities and any age with permanent kidney failure.
How much of the population does medicare cover?
15.5% of the US population
how large is medicare?
second largest federal program after social security
***how are medicare enrollees expected to change over the years from 2000 to 2030?
its expected to double from 40 million to 80 million between 2000 to 2030; 84% of the beneficiaries are aged, 15.6% are disabled and 0.3% are ESRD patients
how many parts to Medicare are there?
four parts: A,B,C,D
what does medicare part A cover?
inpatient care in hospitals; skilled nursing facility care; hospice care; home health care
what does medicare part B cover?
services from doctors and other health providers, outpatient care, home health care, durable medical equipment, some preventative services
what is not covered by Part A and Part B?
most dental care, eye exams related to prescribing glasses, dentures, cosmetic surgery, acupuncture, hearing aids and exams for fitting them
what is covered by medicare part C?
it covers all services provided by parts A and B and can include part D, maybe even offer dental, vision and other services. The commercial plan receives a fixed payment per beneficiary and may charge a supplemental premium if they provide additional services
what is medigap coverage?
coverage provided by private insurance companies that help pay the beneficiaries share of Medicare-covered services such as deductibles, co-insurance, and co-payments
what is Medicare Part D?
so part D provides drug coverage if the beneficiary joins a Medicare Prescription Drug Plan that is available through private companies; these average $28-$35
how is part D insurance determined?
the monthly premium is determined by the insurance company with an annual deductible
how is the copayment and coinsurance of part D medicare insurance paid?
its paid directly to the pharmacy
what is the coverage gap of part D medicare insurance?
40% brand name, 51% generic
in the event you need catastrophic coverage, how much do you pay for part D medicare insurance?
you only pay coinsurance
How does medicare pay hospitals?
hospital inpatient services is set amount per discharge regardless of the cost based on diagnosis related groupings and this is referred to as prospective payment system. So at a fixed rate, the hospital may have to absorb the cost
what are other hospital payments?
critical access hospitals, sole community providers, disproportionate share hospitals and graduate medical education payments
how does medicare pay physicians?
through physician services which is a payment based on resource based relative value system which assigns a value to each service provided based on the amount of time and resources required to provide the service
what is medicaid?
it covers low income and the disabled
what does federal law mandate that medicaid cover?
cover poor pregnant women, children, poor elderly, and the disabled
how is medicaid administered?
states administer the program and can choose to cover additional services
how is medicaid funded?
its provided by states with federal support which funds approx 57% of all medicaid costs though this consumes on average 25% of state budgets and covers approx 60 million individuals
how much does Medicaid cover?
it covers 88.1% of the costs of inpatient hospital services
how are health care providers paid?
fee for service and discounted fee for service
what is fee for service?
a set fee per unit of service-charges
what is discounted fee-for-service?
fee per unit of service negotiated between insurance companies and providers providing actual payments
what is the criticisms of fee for service?
all the risk is on the payor and none on the provider, and little incentive to order less expensive services
what is sharing of risk?
insurance companies and governmental payors want to shift risk to the providers, whom do not necessarily want to accept risk
what is the purpose of managed care?
manage costs and outcome (quality)
what are the features of managed care?
comprehensive, coordination and planning, education of patients and providers, assessment of quality, and control of costs
what are the benefits and services of managed care organizations?
inpatient and outpatient care, physician services, preventative and wellness service, emergency services, diagnostic services, and home health
what are the key characteristics of MCOs?
1) selection of providers based on quality, cost, location and services
2) focus on population health
3) use of care management tools
4) quality assessment
5) cost controls
what are the care management tools?
1)Coordination of care directed by primary care providers
PCP makes referrals for other services
2)Disease management for patient with chronic conditions such as asthma
3)Use of evidence-based clinical guidelines
what is quality improvement?
meeting accreditation standards and participation in performance improvement initiatives
what are some cost controls?
medical necessity, utilization management, prior authorization, second and third opinions
what is medical necessity?
care is within accepted standards within the community
what is utilization management?
denies payments for services not deemed appropriate
what is prior authorization?
required before performing certain services
what are second and third opinions?
required before performing certain services
what is case management?
coordination of care for complex and high cost cases
what are some forms of managed care?
health maintenance organization (HMO), exclusive provider organization (EPO), point of service plans (POS), preferred provider organizations (PPO)
what are the characteristics of an HMO?
providers are often salaried or are parts of groups that contract with the HMO, negotiated rates with purchasers of health care, coordinate and control services provided, established quality standards
what are the EPO characteristic of EPO?
No out-of-network options, main difference from HMO. If you go out of network, no payment will be paid for services
what are the PPO common characteristics?
provide a network of providers, does not limit where patients can go, but covers higher percent of bill for going to in network providers, providers accept discounted fees, patients pay more for choice
what are POS common characteristics?
have a provider network that receives captivated payments or other payment methodology that puts providers at risk, requires patients have a gatekeeper to control access, patients can go out of network but pay more as providers paid fee for service
what are the payment methods?
capitation and global payment
what is capitation?
a fixed fee per member per month (PMPM)
what is global payment?
one payment for all services provided to a defined population
what are episodic payments?
all episodes of care are paid the same regardless of complexity or costs and so this removes the incentive to increase volumes or provide expensive services
what are some examples of financial incentive control costs?
so the purpose is to control expenses, examples include number of referrals to specialists, use of diagnostic tests, number of ER visits, number of patients seen per day, utilization of pharmaceuticals
