Lecture 11 Flashcards
Why does HC cost so much?
– Medical Industrial Complex: health care for profit (Relman 1980, 1991)
– Drives innovation, but focus is not on public health
– Drives waste and unnecessary efforts on non- critical problems
How do we control HC costs?
Diagnostic Related Groups [DRGs]:
federal government pays for hospital care of medicare beneficiaries
How do we control HC costs?
Rationing
- Our economy does this all the time: deny goods and services to people who can’t afford them
- Or during periods of time: direct rationing programs to protect resources even though some can afford them
How do we control HC costs?
Managed Care
• Incorporate wide range of regulations on patient behavior, structured relationships b/w patients and providers and payment mechanisms
Points of Comparison: 6 Ways Health Plans Differ
- Whether or not you’re required have a primary care physician.
- Whether or not you’re required have a referral to see a specialist or get other services.
- Whether or not you have to have health care services pre- authorized.
- Whether or not the health plan will pay for care you get outside of its provider network.
- How much cost-sharing you’re responsible to pay when you use your health insurance.
- Whether or not you have to file insurance claims and do paperwork.
Managed Care Differences
HMO
HMO Requires PCP: Yes Requires referrals: Yes Requires pre- authorization: Not usually required. If required, PCP does it. Pays for out-of- network care: No Cost-sharing: Low Do you have to file claim paperwork?: No
Managed Care Differences
POS
Requires PCP: Yes
Requires referrals: Yes
Requires pre- authorization: Not usually. If required, PCP likely does it. Out- of-network care may have different rules.
Pays for out-of- network care: Yes, but requires PCP referral.
Cost-sharing: Low in-network, high for out-of- network.
Do you have to file claim paperwork?: Only for out-of- network claims.
Managed Care Differences
PPO
Requires PCP: No
Requires referrals: No
Requires pre- authorization: Yes
Pays for out-of- network care: Yes
Cost-sharing: High, especially for out-of-network care.
Do you have to file claim paperwork?: Only for out-of- network claims.
HMOs
Comprehensive, prepaid, managed care networks
HMOs: The Three Major Issues
• Ownership: Diversified through corporations and private health insurance companies.
• Save Money for Patients and Employers?: Due to efficiency and competition HMOs cheaper for both (10%-15% less than traditional plans)
• HMOs offer high quality care? Sort of – HMOs reduce use of services
– HMOs folks report the highest satisfaction
PPOs
• Preferred provider organizations: are networks of physicians or hospitals that agree to give price discounts to groups who enroll in their program and use their services
Additional Plans
Point of Service [POS] plans
cross b/w HMO and PPO: managed care system where access to a network is controlled. As with PPO, person can go outside of system for care at considerable cost. 20% US employees in POS plans.
Additional Plans
WHAT ARE CONSUMER-DIRECTED HEALTH PLANS and HEALTH SAVING ACCOUNTS?
– Consumer-Directed Health Plans (CDHPs) consist of two components:
A High-Deductible Health Plan (HDHP) is a health insurance policy that requires you to pay a large amount of money – the “deductible – before coverage kicks in. The goal of the HDHP is to cover more expensive, emergency medical care. Monthly premiums are lower than those in traditional health plans. (HDHPs can also be purchased outside of CDHPs.)
– A medical savings account to cover routine medical costs. The savings accounts can be HSAs, HRAs or FSAs, but typically they are HSAs (Health Savings Accounts)
We also can control cost through Reform
Four ways
• Government Policies: Federal and State Level
• Market Driven Approaches: Let market forces
control costs
• Single Payer System: Government sponsored, single payer, health care system
• Incremental Reforms: Make changes on a case by case basis to protect those that have no care or control spiraling costs
Ambulatory Care
definition
Personal health care provided to an individual who is not an inpatient in a health care facility
