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
Emerging Ambulatory Care Sites: 6 Types
Urgent-Care (Walk-In Centers): provide service without an appointment: young and middle aged use such places to take care of acute problems
Ambulatory Surgical Centers: minor low-risk outpatient surgery: cost-effective, same quality, no mortality differences, convenient for patients
Community Health Centers: By 2000s 2,000 CHCs, provide care to usually special populations, inner city or rural clients with uninsured or publicly insured status
Free Health Clinics: started in 1960s (n=300-400). Today (2015), there are 1200 clinics that offer primary care, volunteer staff, serve people unable to afford care, attempt to treat with dignity
Retail Clinics: Pharmacies and other retailers offer a form of preventive care nation-wide. Very low cost procedures in retail environment
Telehealth and Mobile Applications are now providing direct care and collecting fees.
Hospitals in the US
Pennsylvania Hospital
First for the sick was Pennsylvania Hospital in 1751 by Thomas Bond and Ben Franklin
Hill-Burton Act of 1946
$4 billion to build hospitals
Organizational Elements
Dual Line of Authority
Departments report to hospital administrator
Departments report to medical director in their area • Both responsible to hospital’s governing body
Tensions b/w business and clinical authority
Organizational Elements
Division of Labor
– Number of hospital employees risen since 1985
– Specialization caused more occupations to be created
• New Technologies and Methods developed – MRIs and Cardiac Rehabilitation
Organizational Elements
Number of Hospital and Hospital Beds
– Hospitals Increased from 1945-1979
– Since 1980 the number has declined by 18%
– 5,686 hospitals in 2016 and 914K beds • 35.6 million admits
Hospital Ownership in the US: 5 Types
Voluntary (non-profit) hospitals: 53% of hospitals in US – Largest category of ownership (2,904 in 2016)
• 3/4 of these are community hospitals and 1/4 are sponsored by religious organizations
– Surplus is reinvested at the end of the year
• Proprietary (for-profit) hospitals: 1060 account 19% of hospitals in 2016
– Either private or public (stock) companies • Hope to turn a profit for investors
• Government (public) Hospitals: 1010 Account 18% of hospitals in 2016
– Most for veterans and their families
• State funded tend to be a part of mental health system
• Locally funded designed to serve general population
- Non federal long term care (81)
- Non federal psychiatric hospitals (406)
Key Issues in Hospitals
Non-Profits vs. For Profits
For-profits locate themselves in affluent suburbs and target middle and upper class (cream-skimming) or refuse and uninsured and send them to non-profits (patient dumping)
Key Issues in Hospitals
Mergers
3 largest for-profit companies control 33% of all for profit hospitals. Thus, there is a lack of competition to drive down costs.
Nursing Homes and Hospice Nursing homes (=15,600 today, 1.7M patients) – two types
– Intermediate care – help with some of the hygiene care
– In addition, there is also Assisted Living – Help with chores, but has independent living arrangements
Nursing Homes and Hospice
Hospice care
(=5500 in the United States today)
Reemergence of Home Health Care
Today 9,000 agencies $60 billion dollar business spent on formal home HC: tremendous growth potential
Health Care Reform Today
Extend coverage through an insurance mandate
– Goal: Almost everyone to have coverage by 2015
– Goal: Subsidies for those who cannot afford coverage
– Goal: Make standard preventive services, including contraception
– Goal: Adult dependents keep coverage until 26
– Goal: Set up dollars for state run exchanges to come into existence
Health Care Reform Today
Pre-Existing conditions
Address insurance abuses of denial of coverage due to Pre-Existing conditions
Health Care Reform Today
irms spend 85% of premiums on care
Make insurance more effective by making firms spend 85% of premiums on care
Health Care Reform Today
Reduce the Deficit
Reduce the deficit by controlling cost
Health Care Reform Today
Eliminate overpayments to Medicare Advantage
Eliminate overpayments to Medicare Advantage (private Medicare plans)
Health Care Reform Today
Gives..
Gives incentives for doctors to go into primary care
Forces that Shape HC Systems
Four things
Physical Environment
-Distances or Environmental pollution
Historical or Situational Events
-Health Care Reform 2010
Cultural Norms and Values
-What is the collective conscience around health care?
Structure of Society
-Modernization, economics, demographics, other social institutions, and level of bureaucracy and authority in society
Great Britain
Socialized medicine: Government owned and run: Dept. of Health and Social Security called the NHS
All people are linked to a General Practitioner
HC provided free of charge
CANADA
Single-Payer Universal System of HC
Medical Education resembles the US: Flexner
System success is very high: health indicators, satisfaction from Canadians
China
Marxist principles on the economy with a mix of state run capitalism
3 centrally administered health care regions controlled by local governments
95% covered with some form of insurance
70% of costs are covered by the government
RUSSIA
Federal insurance and care has been free since 1996
Private health insurance also for those who can afford it
