Chapter 13 Health Care Delivery in the United States

Introduction Health care delivery in U.S. is unlike other developed countries Is delivered by an array of providers in a variety of settings Is paid for in a variety of ways Is U.S. health care a “system?”

History of Health Care Delivery in the U.S. Self-care has been a category of health care throughout history and today From colonial times through late 1800s, anyone trained or untrained could practice medicine Past medical education not as rigorous as today Early medical education not grounded in science; experience-based only, prior to 1870

History of Health Care Delivery in the U.S. Most care was provided in patients’ homes Hospitals only in large cities and seaports Functioned more in a social welfare manner Not clean; unhygienic practice Almshouses Pesthouses

Health Care Delivery in the Late 1800s – Early 1900s Care moved from patient’s home to physician’s office and hospital Building and staffing better; designed for patient care; trained people; medical supplies Reduced travel time Science had bigger role in medical education Mortality decline due to improved public health measures

Early 1920s chronic diseases passed communicable as leading causes of death New procedures: X-ray, specialized surgery, chemotherapy, ECG Training: doctors and nurses more specialized 1929 – 3.9% GDP on health care Two party system – patients and physicians Physicians collected own bills, set and adjusted prices based on ability to pay Health Care Delivery in the Late 1800s – Early 1900s

Health Care Delivery – 1940s and 1950s WWII impact Due to wage restrictions employers used health insurance to lure workers Huge technical strides in 1940s and 1950s Hill-Burton Act Improved procedures, equipment, facilities meant rise in cost of health care Concept of health care as basic right vs. privilege

Health Care Delivery – 1960s Late 1950s had overall shortage of quality care and maldistribution of health care services Increased interest in health insurance Third-party payment system became standard method of payment Cost of health care rose Increased access, little expense for those with insurance; those without unable to afford care 1965 Medicare and Medicaid

Health Care Delivery – 1970s Health Maintenance Organization Act of 1973 National Health Planning and Resources Development Act of 1974 Health Systems Agencies in place to cut costs and prevent building unnecessary facilities and purchasing unnecessary equipment

Health Care Delivery – 1980s Deregulation of health care delivery Role of competition Competitive market approach of questionable value in lowering health care costs Proliferation of new medical technology Elaborate health insurance programs

Health Care Delivery – 1990s American Health Security Act of 1993 Managed care Achieve efficiency Control utilization Determine prices and payment Mid-1990s – percentage of GDP and dollars spent on health care continued to increase CHIP

Health Care Delivery in the 21 st Century Medicare Prescription Drug, Improvement, and Modernization Act of 2003 The World Health Report 2000 – Health Systems: Improving Performance U.S. ranked 37 out of 191 countries CHIP Reauthorization Act of 2009 Affordable Care Act of 2010

Health Care System: Structure Spectrum of health care delivery Various types of care Types of health care providers Health care facilities in which health care is delivered

Spectrum of Health Care Delivery Population-based public health practice Medical practice Long-term practice End-of-life practice

Public Health Practice Interventions aimed at disease prevention and health promotion, specific protection, and case findings Health education Empowerment and motivation Much takes place in governmental health agencies Also occurs in a variety of other settings

Medical Practice Primary medical care Clinical preventive services; first-contact treatment; ongoing care for common conditions Secondary medical care Specialize attention and ongoing management Tertiary medical care Highly specialized and technologically sophisticated medical and surgical care For unusual and complex conditions

Long-Term Practice Restorative care Provided after surgery or other treatment Rehab care, therapy, home care Inpatient and outpatient units, nursing homes, other settings Long-term care Help with chronic illnesses and disabilities Time-intensive skilled care to basic daily tasks Nursing homes and various settings

End-of-Life Practice Services provided shortly before death Hospice care Terminal diagnosis Variety of services and settings

Types of Health Care Providers 13.4 million workers in U.S. (10.3% of pop.) 40.5% in hospitals; 25.4% in outpatient settings; 16.6% in nursing/residential facilities Over 200 types of careers in industry Independent providers Limited care providers Nurses Nonphysician practitioners Allied health care professionals Public health professionals

Independent Providers Specialized education and legal authority to treat any health problem or disease Allopathic and osteopathic providers Nonallopathic providers

Allopathic and Osteopathic Providers Allopathic providers Produce effects different from those of diseases Doctors of Medicine (MDs) Osteopathic providers Relationship between body structure & function Doctors of Osteopathic Medicine (DOs) Similar education and training Most DOs work in primary care

Nonallopathic Providers Nontraditional means of health care Complementary and Alternative medicine (CAM) Used together with conventional medicine, therapy is considered “complementary”; in place of considered “alternative” Chiropractors, acupuncturists, naturopaths, etc. Natural products, mind-body medicine, manipulation, etc.

Limited (or Restricted) Care Providers Advanced training in a health care specialty Provide care for a specific part of the body Dentists, optometrists, podiatrists, audiologists, psychologists, etc.

Nurses Over 4 million working in nursing profession Training and Education of Nurses Licensed Practical Nurses (LPNs) Registered Nurses (RNs) Professional nurses (those with a BSN degree) Advanced Practice Nurses (those with master or doctoral degrees)

Nonphysician Practitioners Practice in many areas similar to physicians, but do not have MD or DO degrees Training beyond RN, less than physician Nurse practitioners, certified midwives, physician assistants

Allied Health Care Professionals Assist, facilitate, and complement work of physicians and other health care specialists Categories Laboratory technologist/technicians Therapeutic science practitioners Behavioral scientists Support services Education and training varies

Public Health Professionals Work in public health organizations Usually financed by tax dollars Available to everyone; primarily serve economically disadvantaged Public health physicians, environmental health workers, epidemiologists, health educators, public health nurses, research scientists, clinic workers, biostatisticians, etc.

Health Care Facilities and Their Accreditation Physical settings where health care is provided Inpatient care facilities Patient stays overnight Outpatient care facilities Patient receives care and does not stay overnight

Inpatient Care Facilities Hospitals, nursing homes, assisted-living Hospitals often categorized by ownership Private – profit making; specialty hospitals Public – supported and managed by government jurisdictions Voluntary – not-for-profits; ~½ of U.S. hospitals Teaching and nonteaching hospitals Full-service or limited-service hospitals

Outpatient Care Facilities One where a patient receives ambulatory care Variety of settings Health care practitioners’ offices, clinics, primary care centers, ambulatory surgery centers, urgent care centers, services offered in retail stores, dialysis centers, imaging centers Group practices versus solo practices Clinics

Two or more physicians practicing as a group Do not have inpatient beds For-profit and not-for-profit Some tax funded – created to meet needs of medically indigent

Other Types of Outpatient Facilities Pharmacies Urgent care centers Ambulatory surgery centers Non-hospital-based, specialty facilities

Rehabilitation Centers Work to restore function May be part of a clinic or hospital, or freestanding facilities May be inpatient or outpatient

Long-Term Care Options Nursing homes, group homes, transitional care, day care, home health care Home health care Growing due to restructuring of health care system, technological advances, and cost containment

Accreditation of Health Care Facilities Assists in determining quality of health care facilities Process by which an agency or organization evaluates and recognizes an institution as meeting certain predetermined standards Joint Commission Predominant accrediting organization

Health Care System: Function U.S. “system” unique compared to other countries Affordable Care Act 2010 Extends coverage Curbs health insurance abuses Initiates improvements in quality of care

Structure of the Health Care System U.S. structure – complex, expensive, many stakeholders, intertwined policies, politics Major issues: Cost containment, access, quality All equally important; expansion of one compromises other two

Cost Containment, Access, and Quality Triangle

Access to Health Care Insurance coverage and generosity of coverage are major determinants of access to health care 2011 – 46.3 million uninsured (15.1%); 58.7 million uninsured for part of the year (19.2%) Likelihood of being uninsured greater for those: young, less education, low income, nonwhite, male Greatest reason for lack of insurance: cost followed by lost job or change in employment

Access to Health Care Lack of access to primary care Factors that limit access are lack of health insurance, inadequate insurance, and poverty Major component of Affordable Care Act is increasing the number of Americans with health insurance Health insurance marketplaces – organizations established to create more organized and competitive markets for purchasing health insurance

Quality of Health Care Quality health care should be: Effective Safe Timely Patient centered Equitable Efficient Groups that measure quality: AHRQ, NCQA

The Cost of and Paying for Health Care In 2014, projected health expenditures: $3.1 trillion U.S. biggest spender on health care in the world by total spent Payments come from four sources: Direct or out-of-pocket payments Third-party payments from private insurance, governmental insurance programs, and other third-party payers

The Cost of and Paying for Health Care Reimbursement Fee-for-service Packaged pricing Resource-based relative value scale Capitation Prospective reimbursement

The Cost of and Paying for Health Care

Health Insurance A risk and cost-spreading process, like other insurance Cost is shared by all in the group Generally “equitable,” but increased risk may lead to increased costs

Health Insurance Policy Policy Premiums Deductible Co-insurance Copayment Fixed indemnity Exclusion Pre-existing condition

Types of Health Insurance Coverage

The Cost of Health Insurance Cost of insurance mirrors cost of care In U.S., burden falls primarily on the employer, then the employee Increased worker share of premium Raising deductibles Increasing prescription co-payments Increasing number of exclusions Cost of policy determined by risk of group and amount of coverage provided

Self-Funded Insurance Programs Programs created for/by employers rather than using commercial insurance carriers Many benefits to the employer Generally for larger companies, unless low- risk employees

Health Insurance Provided by the Government Government health insurance plans only available to select groups Medicare Medicaid Children’s Health Insurance Program

Medicare Covers more than 48 million people Federal health insurance program for those: 65+, permanent kidney failure, certain disabilities SSA handles enrollment Contributory program through FICA tax Four parts Hospital insurance (Part A), medical insurance (Part B), managed care plans (Part C), prescription drug plans (Part D)

Medicare Part A – mandatory; has deductible & co- insurance Part B – those in part A automatically enrolled unless decline; has deductible & co-insurance Part C – offered by private insurance companies; not available in all parts of U.S. Part D – optional; run by insurance companies; monthly premiums; large number of plan available; complex to navigate Uses DRGs

Medicaid Health insurance program for low-income; no age requirement 53+ million covered by Medicaid Eligibility determined by each state; very costly budget item for states Noncontributory program

CHIP Created in 1997 for 10 years Reauthorized in 2009 through 2013 Funding assisted by increase in federal excise tax rate on tobacco Targets low-income children ineligible for Medicaid State/federal program

Problems with Medicare and Medicaid Programs created to help provide health care to those who might have impossibilities of obtaining health insurance Recurrent problems: Some providers do not accept Medicare or Medicaid as forms of payment Medicare/Medicaid fraud

Supplemental Health Insurance Help cover out-of-pocket costs not covered through primary insurance Medigap Other supplemental insurance Long-term care insurance Preserve financial assets, prevent need for family or friends to provide care, enable people to stay independent longer, easier to go into facility of choice

Who pays for long-term care?

Managed Care Goal to control costs by controlling health care utilization Managed by MCOs Have agreements with providers to offer services at reduced cost Common features – provider panels, limited choice, gatekeeping, risk sharing, quality management and utilization review

Types of Managed Care Preferred provider organization (PPO) Exclusive provider organization (EPO) Health maintenance organization (HMO) Closed-panel HMO Open-panel HMO Mixed model HMO Staff model HMO Independent practice associations (IPAs)

Types of Managed Care Other items related to HMOs Point-of-service (POS) option Medicare Advantage Medicaid and Managed Care

Other Arrangements for Delivering Health Care National health insurance A system in which the federal government assumes responsibility for health care costs of entire population; primarily paid for with tax dollars U.S. only developed country without national health care plan Seven failed attempts at national health care in U.S. over past 70+ years

Health Care Reform in the United States Consumer-directed health plans (CDHPs) Consumer responsibility for health care decisions with tax-sheltered accounts Health savings accounts Flexible spending accounts Medical Savings Accounts Affordable Care Act

Discussion Questions How does payment for health care services affect the various types of health care providers now and in the future? What changes will need to occur for all U.S. citizens to have affordable health insurance? Is the Affordable Care Act going to effectively combat the numerous problems within the U.S. health care system?