HCS/440 Read Me First

Read Me FirstHCS/440

Week Three

Introduction

Historically, health care was driven by two major forces:the physician and the patient. The physician provided services and the patient paid. The physician was responsible for determining the diagnosis and providing the treatment. Sometimes, the best treatment was beyond the patient’s means, not available in the geographic area, or not in the physician’s skill set. It would be up to the physician to decide reasonable alternatives. Usually, the patient trusted the doctor’s decisions and rarely questioned the choice.

In 1960, a revolutionary idea was introduced into the American marketplace. Employers bought an insurance policy that covered health care for their workers. This policy paid the doctor for the health care. The doctor no longer had direct conversations with the patient about payment.The doctor could order care beyond the patient’s ability to pay out of pocket and send patients for specialized care to another physician or town. The doctor made those decisions with Blue Cross, the first large-scale health insurance carrier, and with the patient. The era of third-party payment was launched, and health care would never be the same.

Healthcare reform may bring further changes in reimbursement. The healthcare reform billis projected to expand coverage by making more lower-income citizenseligible for Medicaid, and by offering subsidies to help moderate-income citizensbuy insurance. The new reform measures would forbid insurance companies from denying coverage of preexisting conditions, and would create insurance exchanges, which are new, government-regulated marketplaces where individuals and small businesses come together to buy coverage. According to the New York Times (2009), the 160 million Americans who get their coverage through their employers would stay with that insurance. The reform would ensure that nearly everyone would have health insurance.

There is also discussion on how the payment structure would be for those providing services. One concept is a bundled payment for all providers’ hospitals, physicians, and lower levels of care, such as home health, skilled facilities, and so forth. An example of how that might be managed is that the hospital is paid one lump payment and pays the physicians and others providing services. As healthcare reform measures take shape over the next few years, the reimbursement changes will follow.

This week in relationship to the course and the program

Last week, we looked at major insurance programs. We discussed the responsibilities these programs had in providing payment for health care services. This week, we focus on the patient’s responsibilities in paying for health care. Even the best insurance does not cover 100% of the costs.

As the cost of health care escalated, employer or government agencies found they could no longer pay for care. Because the average person did not pay for health care out of pocket, they often used the services without regard to cost or conservation. To decrease the burden of payment and instill a sense of responsibility in the end user, health care coverage has increasingly shifted some cost from the insurance company to the insured. Employers that provide coverage as part of the benefits call this skin in the game. The economic reality is that, if an employee must pay a portion of the bill each time a service is utilized, they will utilize more wisely. Thus, we see the terms co-payment, deductible, and coinsurance as part of benefit packages.

For many years, hospitals had no reason to be cost-conscious. Insurance, Medicare, or private philanthropic groups picked up the cost for care. As the population grew older, treatments to prolong life became more sophisticated, and equipment and staff was more costly, so these sources ran low on funds. Private and government insurance plans had to set limits on what they would pay. Private insurance negotiated per diem or discounted rates with hospitals,whereas federal insurance programs implemented diagnostic-related groups, which allowed set dollars for specific illnesses.

This shift of payment to the individual and the limitation of payment to hospitals have had a profound effect on the health care industry. No longer is the physician the sole determiner of health care services, but a host of third-party intermediaries determine what treatment to give, how it is given, how long it lasts, how much is paid, and how the final bill is divided. These decisions affect health care economics discussed in this course and are a key factor in health care law and ethics. These topics are explored in other courses in this program.

Some questions to ask as you hone your critical thinking

There are many questions associated with paying for healthcare services. Is managed care the answer to our problems? How much money can be saved in the system by such direct management? At what point does cutting costs increase costs in the future? If I must pay $20 for every prenatal visit, will I go for all my appointments? Is it better for my managed care company to provide those visits for free, so I have a healthy baby and increase the copayment for an emergency department (ED) visit to $100 instead? Will that high payment be helpful, in that it will prompt me to see my primary care doctor for services, or will I refrain from going to the ED with my chest pain because of the cost?

What about my doctor? What if he is on a salary? Will he give me the same degree of attention and service if it does not matter to him if I return? How about a doctor who gets paid a capitation rate from my managed care plan? Will he give me all the time and treatment I need, or will I use up my share of his rate?

These are critical questions, especially as we move toward health care reform. Current research can surmise, but has not yet determined, the answers to these questions. This layer of administration between patient and doctor is relatively new. It will take the next generation of health care professionals to find the balance between cost and care.

Summary

This week, you will look at some positive new features and potential detriments in health care. You will look at how bills get paid. To fully appreciate the complexity of payment, you must see that bill from the physician’s, the hospital’s, the insurance company’s, and the patient’s standpoint. As you read, understand that bills must be paid. Nurses, technicians, and food service workers expect their paychecks. The suppliers will stop delivering if no one pays the bill. The lights and heat will go out. As a society, we want to take health care out of the world of commerce and elevate it to another plane. Somehow, we think it is wrong to discuss health care and money in the same sentence. However, this is the reality we must face. Understanding everyone’s role in keeping the system viable is the goal of Week Three.

REFERENCE

Abelson, R. (2009, December 24) Health care changes wouldn’t have big effect for many.The New York Times.Retrievedat

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