Expert answer:Health Care Systems: Issues and Trends
Expert answer:You have studied changes in the health care environment in the past twenty years. What trends do you foresee in the next ten years? Keep in mind that even the “experts” can’t predict the future. Specifically, list five major trends or changes in health care. Use information that you have learned in this course to present logical arguments to support your ideas. Two or three paragraphs on each trend should be sufficient to express your ideas. Please cover a variety of areas in health care. and there are a files from the notes from the class read them will
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HSA 405/505
Size and Growth of U.S. Health Care Industry
Monetary Flow
–
Sources
Outlays
Health Insurance
–
Moral Hazard
Benefit Structure
Voluntary Health Insurance
–
Blue Cross and Blue Shield
Private companies
Health Maintenance Organizations
Social Health Insurance
–
Workers’ Compensation
Medicare – Part A, B, C and D
Welfare Medicine
–
Medicaid is a transfer payment not an entitlement
Medicaid
Limited to specific group of low-income individuals and families.
There is no “entitlement feature”.
Payments made directly to providers.
Methods for reimbursing varies widely among states
Reimbursement level is payment in full – nothing can be charged to the individual.
States administers within broad federal guidelines.
Prospective Payment System (PPS)
DRG – diagnosis-related group – a classification system that sorts patients into uniform,
clinically compatible groups that have been categorized on the basis of traditional
resource use by patients with similar diagnoses.
80% of hospitals are under this system – exempt are psychiatric facilities, rehabilitation
hospitals, children’s hospitals, long-term care and other special facilities.
DRG weight classifications
Physician Reimbursement
Fee for Service:
UCR
1. Usual in that doctor’s practice
2. Customary in that community
3. Reasonable in terms of the distribution of all physician charges
Medicare physician reimbursement
Resource-based relative-value (RBRV) scale
1. physician work
2. practice expenses
3. malpractice insurance costs
Prepayment or Capitation
The person serviced, rather than the medical act, is the unit of remuneration.
There is incentive to control cost.
Preferred Provider Organizations (PPO) – is an agreement between providers and
purchasers of health care services to provide service at a discount.
Salary
Payment based on time
Common in urban public hospitals
Administratively simple
Encourages cooperation among physicians
HSA 405/505 Discussion Notes
Insurance
Health Insurance Concept
1. Transferring risk from an individual to a group
2. Sharing losses on some equitable basis by all members of the group
Characteristics of Insurance
1. Loss is something out of the ordinary
2. Losses are intended to be fairly independent events
3. The loss should be financial unmanageable
Health Insurers
– Commercial insurance companies
– Mutual – owned by their policyholders (Prudential and Metropolitan)
– Stock – owned by stockholders (Aetna, United HealthCare)
– Blue Cross and Blue Shield
– Independent Plans – many HMOs and self-insured companies
– Government
Industry dominated by large organizations such as: Blue Cross and Blue Shield,
Prudential, Cigna and large HMOs.
Policy limitations
– pre-existing conditions
– exclusions for a specific period of time after enrollment
– Deductibles – money paid by patients before policy provides benefits.
– UCR – usual, customary, and reasonable allowances
Health Insurance Policies
– Group policy
– Individual Coverage
Options for funding for an employer
– Fully insured
– Partially insured
– Self-insured
Benefits:
Medical Plans,
Dental Plans
Vision Plans
Prescription Drug Plan
Long-tern Care Coverage
Retire Medical Coverage
Disability Insurance
HSA 405/505
The Smith Family and Their Health Care Decisions
Background
Amy Smith is 37 years old and married to Scott, age 41. They live in Henderson County,
Kentucky with their three children, Troy, age 16; Ben, age 13; and Ellen, age 4. Amy has
just accepted a job at the University of Evansville. She is trying to decide which health
plan to select for her family. At Amy’s previous place of employment she was enrolled
in a catastrophic type plan that covered only major problems and had a very high
deductible. Essentially, Amy would collect only if a member of her family had a major
medical problem. Although she could convert to a private policy, it was apparent without
any analysis that she needed to select one of the UE plans. Scott is self-employed, so the
family depends on Amy’s plan.
Like so many people today, Amy and Scott are confused about health care and insurance.
Amy knows that you have studied health services administration at the University of
Evansville, and she and Scott come to you for advice. They have a shoebox full of
receipts and insurance statements. Amy usually tracks the financial records for the
family and she tells you that she can’t keep up with all the paperwork, and isn’t sure if
the insurance is paying for what it should.
The Facts
From a health care standpoint, 2017 has been a rough year for the Smith family. While
driving to work on an icy morning last February, Scott’s car was hit by a snowplow.
Scott had multiple injuries, including a broken leg and facial lacerations. Here is some
information about Scott’s medical services and bills:
Hospital bill for 2 days in Henderson County, Kentucky (PPO Provider) = $7,800
Physician charges while in hospital = $1,525
Eight office visits to physicians = $610
Generic Prescription pain reliever, list price at pharmacy = $37
Antibiotic (Brand Name), list price at pharmacy = $139
Over the Counter Medical Supplies (bandages etc.) = $58
In September the Smiths took Ben to a pediatric surgeon in Nashville to have a small
growth removed from his neck. This was performed as an outpatient. Because Scott and
Amy weren’t sure of the seriousness of the growth, they wanted the best care possible,
and decided to travel to Tennessee. The surgeon charged $935, and the outpatient
surgery center and lab charged $750. The pathologist charged $275. One week after the
surgery, Ben returned for a follow-up office visit, which cost $85. All of these charges
are at non PPO facilities for all UE plans.
In May 2017 Amy went to Deaconess Clinic for a routine checkup and mammogram.
Amy notes that her longtime physician participates in the UE network. The office visit
was $95, lab was $90, and the mammogram was $145.
Ellen has an articulation problem and needs speech therapy. At age 4 she needs extensive
treatment. Ellen had seven sessions in 2017. Two different speech pathologists have
recommended that Ellen attend sessions twice weekly for the next year. These are $90
per session.
Other than the above, the family considers themselves healthy.
Questions to Consider:
1.
If the Smiths had been enrolled in one the two plans in 2017 how much would the
Smith’s have paid out of pocket, and how much would the insurance have paid?
Assume that they will have no other medical costs for 2017. Clearly list any
assumptions that you need to make.
2.
What factors would you tell the Smiths to consider in choosing a plan? What
questions would you ask her in helping them to decide what plan is best for them?
The Smiths tell you that they highly value your opinion and are willing the share
their financial and personal information if it would be useful.
HSA 405/505
Ambulatory Care
Hospital role has eroded
Increased delivery of services in less expensive and less intensive surroundings and
facilities
Vertical Integration of the health care system
Home/office/hospital care
Large office building have made outpatient care easier
Table 7.2 Physician contacts page 164
Solo practice
– Sub specialists getting referrals
– Perform many functions in office
– Avoids organizational dependence
Group practice
– Definitions on page 168
– History
– Northern pacific Railroad in 1883
– Mayo Clinic in 1887
– Kaiser Foundation Health Plan
– Growth due to specialization of medicine and technology
– Opposition to group practice by the AMA
Groups now have affiliations with larger organizations such as hospitals
Number of groups has increased, Table 7.8, page 170
Advantages and Disadvantages of Group Practice, Table 7.9, page 171
Group Practice Advantages
– Professional manager
– Shared capital expense
– Shared financial risk
– More peer interaction
– Lower initial investment
– Flexible work and vacation schedule
Group Practice Disadvantages
– less individual freedom
– fewer outside consultants
– possible reduced identity with patient and community
– sharing of all problems
– income limitations
– income distribution arguments
Ambulatory Surgery Centers
– procedures previously done in office
– procedures previously done in hospital
– freestanding emergency centers
– sports medicine
– women’s health
Emergency Medical Services
– triage
– misuse of services
Government Programs
– Neighborhood health centers, funding started in 1965
– Community Mental Health Centers
Ambulatory Care Issues
– information management systems have gained importance
– ambulatory care plays a key role in coordinating care
HSA 405/505 Discussion Notes
History of Hospitals
Third century B.C. the Romans brought Greek concepts of temple medicine to Rome.
In fourth century institutions were established for people who had no homes
Hospitals were in monasteries
Eleventh century – Crusades
Hospitals were in shape of cross
Alms Houses in Europe
Hospitals in early U.S.
– refused to admit incurables (except mental cases)
– refused smallpox cases
– for poor, but paying patients grew
– visitors paid to watch and taunt insane
– infections were common
Pennsylvania Hospital
-Philadelphia
-paying patients were accepted
Massachusetts General Hospital – 1811
Hospitals in the Western United States
– St. Louis, 1828, 1849 cholera epidemic killed 8% of the area population
Florence Nightingale in England published two works in 1858 and 1859
Scientific advances in mid 1800s – theory of germs, etc.
Hospital growth after World War II due to:
– development of antibiotics and other pharmaceuticals
– new instrumentation
– new knowledge
page 2
In late 1960s many states passed certificate-of-need (CON) legislation, which required
that a need for a new hospital must be shown.
1980s – State and federal laws passed to control hospital costs.
Community Hospitals
– provide short-term general care – less than 30 days
– declining in number, and those remaining have declining admissions, occupancy rate,
and length of stay.
– Typically not-for-profit, thus they pay no taxes
– Run by an elected board
Teaching hospital – hospitals that have an approved residency program.
Church community general hospitals – heavily influenced by the churches or church
groups that sponsor them.
State Government General Hospitals
– University medical school operated
– Hospitals in penal systems
– State hospitals in poor areas
County and City Community General Hospitals – typically in large cities (Cook
County)
For-profit or Investor-owned Hospitals – may be owned by an individual, a partnership
or corporation.
Children’s Hospitals
Non-community Hospitals
–
care for patients requiring hospital stays longer than 30 days
psychiatric hospitals (profit and not-for-profit state run)
chemical dependency hospitals
Tuberculosis Hospitals
Federal Government Hospitals
1. Department of Defense
2. Veterans Administration (VA)
3. Indian Health Services (45 hospitals on Indian reservations)
Regionalization – small hospitals affiliate with larger hospitals. Hospitals do not have to
duplicate services. Some share equipment and services.
Hospital and Health Statistics
1. AHA Guide – lists all registered hospitals
page 3
2. AHA Hospital Trends – provides statistical profile (beds, cost, employees and type)
3. National Center for Health Statistics – all kinds of health data (births, deaths,
diseases)
4. Center for Medicare and Medicaid Services – data on Medicare and other programs.
Hospital Organization – key points
– lines of authority are not precise
– physician is the driving force
– a physician represents medical staff on hospital board
– hospitals and physicians sometimes compete to offer services
Medical Staff Privileges – hospital bylaws define how a physician may secure admitting
privileges.
Categories of staff privileges
Active
Associate
Courtesy
Consulting
Honorary
Chief of Staff – physician usually elected by medical staff to represent staff’s interest on
hospital board. If employed by the hospital, the physician is often referred to as the
Medical Director.
Clinical and Supporting Departments
Emergency
Outpatient
Supporting Patient Care
– anesthesiology
– radiology
– pathology
Shared Services – laundry, purchasing, data processing
…
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