321 exam 1

• Healthcare System


  A whole composed of several interdependent parts that have differentiated roles, are interconnected by 3 processes (input, throughput, output), to create one overall unified & designed purpose
• Health


  According to WHO, a state of complete physical, mental, & social wellbeing, and not merely the absence of disease and infirmity
• Care


  Efforts made to maintain or restore physical, mental, or emotional wellbeing, by trained and licensed professionals
• Subcategories of care


  • Primary
  • Secondary
  • Tertiary
• Crucially, a free market is defined by the absence of government control
• How healthcare differs from other industries in the US

  • Low degree of consumerism
  • Third parties usually separate buyer & seller
  • Government regulation
  • Power of professionals
  • Nonprofits dominate the provider landscape
  • Lack of price transparency
  • Lack of info technology data flows
  • Asymmetric information
  • Local markets: "all healthcare is local"
  • Totally different language

  
• Players in the healthcare system

  • Payers: Consumer or their agent, insurance plans, government, employers
  • Providers: Pharmacists, Doctors, Nurses
  • Producers: Pharma companies, IT, Medical device manufacturers
  • Consumer: The direct patient that is provided health care for
• Financing


  Process of providing funds for business activities, making purchases, or investing
• 4 Basic Modes of Paying for Healthcare

  • Out-of-pocket payment
  • Individual private insurance
  • Employment-based group private insurance
  • Government financing

  
• Out-of-Pocket Payment


  Payment is made directly from patient to provider

  
• Because the direct purchase of health services became increasingly difficult for consumers and was not meeting the needs of hospitals and physicians to be reliably paid, health insurance came into being.
• Issues with Out-of-Pocket Payment

  • Need Versus Luxury
  • Unpredictability of Need and Cost
  • Patients Need to Rely on Physician Recommendations

  
• Individual Private Insurance


  A third party, the insurance plan (health plan), is added, dividing payment into a financing component & a payment component

  
• The ACA added an additional coverage mandate for those not otherwise insured & federal subsidy to help individuals pay the insurance premium

  
• With private health insurance, a third party, the insurer, is added to the patient and health care provider, who are the two basic parties of the health care transaction.

  
• Most insurance plans require patients to pay the first portion of their health expenses each year before the insurance coverage kicks in; per year.
• Employment-Based Private Insurance


  Employers pay a portion of the premium that purchases health insurance for the employees

  
• In addition to the direct employer subsidy, indirect gov. Subsidies occur through the tax-free status of employer contributions for health insurance benefits

  
• Benefits to Employers


  • The federal government views employer premium payments as a tax-deductible business expense
  • A more healthy and therefore engaged and productive workforce
  • Ability to attract and retain employees
• Employment-based private health insurance grew rapidly in the 1950s, helping working people and their families to afford health care.

  
• People in low-income brackets were usually unemployed or employed in jobs without the fringe benefit of health insurance; they could not afford insurance premiums.
• The enactment in 1965 of Medicare (for older adults and for some people with disabilities) and Medicaid (for people in low-income brackets) public insurance payments for privately operated health services became a major feature of healthcare in the United States.
• Social insurance model


  Only individuals paying taxes into the public plan are eligible for benefits

  
• Other models


  An individual's eligibility for benefits may not be directly linked to payment of taxes into the plan

  
• Some public plans (ex. Medicare Advantage), pay a private insurance intermediary that in turn pays providers

  
• Summary of how the 4 modes of financing health care developed historically

  • Each mode developed as a solution to the inadequacy of the previous modes
  • Private insurance provided protection to patients against the unpredictable costs of medical care, as well as protection to providers of care against the unpredictable ability of patients to pay
  • The private insurance solution created three new, interrelated problems: opportunity for providers to increase fees, employment-based nature disadvantaged unemployed, competition gave rise to unaffordable premiums for many
  • To solve these problems, government financing was required, but government financing fueled an even greater inflation in health care costs
  • As each "solution" was introduced, health care financing improved for a time
  • The problems of each financing mode and the problems created by each successive solution have accumulated into a complex crisis characterized by inadequate access for some and high costs for everyone

  
• In most countries, most of the medical care is financed or delivered (or both) in the public sector.
• In the United States, most people both pay for and receive their care through private institutions.
• Financing of Healthcare in different countries

  • Germany: government-mandated, employment-based private insurance
  • Canada and the United Kingdom: government-financed systems
  • Japan: financing falls between the German method and the government model
• Delivery of Care in different countries

  • Germany, Japan, and Canada: predominantly private
  • United Kingdom: mixture of private and public delivery

  
• Universal Health Coverage (UHC)


  All people have access to the full range of quality health services they need, when and where they need them, without financial hardship
• UHC covers the full continuum of essential health services, from health promotion to prevention, treatment, rehabilitation and palliative care.

  
• Delivering UHC


  • Countries need to have strong, efficient and equitable health systems that are rooted in the communities they serve
  • Primary health care (PHC) is the most effective and cost-efficient way to get there
  • Every country has a different path to achieving UHC and to decide what to cover based on the needs of their populations and the resources at hand
  • Investing in PHC ensures that all those needs are identified, prioritized and addressed in an integrated way; that there is a robust and equipped health and care workforce; and that all sectors of society contribute to confronting the environmental and socio-economic factors that affect health and well-being, including preparing for, responding to and recovering from emergencies
• The Canadian federal government passed universal medical insurance in 1966.
• Canada's healthcare system


  • Tax-financed, public, single-payer health care system
  • In each Canadian province, the single payer is the provincial government, with funding of the provincial programs coming from both federal and provincial tax revenues
  • Regardless of income bracket, employment status, or age, every Canadian receives the same health insurance
  • Variable premiums based on income
  • No copay or deductible
  • Mix of payment of fee for services and capitated
  • Canada also regulates pharmaceutical prices and provincial plans maintain formularies of drugs approved for coverage
  • Hospitals provide a fixed budget, no patient itemized bills
• The difference in cost between the US & Canada are primarily accounted for by administrative costs, increased use of expensive high-tech services in the US, highest cost per patient day in hospitals, and physician fees & pharmaceutical prices, which are much higher in the US
• In 1911, Great Britain established a system of health insurance like that of Germany.
• In 1948, the NHS began.
• The great majority of NHS funding comes from taxes.
• As in Canada, the United Kingdom completely separates health insurance from employment, and no distinction exists between social insurance and public-assistance financing.