Lecture 13: Health Care Reform

Question 1

Cost of health care in the United States

Answer 1

• Health care is 16.4% of the U.S. Gross Domestic Product

- Trends are unsustainable

Question 2

Access to health care in the United States

Answer 2

• Uninsured leads to more serious & more expensive care

- Uninsured care reduces preventive care

Question 3

Quality of health care in the United States

Answer 3

• Life expectancy in the U.S. is 81.2 (W) and 76.4 (M)

- Behind many other countries

Question 4

Attempts to Contain Costs

Answer 4

• Shift from fee-for-service to managed care
• Diagnosis-Related Groups (DRGs):
• Capitation for Medicare (Part A) Hospital Care
  Professional Standards Review Organizations
   Peer Review Organizations
   Certificate-of-Need Requirements for Capital Improvements

Question 5

Kerr-Mills Act (1960)

Answer 5

coverage for elderly indigent individuals

- Federal Effort to Increase Health Care Access

Question 6

Medicare (1965)

Answer 6

social health insurance; coverage for those > 65 years,
disabled, or with kidney disease
-Federal Effort to Increase Health Care Access

Question 7

Medicaid (1965)

Answer 7

Federal-state program for low-income individuals

- Federal Effort to Increase Health Care Access

Question 8

HIPAA (1996)-health insurance companies must:

Answer 8

not deny coverage due to preexisting medical conditions,
 as long as exclusionary period up to 1 year for that condition
 sell to small employer groups & individuals who lose coverage regardless of their
health history
 renew policies
 include patient privacy requirements in law

Question 9

Health Savings Accounts (HSA) — Medical Savings Accounts (MSA)

Answer 9

 Tax-free savings accounts used for out-of-pocket medical expenses for high-deductible health (HDHP) insurance plans
 Total out-of-pocket spending is capped
 Limit changes annually

Question 10

Flexible Spending Account (FSA) – employer based

Answer 10

 Use for any approved medical or child care expense

 “Use it or lose it” annually

Question 11

Patient Protection & Affordable Care Act (ACA) 2010

Answer 11

• Expand access to healthcare services
• Tax penalty for those who don’t enroll in a health insurance plan
• Creates State-based or Federal health insurance exchanges
• Medicaid expansion—under age 65 and income up to 135% of federal poverty level
• Dependent coverage for adult children to age 26

Question 12

Essential benefits (MUST) be covered! For ex:

Answer 12

1. Outpatient visits
2. Emergency Services
3. Hospitalization
4. Maternity care
5. Mental health and SUDs
6. Prescription drugs – not all but an essential formulary
7. Rehabilitation
8. Labs
9. Preventive / wellness / chronic disease management
10. Pediatrics

Question 13

Affordable Care Act

Answer 13

 Funding for increased access
 Employer & individual tax penalties
 Reduce amount allowed for contributions to FSAs
 Tax on nonprofit hospitals failing to comply with new requirements
 Annual fees for pharmaceutical manufacturing and health insurance
companies

Question 14

High premiums ->

Answer 14

Lower consumer cost-sharing

Question 15

Low premiums ->

Answer 15

Higher consumer cost-sharing

Question 16

Marketplace Plans: Metal Levels

Answer 16

Platinum
Gold
Silver
Bronze

Question 17

Platinum Level

Answer 17

Plan pays 90%

Consumer pays 10% for dedecutibles, Co-pays and Coinsurance

Question 18

Gold

Answer 18

Plan pays 80%

Consumer pays 20%

Question 19

Silver

Answer 19

Play pays 70%

Consumer pays 30%

Question 20

Bronze

Answer 20

Plan pays 60%

Consumer pays 40%

Question 21

Actuarial Value

Answer 21

% of total covered expenses (on avg)

Question 22

Coinsurance

Answer 22

The percentage of costs of a covered health care service you pay after your deductible has been meet

Question 23

Co-Payment

Answer 23

A fixed amount, you pay for a covered health care service after you’ve paid your deductible
- It’s a fee you pay when you receive a healthcare service

Question 24

Cost-sharing

Answer 24

refers to the patients portion of costs for healthcare services covered by their health insurance plan
- Insurer and health insurer both pay a portion of your medical costs during the year

Question 25

Outcomes of ACA

Answer 25

By March 2015—16.4 million previously uninsured people -> access to health insurance

Question 26

Accountable Care Organizations (ACOs)

Answer 26

- Initiated by Medicare - An organized group of providers, including PCPs, who are accountable for the overall care of a patient population and follow processes to promote evidence-based, high quality, and cost efficient care

Question 27

ACO Models Include relationships between:

Answer 27

- Hospitals, providers and payers - Hospitals & Physicians in a group practice arrangement - Networks of individual practices - Hospitals empoying physician groups

Question 28

Shared savings program: for ACO

Answer 28

If quality & cost reductions are met ½ of the savings become a bonus to the ACO

Question 29

Advanced Payment Model: for ACO

Answer 29

 Upfront fixed payment  Upfront variable payment based on number of historically-assigned beneficiaries  Variable monthly payment based on number of historically assigned beneficiaries

Question 30

Eligibility for ACO

Answer 30

Must manage a min. of 5,000 Medicare beneficiaries at least 3 years

Question 31

ACO Flow of Funds

Answer 31

ACO -> Providers: Hospital, Primary Care and Specialty ACO Enrollees -> Payer (Insurance plans) -> ACO ( By premiums) ACO -> Providers ( By co-pay and deductibles)

Question 32

General reforms

Answer 32

Implementation of ACA-mandated changes  Establishing insurance exchange  Expanding access to coverage  Public outreach for plans already available

Question 33

Medicaid reforms

Answer 33

 Cost containment  Improving efficiency  Current ACA Waiver: - Delivery System Reform Incentive Payment (DSRIP) Program

Question 34

New York State: DSRIP | Reform Goals:

Answer 34

* Reduce “avoidable” hospitalizations by 25% * Create Performing Provider Systems (PPSs) * Value based payment structrure * Available data portal & analytics

Question 35

DSRIP

Answer 35

Delivery System Reform Incentive Payment Program - Made under Section 1115 - Incentive payments to hospitals and other providers that develop programs pr strategies to enhance access to health care, increase the quality and cost-effectiveness of care, and increase the health of patients and families served -

Question 36

Professional Standards Review Organizations

Answer 36

a national network of utilization review programs that had dual responsibility for medical cost containment and quality assurance