Assignment task:
Briefly respond separately to the 5 posts regarding the discussion question "the financing of healthcare is an extremely complicated mechanism. The combination of payors, fee schedules, private plans, and state and federal funding issues all make reimbursement for care difficult to monitor, predict and calculate. What are the three issues you feel will need to be addressed within the next 5 years to address the issues related to reimbursement? Support your response with experience and/or material."
1) The first issue I feel needs to be addressed in healthcare as far as reimbursement is the high copays and deductibles patients still pay even after paying for insurance. Especially those who have healthcare plans through employers and are still paying huge chunks out of pocket to cover routine visits and exams.
Second, is the issue of reimbursement and overpricing in healthcare. One facility may charge a premium while another may charge barely cost price. Yet the patient has no idea until they receive a bill in the mail of how little or much they owe. Especially the charges for medication. Many have come to learn that overall; many pharmacies overcharge for something necessary such as insulin or blood pressure medication. However, a new online platform came about to cut the costs of the greedy pharma companies.
Finally, waste plays a huge role in healthcare and needs to be taken seriously. One thing that I've noticed since covid is the number of masks being wasted. However, I do believe people are now trying to be mindful of reusing masks as well as wearing ones that are cloth based to be washed and reused.
2) Many issues related to healthcare reimbursement need to be addressed in the United States. The complexity of our healthcare insurance system, the overpricing of medical care, and profit-driven waste are the three issues I will focus on.
The number of different kinds of insurance organizations with multiple different payment models is not only confusing, but it is also inadequate for many Americans. "By mid-2022, 43 percent of adults ages 19 to 64 had inadequate insurance coverage, meaning they were uninsured at the time of the survey (9%), had coverage when surveyed but experienced a time without coverage in the past year (11%), or had continuous coverage over the past year but were underinsured (23%)" (Collins et al., 2022). The Affordable Care Act (ACA) helped tremendously in altering our uninsured rates to an all-time low, but this does not sound as impressive if so many people still cannot afford their medical care. Many citizens delay care, even while insured, due to high out-of-pocket costs. This doesn't help in our efforts to promote preventative care. The ACA did make strides by banning pre-existing condition policies and helping build the marketplace for enrollment outside of an employer, but it did not address the issue of how much we pay for medical care. Not being able to afford plan premiums was most often the case for uninsured individuals (Collins et al., 2022). The figure below demonstrates the increased cost burden for family insurance from 2005-2015. "Between 2005 and 2015, total premium costs grew by 61 percent and employees' contribution to health insurance premiums grew by 83 percent" (Young et al., 2018). It would be nice if we could have a less confusing payor system and more strict regulations on how high premiums and deductibles could be set.
This leads me to the insane amounts we are charging for medical care. Why is it that non-profit hospitals are paying their presidents millions of dollars? Oh, because they have to use all the extra money they get from overcharging every patient or it is considered profit. That is a different discussion. Steven Brill's piece on hospital charges is a good read. It gives a great example of a simple blood test. The chargemaster is a hospital's price list that assigns a dollar amount to every service. A patient was charged $199.50 for a troponin test. This was the chargemaster price. Some of us might think that this isn't so bad because expensive equipment is used and employees need to be paid. The reality is that "Medicare collects troves of data on what every type of treatment, test, and other service costs hospitals to deliver. Under the law, Medicare is supposed to reimburse hospitals for any given service, factoring in not only direct costs but also allocated expenses such as overhead, capital expenses, executive salaries, insurance, differences in regional costs of living, and even the education of medical students" (Brill, 2013). Medicare would have paid $13.94 for that test so why would the hospital charge thirteen times what it costs to administer the test? Healthcare is a booming business harming our economy and the national deficit.
Profit-driven waste is another issue that I think we all witness every day in healthcare. I know there are many circumstances where we have to throw away unused meds or materials for infection prevention and the safety of our patients, but I am not referring to this kind of waste. I think the main driving forces are defensive medicine and the old philosophy of fee-for-service payments. Many doctors order unnecessary tests and procedures in lieu of the one-in-a-million chance they'll miss something. Or, they may think the more I order the more the hospital makes, and our jobs are secured. I see unnecessary tests every day in CT and sometimes we joke and say "job security, right". "Studies by the Institute of Medicine (IOM) and U.S. Congressional Budget Office (CBO) indicate that 30-40 percent of total U.S. health spending is "wasted," providing services of no discernible value and inefficiently providing valuable services; this is another significant dimension of U.S. healthcare spending" (Young et al., 2018). Thirty to forty percent!!!! I don't think any of our ER doctors have ever heard of the Choosing Wisely Campaign. Unnecessary tests and procedures negatively affect our healthcare culture and only confuse our patients about what appropriate care really is.
3) Three issues I feel will need to be addressed within the next 5 years to address the issues related to reimbursement are how will hospitals stay in business, how will we be able to care for the aging population, and will ever move closer to a national healthcare system that ultimately will serve both people and hospitals.
In my area, hospitals are not in the black - we are all in the red. Hospitals have chosen to close pediatric ER's, end different programs, and close PCP offices. Inflation is up, reimbursement is down, cost of paying employees up, and in Maryland, we can't charge more. In any other business that is losing money, you charge a little more, cut costs and the lights stay on. In Maryland hospitals, there is no charging a little more for the operation. So, how does a hospital stay in business? Look for alternatives to hiring high wage temp employees. Decrease the work force safely where it's possible, and reach out to the HSCRC to see if they will change the rate they are paying, The bottom line is - if hospitals aren't in the black - how do you stay in business? My hospital is waiting to hear back from the HSCRC to see if we will make a bit more money based on inflation - it's been a tough year for us.
To care for our aging population - we need people to work in hospitals. As patient numbers increase - we will need to hire more staff. How? How will we be able to hire more staff to care for our population without an increase in revenue or a decrease in the amount we are spending in another area to employ high skilled personnel. At my hospital, they are decreasing MD paychecks 10% to help our fiscal bottom line. I have no doubt that some Physicians will leave - how will we care for our aging population if we have no staff?
We all need insurance, we all need hospitals. It's such a confusing and difficult world to navigate when you are feeling well, let alone when you are sick. There are so many "catches" to this tricky insurance/Medicare world. It would be wonderful if we could all go to a hospital when necessary, receive care and understand what we are responsible for paying. Too often it's a mix of professional and technical charges. Patients are overpaying since they don't understand the bills, of they pay one set of charges and not the other. It would be amazing for all of us to be under one umbrella so we are all receiving top notch care equally and simply.
4) The three issues that I feel will need to be addressed within the next five years would be related to Waste, Fraud and Abuse, The Transformation of Health Insurance of Managed Care, and more emphasis on quality measures of patient outcomes.
Waste, Fraud, and Abuse remains a major issue in control and management of government health insurance program expenditures. As mentioned in our chapter reading, 30-40% of total U.S. health spending is "wasted" providing services of no apparent value and inefficiently providing valuable services. Some major causes of waste are from failures of care delivery and care coordination, over treatment, and overpricing. Also, fraudulent billings to public and private healthcare programs were reported with about 3-10 percent of total health spending, which is roughly estimated to $75-$250 billion. This is draining substantial resources from the healthcare system. There would need to be constant internal monitoring and auditing, along with implementing compliance and practice standards. More training would need to be provided in ensuring accuracy of submitting bills or claims for services provided, and training in utilizing proper referral and treatment forms as to avoid unnecessary medical treatment (Sultz, Harry A. & Young, Kristina M. (2018)(Pgs. 207-208).
The Transformation of Health Insurance of Managed Care and Emphasis on Quality Measures would also need to be addressed as this effects costs and access to services. With major concerns of rising costs and quality issues, focusing on the service delivery can reduce financial risks. Fee-for-Service models and volume-based reimbursement incentives have been known but the switch to more value-based models would be beneficial, as it will encourage hospitals to keep patients as healthy as possible on a long-term basis to reduce healthcare costs. Given that Medicaid services provides health coverage to millions of low-income families, implementing a value-based model, which is Medicaid's focus, would improve how care is delivered and how it's paid for. With the traditional fee-for-service compensating based on volume of services, outcomes of healthcare is implicated. The fee-for-service also ties into "waste" in the health care system because it mainly promoted unnecessary utilization and fragmented care that often results in additional costs. Transforming Managed Care will allow for better reimbursement with health outcomes, quality, and utilization, while delivering standardized care across the entire managed care network. Though value-based reimbursement models that are typically part of Medicaid managed care plans are particularly risk-sharing, it also strives to achieve better health outcomes and lower utilization rates. Reimbursement is linked with quality of patient outcomes, so emphasizing on transforming care delivery models would be one focus to address to help drive down costs and improve healthcare quality (Sultz, Harry A. & Young, Kristina M. (2018)(Pgs. 210-215).
5) The three issues I feel that will need to be addressed within the 5 years to address related to reimbursement would be:
Insurance Policy: Insurance policy might change due to the changes, especially with the economy. Patient's insurance may be covered federally funded either by Medicare or Medicaid, or even private insurance. Because of this and certain policy changes, patients may have changed limitations or more limitations that would affect reimbursement.
Length of Treatment: The length of treatment that third-party payers are willing to reimburse is dependent on top of some factors that include how severe the disability, the type of coverage and plans, positive impact on rehab services and etc.
Medical Necessity: According to NMSU's research, CFR (Code of Federal Regulations, HMO (Health Maintenance Organization) must arrange a short term rehab and physical therapy, these restrictions imply that services are to result in significant improvement. The cases had extended coverage or that limiting service may be recommended.