Julie Gossett BSN, RN NURVN 413 Chapter 18 Health Care System: Financing, Issues, and Trends

Health Care System Rankings U.S. ranked #1 in honoring the dignity of individuals, choice of provider, timely care, and confidentiality U.S. ranked #37 in overall performance in relating outcomes to expenditures in health care U.S. has the highest health care spending (deductibles, copayments, coinsurance, and premiums for private insurance) of industrialized countries

United States # 54 out of 191 countries in fairness in financing health care U.S. spends $7026 per capita on health care However ½ of the spending was on 5% of the population. In European Union ever person is based on premise that every resident is guaranteed the same quality of healthcare

Canada Federally funded national health insurance Coverage is portable (not lost when a person moves) Universal (all residents of Canada are insured) Accessible (reasonably available) Free from extra charges for core services

Two Major Ways to Finance Health Care Fee-for-Service Traditional method of paying health care bills Physicians paid by the patient for each service Physician has an agreement with Insurance agency can be paid directly Some Insurance companies will not pay for tests to keep people healthy or identify illness in early stage

Two Major Ways to Finance Health Care Capitation Set monthly fee charged by the provider for each member of the insurance group for a specific set of services If health care services are more than the monthly fee, the provider absorbs the cost of the services At the end of year, if money is left over, the health care provider keeps the profit

Basic Health Insurance Terms Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 7 Premium Monthly fee a person must pay for health-care insurance coverage Deductible Yearly amount an insured person must spend out-of-pocket for health care services before a health insurance policy will begin to pay its share

Basic Health Insurance Terms Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 8 Copayment Amount an insured person must pay at the time of an office visit, when picking up a prescription, or before a hospital service Coinsurance Percentage of the total bill paid by the insured person Health Care Provider A licensed health care person whose health care services are covered by a health insurance plan

How Patients Pay for Health Care Services Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 9 Personal Payment (Private Pay) Payment directly by the patient Some patients may use this method of payment today. Cost of health care services discourages this method to be used. Private pay patients may be able to negotiate a discount with some health care agencies.

How Patients Pay for Health Care Services (cont’d) Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 10 Private Group Health Insurance Pools individual contributions for a common group goal- protection from financial disaster as a result of health care bills Offered by most employers in the United States Private Nongroup Health Insurance Offered by insurance companies to individuals who are not part of a group Premiums are based on a person’s health risk and age

How Patients Pay for Health Care Services Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 11 Medicare: A Program of Social Security Federally sponsored entitlement program and public health insurance plan Helps finance health care for all persons older than age 65 (and their spouses), Have at least a 10-year record in Medicare-covered employment Must be a citizen or permanent resident of the United States

How Patients Pay for Health Care Services Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 12 Components of Medicare – Part A: Hospital insurance for inpatient hospital care – Part B: Medical insurance for physician services, outpatient care, and diagnostic tests – Part C: Medicare Advantage Plan offered by private insurance companies – Part D: Medicare Drug Legislation: provides prescription drug coverage – Diagnosis-related groups (DRG) system Math formula calculates the fee government pays for hospitalization

How Patients Pay for Health Care Services (cont’d) Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 13 – Medicaid (Medical Assistance) For eligible families and individuals with low incomes and resources Each state establishes its own program services and eligibility requirements. Children’s Health Insurance Program (CHIP): covers uninsured children up to 200% of the poverty level.

Sources of Funding Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 14 Private Health Insurance: Individual contributions are pooled Government Health Programs Medicare is funded by the federal government. Medicaid is jointly financed by federal and state governments.

Cost of Health Care Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 15 Need for Cost Containment The need to hold costs to within fixed limits Source of Revenue (Income) for Government Health Care Income tax and payroll tax When Federal Spending Exceeds Revenue Two ways to cut costs in these programs Passing new laws to change eligibility Passing new authorization bills to alter funding Health Care and the National Economy The national economy plays a great deal into health care economics.

Cost of Health Insurance Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 16 Cost of Prescription Drugs The cost of commonly prescribed drugs in the United States has risen twice as much as the rate of inflation. After decades of soaring drug prices, employers and health plans expect employees to pay more for their prescriptions. Drugs are expensive in the United States because drug companies can charge full price for the drugs, which includes the cost of research and development of new drugs.

The Uninsured Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 17 Two Classes Of Employed Uninsured Low-wage employees Employed in low-wage jobs that are less likely to offer insurance benefits Middle class Workers are priced out of the health care insurance market by rapidly rising health insurance premiums.

Cost of Lack of Health Insurance Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 18 Alternatives to pay for health care include: Medicaid (if they qualify) Private pay (if they can afford it) Charity care (if they can find it) Face medical bankruptcy Lack of access to health care prevents individuals from receiving preventive care and seeking treatment when a health problem is developing. Many people rely on Emergency Departments for all levels of health care due to lack of insurance.

Uncompensated Care Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 19 Results in huge yearly deficits for health care organizations Includes services for which hospitals did not receive full payment Free care Free services that hospitals provide to patients who show that they cannot afford to pay for their care. Bad debt Services that hospitals provide for which they expect to receive payment, but never receive it. For example, insurance companies or patients who do not pay their bills

Repairing the Health Care System Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 20 Incremental Changes – Federal Level Health Insurance – The Health Insurance Portability and Accountability Act – State Level The Uninsured – States are attempting to reduce their rising health care costs and cover their uninsured. – Local Level Retail Health Care – Retail stores such as Wal-Mart, Target, and CVS have added clinics staffed by nurse practitioners or physician assistants to treat common health conditions.

Repairing the Health Care System Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 21 Comprehensive Changes Single-Payer System Payment for doctors, hospitals, and other providers for comprehensive health care for everyone regardless of past medical history comes from a single fund Health Savings Accounts Involves a medical savings account that allows persons to save for medical expenses on a tax-free basis Linked with high deductible health plans that have lower monthly premiums

Changes in Health Care Facilities Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 22 Minimum Nurse-to-Patient Ratios Mandating nurse-to-patient ratios is an attempt to improve quality and service. Voluntary Versus Mandatory Overtime Asking and requiring nursing staff to work beyond an 8-hour shift has been the method some facilities use to attempt to provide patient coverage during the nursing shortage.

Health Care Alliances, Networks, and Consolidation Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 23 Alliances Partnerships among hospitals, clinics, laboratories, health care systems, and physicians Networking By joining together, these alliances can coordinate the delivery of care and contain costs among providers of health care services. Consolidated systems of healthcare Include hospital systems found nationwide

Restructuring the Health Care System Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 24 Health care alliances, networks, and consolidation Alternatives in insurance coverage Managed care Health maintenance organizations (HMOs) Open access plans Preferred provider organizations Changes in health care facilities

Changes in Health Care Facilities Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 25 Unlicensed Assistive Personnel One survival strategy for acute care facilities continues to be the use of UAPs. Cross Training Allows staff to be assigned from units with low census to units that have staffing needs caused by absences or increased patient census.

Changes in Health Care Facilities Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 26 Minimum Nurse-to-Patient Ratios Mandating nurse-to-patient ratios is an attempt to improve quality and service. Voluntary Versus Mandatory Overtime Asking and requiring nursing staff to work beyond an 8-hour shift has been the method some facilities use to attempt to provide patient coverage during the nursing shortage.

Methods of Delivering Health Care Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 27 Patient-Focused Care Electronic Medical Records Involve recording all patient data in a computer Increases efficiency by reducing/eliminating the need for paper records, medical history forms, test request forms, drug prescriptions, written physician comments, etc. Critical Pathways This cost-effective method helps the patient reach discharge in the fastest time possible.

Quality Improvement Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 28 Stresses the need to search continually for new ways to improve the process of patient care, prevent errors, and identify and fix problems Formulation of nursing care plans by the RN, assisted by the LPN/LVN Providers of care must be able to demonstrate competency throughout their careers.

Dealing with Change Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 29 Ways to Look at Change Victims Look at change in a negative way Fear the worst will happen because of the proposed change and feel helpless in the situation Do not willingly participate in the change process, allowing change to control them

Dealing with Change Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 30 Ways to Look at Change Survivors Resist change but go along for the ride Claim the change will never work, and if their prediction comes true, they will be heard to say, “I told you so.”

Dealing with Change Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 31 Ways to Look at Change Navigators Feel in control of the situation Feel confident and excited about the possibility of being part of the solution to a problem Believe they have some control over change rather than being controlled by the change

Personal Plan for Change Elsevier items and derived items © 2009, 2005 Saunders, an imprint of Elsevier, Inc. All rights reserved. 32 LVNs must present themselves as valuable to the health care agency. Be self-directed, motivated, and a problem solver. Identify what needs to be done and do it. Respond flexibly to changes that are presented. Identify tasks or protocols that could be done more efficiently. Be a role model for vocational nurses.