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Issues in Healthcare > Lecture 7/Chapter 6 > Flashcards

Lecture 7/Chapter 6 Flashcards

1
Q

Health Services Financing: Learning Objectives

A
  • Role of health care financing and its impact
  • concept of insurance and general terminology
  • differentiate group insurance, self-insurance, individual health insurance, managed care, high-deductible, and medigap plans
  • trends in employer-based health insurance
  • feature of public insurance programs
  • various methods of reimbursement and trends
  • national health care and personal health care expenditures and trends
  • effects of ACA on financing and insurance
  • current directions and issues in health care financing
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2
Q

complexity of financing in the US

A
  • public and private financing play roles
  • insurance overlap is common
  • insurance financing shared between employer and employee
  • employers slowly paid less and less as insurance become more expensive
  • ACA attempted to facilitate insurance purchase
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3
Q

role and scope of health services financing

A
  • financing pays health insurance premiums
  • charity plays a noteworthy role for uninsured
  • insurance increases demand for health care
  • insurance lowers out of pocket costs which leads to patients consuming more and utilization -> moral hazard
  • financing influences on supply-side factors- physicians and hospitals are the suppliers
  • new models of organization may form
  • demand-side factors- patients but also physicians depending on what they order
  • financing influences the supply and distribution of health professionals
  • resource based relative value scale (RBRVS)- determining physicians fees
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4
Q

financing and cost control

A
  • insurance extension to uninsured increases health care expenditures (E)
  • E= total health care expenditures
  • Q= number of health care services provided (utilization)
  • P=
  • insurance with payments (price = P) influences supply
  • insurance and supply of services determine access and service utilization (quantity of services consumed = Q)
  • total expenses increases dramatically as people with insurance increases
  • regulating cost per service (Q) it will reduce total health expenditures (E) -> managed care
  • E = P x Q
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5
Q

insurance function

A
  • 4 fundamental principles:
  • risk is unpredictable for the insured
  • risk can be predicted with a reasonable accuracy in a large group
  • insurance mechanism transfers risk from the individual to the group through pooling of resources
  • members of insured group share losses -> losses are shared by all members
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6
Q

basic health insurance terminology

A
  • premiums- what the insurance company charges to provide health insurance benefits for an individual (the total)
  • risk rating- experience and community ratings
  • cost sharing- deductible, copayment, coinsurance
  • covered services or benefits
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7
Q

private health insurance

A
  • private health insurance is also called “voluntary health insurance”
  • most private health insurance is employment based -> workers are not mandated to buy it
  • many businesses are self-insured
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8
Q

types of private insurance

A
  • group insurance- purchasing power in numbers
  • self-insurance
  • individual private health insurance
  • managed care organization (MCOs): health maintenance organizations (HMOs) and preferred provider organizations (PPOs)
  • high deductible health plans and saving options
  • short term stop gap coverage- consolidated omnibus budget reconciliation act (COBRA)
  • medigap- does not cover extended long term care, vision, dental, hearing aids, or private nursing
  • trends in private health insurance
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9
Q

trends in employment based health insurance

A
  • play-or-pay mandate
  • premium costs in employment based plans
  • trends in utilization costs: cost sharing
  • ACA limits out of pocket cost sharing -> deductibles and copayments/coinsurance
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10
Q

6 main provisions to private coverage and cost under the ACA

A
  • 6 main ACA provisions:
    1. insurers mandated to enroll young adults until age 26 under parents plans
    1. illegal to charge more refuse coverage for preexisting conditions
    1. all health plans had to include certain “essential health benefits” (physicals, annuals)
    1. fee on insurers for the privilege of selling plans through the exchanges
    1. medical loss ratio (MLR)- % that you had to provide data that showed you not making great profits (pertains to insurer)
    1. legal US residents required to have health insurance, or else pay a penalty tax
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11
Q

private coverage and cost under the ACA

A
  • deductibles at often-unaffordable levels

- some large insurers left ACA exchanges

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12
Q

public health insurance

A
  • public financing supports programs benefiting certain categories of people
  • medicare for elderly and disabled individuals
  • medicaid for the indigent
  • department of defense programs for active service members and their families
  • department of veterans affairs (VA) health care for military veterans
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13
Q

medicare

A

-title 18 of social security act benefits:
BENEFICIARIES
-1. those 65 years old or older
-2. disabled who are entitled to social security
SECURITY
-3. those with end-stage renal disease
-part A: hospital insurance
-part B- supplementary medical insurance
-part C- medicare advantage
-part D- prescription drug coverage
-medicare financing and spending for services
-medicare trust funds
-83% are age 65 and older
-federal program consistent across the nation
-4 part system

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14
Q

medicaid

A
  • title 19 of social security act
  • finances health care for the indigent as determined by each state (means tested)
  • jointly finances by federal and state government
  • almost entirely a taxpayer-financed program
  • means-tested program- eligibility depends on financial resources
  • rules for medicaid eligibility varies from state to state
  • dual-eligible beneficiaries
  • medicaid experiences under the ACA
  • issues with medicaid
  • medicaid enrollment and spending
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15
Q

children health insurance program (CHIP)***

A
  • title 21 of social security act
  • federal block grants to states
  • covers children up to age 19
  • no federal income threshold
  • states cover children in families with incomes up to 200% of the FPL (federal poverty level)
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16
Q

health care for the military

A
  • US department of defense
  • known as the military health system
  • for active duty and retirees, dependents, survivors, and former spouses
  • each branch operates its own medical facilities
  • TRICARE is the insurance arm
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17
Q

veterans health administration (VHA)

A
  • largest integrated US health system
  • cost control through global budgets
  • 23 geographically distributed veterans integrated service networks (VISNs)
  • civilian health and medical program of the department of veterans affairs (CHAMPVA)- covers dependent of disabled veterans
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18
Q

Indian health service (IHS)

A
  • comprehensive care to members of federally recognized tribes and their descendants
  • government provided
  • American Indian and Alaska native (AIAN)
  • facilities include:
  • hospital and health center
  • school centers
  • health stations and Alaska village clinics
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19
Q

3rd party payers

A

-insurance companies, managed care organizations, blue cross/blue shield, government

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20
Q

payment function

A
  • fee for service
  • bundled payment
  • resource-based relative value scale
  • value-based reimbursement
  • managed care approaches
  • cost-plus reimbursement
  • disbursement of funds
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21
Q

payment function has 2 facets

A
    1. determine methods and amounts of reimbursement in advance of the delivery
    1. actual payment after services rendered
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22
Q

prospective reimbursement

A
  • diagnosis-related groups
  • psychiatric DRG-based payment
  • LTC hospital payment system
  • outpatient prospective payment system
  • case-mix methods
  • home health resource groups
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23
Q

national health care expenditures

A
  • national health expenditures (NHE)
  • $3.2 trillion
  • average per-capita spending of $9,990 per American
  • NHE represented 17.8% of the US gross domestic product (GPD)
  • differences between national and personal health expenditures
  • government coverage is growing
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24
Q

current directions and issues

A
  • value and affordability
  • adverse selection
  • cost shifting- mechanisms to make up for revenue shortfalls
  • fraud and abuse- false claims act, social security act, and the anti-kickback statute
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25
Q

summary

A
  • financing determines who pays for health care services (insurers, insured, tax payers) and for whom and who produces which types of health care services
  • financing affects demand and supply sides of the health care equation
26
Q

the insurance function

A
  • insurance protects against risk
  • risk- the possibility of substantial financial loss form some event, where probability of occurrence is small
  • relies on a lot of people to pay on a regular basis
  • less comes out then comes in
27
Q

costumer of the hospital

A
  • the provider bc he refers the patients

- not completely based on supply demand bc you cant just buy a cat scan -> you need a referral

28
Q

resource based relative value scale (RBRVS)

A
  • determining physicians fees
  • insurance companies decide the price of physicians prices based on many factors
  • negotiation
29
Q

deductible

A
  • certain amount that the insured person has to pay out of pocket before the insurance company starts to pay
  • pay up front before insurance begins
  • higher the deductible lower the premium bc there is less risk
  • if you have an injury and you pay a high deductible you already covered a lot of the cost -> lower premium
  • decreases utilization of health care -> if you have a high deductible in order to have lower premiums then you are not gonna want to pay the high deductible to see the doctor for something that would cost cheaper than the deductible
  • if you are getting an expensive surgery than you will pay the deductible (bc the deductible will most likely goes towards all of it)
30
Q

premium

A
  • what the insurance company charges to provide health insurance benefits for an individual (the total)
  • you may have a 2,000$ premium and only pay 200 monthly bc the state covers some of it
31
Q

copay

A

Amount you pay to the doctors office every time you visit

  • used by insurance companies to control access
  • lower the premium the higher the copay
32
Q

coinsurance

A

-multiple insurance policies
-primary and secondary
-set proportion of medical costs
-set proportion of medical costs that the insured must pay out of pocket
Ex. 80/20 coinsurance may be required -> once the deductible has been met, the plan pays 80% of the costs; the insured pays the remaining 20%.

33
Q

why cost sharing

A
  • MORAL HAZARD
  • cost sharing reduces moral hazard
  • rand health insurance experiment
  • cost sharing had a material impact on lowering utilization, without any significant negative health consequences
34
Q

group insurance

A
  • getting a discount
  • power in numbers
  • more negotiation power with more people
  • self insured have worse coverage
  • exchanges for better group rates
  • limited success -> bc it wasnt profitable
35
Q

self-insurance

A
  • instead of Northwell purchasing insurance from united health care (ex.) they set up insurance for their own company
  • cuts down on administrative costs
  • this is for large companies
  • company forms its own insurance instead of buying insurance from someone else
36
Q

individual private health insurance

A
  • family health insurance

- self insurance

37
Q

managed care organization (MCOs)

A
  • goal is to purchase insurance at affordable prices
  • more people can be covered bc they are gonna control how many people are accessing at a given time by using referrals, copays
  • HMO- one facility for all your services
  • preferred provider organizations (PPO)- health care providers that agree to provide services to a pool of specific insured people with negotiated prices
38
Q

high deductible health plans and saving options

A
  • pay a high deductible but
  • gonna cost less per month (premiums)
  • but if you have a hospitalization it wont kill you financially
39
Q

consolidated omnibus budget reconciliation act (COBRA)

A
  • maintain coverage until new coverage kicks in
  • when there is gap in employment
  • at your own expense
  • you pay full price
40
Q

medigap

A
  • outside insurance that is supplemental to medicare
  • covers deductibles and copays
  • does not cover extended long term care, vision, dental, hearing aids, or private nursing
  • additional insurance
  • small amount per month and it covers copays and deductibles
41
Q

play or pay mandate

A
  • ACA

- you get insurance or you pay a fine

42
Q

part A

A
  • 90 days of inpatient hospital care per benefit period (a lifetime reserve of 60 additional days)
  • lifetime care of 190 days in a psychiatric hospital
  • up to 100 days of care in a medicare certified SNF
  • home health care through medicare certified agency
  • hospice cae
43
Q

part B***

A
  • supplemnetary medical insurance
  • paid by taxes and premiums
  • what is used to pay for doctors visits
  • outpaient services
44
Q

part C*****

A

managed care option for medicare

  • you can opt in or not
  • you agree to only go to certain physicians
  • 1997
  • limited results and appeal
  • current name adopted under MMA
  • voluntary enrollment in managed care for both parts A and B
  • otherwise the beenficiary reminas in the orginial medicare program
  • does not add any specific benefits, but managed care may provide some extras
  • additional premiums, but no need for medigap
45
Q

Part D**

A
  • prescription drug coverage
  • voluntary enrollment
  • subsidized premiums; IRMAA imposed by ACA
  • created under MMA 2003; implemented in 2006
  • enrollees can choose between:
  • stand alone plans for prescriptions only
  • part C - services through managed care
46
Q

medicare out of pocket costs**

A
  • no limits on out of pocket expenses in the original medicare program
  • a typical
47
Q

fee for service-

A
  • old model before managed care came about
  • doctor charges a certain fee and submit to insurance company and reimbursed
  • charges are set by provider
  • each service billed separately
  • later, insurers adopted UCR (usual customary and reasonable) charge
  • main drawback- provider induced demand -> more services physicians bill for more reimbursements
  • retrospective payment system- paid after service is provided* -> no incentive to limit utilization
48
Q

which of the following payment methods has the effect of maximizing utilization of health care services?

A
  • high deductible plan- does not encourage utilization - what are the chances i will go above the deductible?
  • co-payments- more services more copays
  • fee-for-service**
  • diagnosis-related group (DRGs)
49
Q

diagnosis related groups (DRGs)*****

A
  • way of billing based on diagnosis
  • payments associated with one diagnosis
  • specific reimbursement the hospital gets
50
Q

prospective reimbursement

A
  • insurance company gives a set amount of money to the provider to provide the services the patient needs
  • before the services
  • up front
  • criteria established to determine in advance the amount of reimbursement
  • removes incentives to be inefficient (present in cost-plus)
  • enables medicare to predict future health care spending
  • organization make a profit by keeping their operating costs below the fixed prospective rates
  • provider and insurers know the amount of money being dealt with
  • provider is incentivized to use less services (they keep the rest of the money not used) while maintaining quality and patient care
  • controls utilization
51
Q

bundle payments

A
  • umber of related services in one price
  • reduces provider-induced demand because fees are inclusive of all bundled services
  • there is evidence that prospectively set bundled fees reduce health care spending without compromising quality of care
  • bundled payments for care improvement (BPCI) intitiviative
  • more health care services with less money
  • fixed price with many services provided
  • services related
  • ex. going to the eye doctor and getting exam and glasses at a fixed price
52
Q

preferred provider

A
  • discounted fee for service
  • prenegotiated discounted fee
  • under specific insurance
53
Q

capitation

A
  • prospective payment system that puts a cap on the amount the insurance company will pay
  • per member and month you will be payed a monthly fee (whether patient dosent come at all or comes everyday)
  • per member per month (PMPM) fee to cover all needed services
  • monthly fee - PMPM rate x number of enrollees
  • minimized provider induced demand and promotes prudence
  • salary combined with productivity based bonuses
  • penalized with overuse of money and resources -> managed
54
Q

prospective reimbursement**

A
  • diagnosis related groups
  • psychiatric BRG-based payment
  • LTC hospital payment system
  • outpatient prospective payment system
  • case-mix methods
  • home health resource groups
55
Q

bundled payments vs DRG

A

final

56
Q

fraud and abuse**

A
  • fraudulent billing may amount to 3% to 10% of total health care spending
  • the ACA calls for penalties for delaying or refusing the DHHS access to information in connection with adults and investigations
  • payments can be suspended when fraud is suspected
  • eligibility for medicaid and insurance subsidies are two areas ripe for fraud
57
Q

entitlement-based public financing system

A
  • medicare is sent out to everyone entitled
  • medicaid is need based
  • CHIP is need based
  • medigap- supplemental insurance, private
58
Q

adverse selection

A

when high risk patients enroll in large numbers compared to healthy -> causes premiums to raise for everyone
-current direction and issue

59
Q

cost shifting

A

used to make up for revenue shortfalls -> providers charge extra to payers that don’t exercise strict cost controls
-current issue and direction

60
Q

case-mix

A
  • mutually exclusive and differentiate patients according to the extent of resource use
  • prospective

Issues in Healthcare (15 decks)

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