Assignment:
Health Care Spending- Economics: Financing of Health Care
1. RMF- the real outburst of insurance as a payer of medical services started in the early 1980's when, companies such as BlueCross Blue Shield began to offer managed care services at a reasonable cost back then. Much like now, the cost quickly when up and by the end of the 1980's, employers were thinking about it twice to offer employees health insurance coverage. Needless to say, the industry has come a long way to offer consumers a variety of different products to choose from. On the other hand, prices in health care are high. What has the health care industry done to decrease the cost of healthcare? Can it be accomplished? Thoughts? 150 to 200 words
2. There are many questions associated with paying for health care 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? 150 to 200 words
3.What incentives does a capitated physician have to keep his patients happy? What incentive does an FFS physician have? If Mr. Jones is a cranky old man who smokes and drinks so much that his liver and other organs are going downhill, which payment system provides more incentive to keep Mr. Jones satisfied? Which provides the most incentive to render extra care? Which provides the most incentive to make sure that the level of care is optimized? Which groups tend to win by a general move toward capitated managed care? Which groups tend to lose? 150- 200 word
4.What are the objectives of the current medical malpractice system in the United States? How well does it work in achieving these objectives? If uncertainty regarding the occurrence of losses can be dealt with through insurance markets, why can't uncertainty regarding the outcome or quality of medical care be similarly priced and transferred?
5.Is the mark-up (ratio of prices to direct per-unit costs) relatively constant across different types of hospitals? Are mark-ups the same for different services or departments within a hospital? What adjustments would a hospital have to make if it began to serve a larger number of indigent patients? Would most of the adjustments come on the revenue side or the expenditure side? Who benefits from cost shifting: the poor or the rich? Do any health care workers benefit from cost shifting? 150 to 200 word
6. What has been the effect of diagnosis-related groups (DRGs) on hospital admissions and the length of stay? What are some advantages and disadvantages of DRGs? Your response should be 200-300 words. Please ensure to substantiate your response with scholarly sources or a personal account of your own experience in the work place.
7. One focus of every hospital case management department or utilization management team is patient length of stay (LOS). Whether measured in hours for observation or days for inpatients, shorter is generally better. Hospitals get paid by Medicare and most Medicaid and third party payers based on a formula that includes a number of elements. The formula is specific to categories of diagnoses referred to as Diagnosis Related Groups (DRG's). The payment for the DRG's are predetermined. The amount doesn't change regardless of the cost of care. The only way for hospitals to make a profit is to provide care for the patient in a manner that is medically appropriate and gets the patient well enough to get safely out of the hospital, but at the same time keeping cost below the amount of the DRG payment. If cost exceeds the payment, then the hospital will lose money on that case. In what forms will costs occur? How can hospitals keep cost below reimbursement? 150 words
https://www.casemanagementinnovations.com/length-of-stay-what-is-the-difference-between-average-and-geometric-mean/
8. Based on this answer, what are some advantages and disadvantages of DRGs? 150 words. In order to describe all types of patient care back in the 1970s diagnosis related groups were developed which are also known as DRG's. It is known to serve hospital needs for data management and reimbursement, but it also includes research. Diagnosis related groups help a hospital determine payment levels for reimbursement purposes from health care insurance that a patient is covered by such as Medicare. It simplifies things for a hospital in order to group patients in this particular manner in order to determine costs and evaluate patients stays and services provided to them. Apparently DRG's are considered hierarchical and are assigned on the basis of procedure codes, they are then divided into surgical and medical sections. The third level focuses on surgical patients which is based on the procedure performed and the initial diagnosis on which the patient was admitted to the hospital. The Centers for Medicare and Medicaid Services implemented DRG's in 1983, and it was adopted by many states, but there were many changes that took place between that time and now. It is also tool that would look at mortality rates, but it all comes down to costs and making sure the best care is given in hospitals or other facilities.
Beilby, J. (2010). The Evolution of DRG's. AHIMA. HIM Body of Knowledge. Retrieved from:www.library.ahima.org
9. What advantage would a physician have by accepting a capitation rate from a managed care plan? What would be the disadvantages?
Your response should be 200-300 words. Please ensure to substantiate your response with scholarly sources or a personal account of your own experience in the work place.
10. Based on this answer below, what advantage would a physician have by accepting a capitation rate from a managed care plan? What would be the disadvantages?
Under capitation there can a better cash flow system. The money will be collected at the beginning of the month and this can eliminate collection cost. Under the fixed rate per member and HMO will pay you a fee to provide services for patients and as the population of patients increases so does the fee for each patient and as the patient population decreases the fee for services decreases. The disadvantage would be that the physician assumes the risk of providing whatever the services are and thus the physician has direct control on how the money could be lost if services are not done wisely in the practice. Another type capitation would be similar to the first but breaks down the patient population some type of demographics such as age and sex and places fees based on this. Services would need to be determined by these methods and cost matched against what is reasonable for the physician to make money and continue practicing. A third type of capitation is paid by a percentage of insurance premiums by the HMO members to the physician. A big risk in this plan is that at any time if the insurance company ever decided to lower its premium rates to its subscribers then that would also lower the fees to the physician.
Reference: https://www.managedcaremag.com/archives/9607/9607.plunge.html
11. Based on this answer below, what advantage would a physician have by accepting a capitation rate from a managed care plan? What would be the disadvantages? 150 words
A capitation rate is a form of payment for health care services in which a physician is paid a contracted rate. It's a fixed amount per patient per unit of time paid in advance. The amount paid is determined by the ranges of services provided, number of patients, and period of time. Some base their funding off of the patient's sex, age, and withheld amounts. Physician who accept a capitation rate from clients are guaranteed to receive a set amount. When the primary care provider signs a capitation agreement, a list of specific services that must be provided to patient is included in the contract. The amount is determined in part by the number of services provided and will vary from health plan to plan. But sometimes a set amount may not cover all cost of services. There may come a time when it puts the provider at risk if the overall cost exceeds the capitation amount, especially if the patient is in need of a referral. Another downfall is that a risk pool is established as a percentage of the capitation payment. Money is withheld from the physician until the end of the fiscal year. Then if the health plan meets the financial amount set, the money is paid to the physician, but if it does poorly, the money is kept to pay the deficiency expense.
12. Research health care spending in the United States. Write a 500 - to 700 word paper in which you explain your team's position on health care spending in the United States. Discuss the following:
• The level of current health care expenditures. Is the level of spending appropriate?
• Indicate where spending should be added or cut. Discuss why?
Format your paper consistent with APA guidelines. Use peer-reviewed sources and or use material from the Internet that is not questionable. Cite and reference properly. Format your paper consistent with APA guidelines.