US Healthcare

• Health care system and sub-systems
  • Managed care (MCO) – A system of health care delivery that seeks to 1) achieve efficiency by integrating the basic functions of health care delivery, 2) employ mechanisms to control utilization of medical services, and 3) determine the price at which the services are purchased and how much the providers get paid.
    • Dominant health care delivery system in US
    • Primarily financed by government and employers
    • Generally pay providers based on either capitation or discounted fees
    • 3 types (HMO, PPO, and POS)
      • Health maintenance organization (HMO) – Distinguished from other types by focus on preventive/screening services, capitation payment for providers, and use of in-network providers by enrollees
        • 3 Models (Staff, group, and network)
          • Staff model – Employs own salaried physicians, who profit-share based partially on productivity
          • Group model – Contracts with a multispecialty group practice, where providers are employed by the group practice; capitation-paid providers
          • Network model – Contracts separately with multiple practices
          • Independent practice association (IPA) model – Multiple practices coordinate under IPA, which then contracts with HMO
      • Preferred provider organization (PPO) – Distinguish from other types by offering out-of-network options for enrollees at the cost of a higher copay than in-network providers
        • Discounted fee arrangement with providers, rather than capitation
      • Point-of-service (POS) plan – Distinguish from other types by free choice of provider
        • Focus on utilization control rather than contracting rates
        • High out-of-pocket cost for enrollee
    • Utilization control methods in managed care
      • Gatekeeping – A PCP coordinates all health services needed by an enrollee
        • Emphasizes preventive care
        • Specialty care requires referral from PCP
      • Utilization review – Process of evaluation the appropriateness of services provided (3 types – prospective, concurrent, and retrospective)
  • Subsystem for vulnerable populations (e.g. poor, uninsured, minorities, immigrants living in underserved areas) – Safety net providers
    • Consist of providers who serve a disproportionate share of uninsured and low-income patients
      • Public hospital systems, community health centers, local health departments, and others
      • Primarily financed by Medicaid
        • Doesn’t allow for much cost-shifting to service vulnerable enrollees not meeting Medicaid criteria
• Four basic functional components of the U.S. health care delivery system:
  • Insurance – A mechanism for protection against risk, the possibility of a substantial financial loss from some event
  • Delivery – The utilization of health care resources
• Major characteristics of U.S. health care delivery
  • No central governing agency
  • Multiple players
  • Technology-driven with focus on acute care
  • High cost, unequal access, average (overall) outcomes
  • Operates under imperfect market conditions, but still generally based upon market rather than social justice
• The major players in the U.S. health services system
  • Physicians, administrators of health service institutions, insurance companies, large employers, and the government
• Some key terms
  • System – A set of interrelated and interdependent components designed to achieve some common goals
  • Capitation – Payment to a provider based upon number of patients under their care, rather than number and type of services rendered
  • Free market – Several conditions (and whether they are met or not in US health care)
    • Multiple buyers and sellers act independently with choice of product based on price and quality of product
      • Prices generally negotiated between provider and third party (insurer), not the patient
    • Price negotiation between seller and buyer
    • Unrestrained competition between sellers
      • Not restricted by government, but due to formation of quasi-monopolistic integrated delivery systems and MCOs
    • Buyer able to acquire information about availability of various services and price and quality of products
      • Reduced by need of patient for provider to act as advocate to reduce information gap, but facilitated somewhat by internet
      • Reduced by presence of hidden costs and item-based pricing, but facilitated by package pricing and capitated fees
    • Buyers directly bare cost of products
      • Payment generally by or subsidized by insurer (third party)
        • Moral hazard – Enrollees utilize more health services than they would if they had to bear cost of services
    • Buyers make decisions about purchase of products
      • Health care utilization decisions determined by need rather than price-based demand
  • Global budget – An overall spending limit or target
    • Defines the volume of services that will be delivered and its total price
  • Universal access (or universal coverage) – A health care system providing coverage for services for all individuals
  • National health insurance (NHI) – (Canada); Core of care delivered by private providers, with financing coordinated by the government
  • National health system (NHS) – (Britain); Government management of infrastructure for delivery of medical care, including ownership of medical institutions and employment of providers, with financing coordinated by the government
  • Single-payer system – A health care system financed by a single insurance pool, not necessarily but essentially always government-run
  • Socialized health insurance (SHI) system – (Germany); Care delivered by private providers, who are reimbursed by sickness funds, private, government-regulated insurers
    • Mandated enrollment into sickness funds for most citizens

• Determinants of health
  • Environment – Encompasses physical, socioeconomic, sociopolitical, and sociocultural dimensions
  • Behavior and lifestyle – Individual behaviors, such as diet, exercise, sex-behavior, smoking, etc.
  • Heredity – Genetic predispositions to certain diseases
  • Medical care – Access to preventive and curative health care services
• Health determinants and strategies to improve health within Healthy People 2020
  • Social determinants of health
    • Includes demographics, personal behaviors, and community-level inequalities and their defining influence on health
  • Medical care determinants of health
    • Includes a broad spectrum of medical care services and interventions to improve health through preventive and primary care
  • Social and medical points of intervention
    • Reduction in health disparities through 4 types of interventions
      • Policy interventions – e.g. prevention strategies to alter dynamics linking social factors to poor health
      • Community-based interventions – e.g. presence of local health and social welfare resources reflecting priorities of a local population and managed by that population
      • Health care interventions – seeks to improve quality and efficiency of services rendered and eliminate disparities between groups
        • E.g. EMR, continuing education for providers
      • Individual-level interventions – e.g. altering behavior that influences health, such as reducing smoking and encouraging excercise
• Two theories govern the production and distribution of health care services
  • Market justice – Rationing of medical care based on people’s ability and willingness to pay for services
    • Proposes that market forces in a free economy can best achieve a fair distribution of health care
    • Implies that giving people something they have not nearned would be morally and economically wrong
    • Assumptions
      • Health care is like any other economical good or service and is governed by supply and demand
      • Individuals are responsible for their own achievements – society is best served when people pursue their own best interests
      • People make rational choices in their decisions to purchase health care products and services
      • People, in consultation with physicians, know what is best for themselves
      • The health market works best with minimum interference from government – health system works best with market, rather than government, allocation of resources
  • Social justice – Rationing of medical care based on the principle that equitable distribution of health care is a societal responsibility
    • Best achieved by letting a central agency (usually the government) take over production and distribution of health care
    • Regards health care as social rather than economic good that should be collectively financed and available to all citizens regardless of ability to pay
    • Assumptions
      • Health care is different from most other goods and services – health-seeking behavior governed by need rather than cost
      • Responsibility for health care is shared – individuals are not held totally responsible for their condition
      • Society has an obligation to the collective good – individual illness is a burden to society, and the community good is superior to the individual good
      • The government, rather than the market, can better decide through rational planning how much health care to produce and distribute among all citizens
• Some key terms
  • Illness – Recognized by means of a person’s own perceptions and evaluation of how he or she feels
  • Disease – Abnormal condition whose presence is determined based on a medical professional’s evaluation rather than the patient’s, representing the highest state of professional knowledge (i.e. typically of a physician), and requiring therapeutic intervention
  • Quality of life – The essence of a person’s overall satisfaction with life during and after a person’s encounter with the health care delivery system
    • Term used two different ways
      • Indicator of how satisfied a person was with experiences while receiving health care
      • A person’s overall satisfaction with life and with self-perceptions of health, particularly after some medical intervention

• Major factors that have shaped U.S. health care
  • Cultural beliefs and values
    • Self-reliance
    • Welfare assistance only for most needy
  • Social factors
    • Demographic shifts
    • Immigration
    • Health status
    • Urbanization
  • Advances in science and technology
    • New treatments
    • Training of health professionals
    • Facilities and equipment
  • Economic forces
    • Health care costs
    • Health insurance
    • Family incomes
  • Political factors
    • President’s agenda
    • Domestic and foreign priorities
    • Power of interest groups
    • Laws and regulations
• Characteristics of medical services in preindustrial America (Colonial times to mid-late 1800’s)
  • Primitive medical procedures
  • Medical training lacking in science
  • Unstandardized medical education
  • Intense competition because any tradesman could practice medicine
  • Few hospitals, and those located only in big cities
  • Hospitals had poor sanitation and unskilled staff
  • Almshouses served destitute and disruptive elements of society and provided some basic nursing care
    • Not really a health care institution, as they were used to confine destitute and disruptive elements of society
    • Essentially served as a combined infirmary, old-age facility, mental asylum, homeless shelter, and orphanage
  • Pesthouses quarantined people with contagious disease
  • Dispensaries delivered outpatient charity care in urban areas
• Characteristics of medical services in postindustrial America (Mid-late 1800’s onward)
  • Urbanization
  • Scientific discoveries applicable to medicine
    • Advanced science-based treatments
    • Increased health care costs
    • Growing specialist/generalist imbalance
  • Medical education reform (HMS, hard sciences à JHU, graduate degree à Flexner Report, standardization)
  • Power and prestige of physicians
  • Organized medicine (and associated control over medical training, powerful interest groups, support of licensing laws, opposition to national health insurance proposals, and support of private entrepreneurship)
  • Hospitals became true medical care institutions
  • Growth of private health insurance
  • Creation of Medicare and Medicaid
• History of health insurance
  • Workers’ compensation
    • First broad-coverage health insurance in US
    • Originally designed to make cash payments to workers for wages lost due to job-related injury/disease
      • Eventually, compensation for medical expenses and death benefits added
    • Laws passed between 1910 and 1915 mandated purchase of insurance against industrial accidents
      • Served as trial for idea of government-sponsored health insurance
  • Rise of private health insurance
    • Private health insurance began as disability coverage that provided income during temporary disability from injury/sickness
    • As medical treatments became better (and more expensive), people couldn’t predict their future needs for medical care or its costs
      • Led to need for individuals to spread financial risk, and (unsuccessful) attempts of 16 state legislatures to mandate employer-sponsored health insurance between 1916-1918
    • First hospital plan and birth of Blue Cross
      • Economic conditions of Great Depression set stage
      • First hospital plan – single hospital plan for teachers, through hospital, 1929
      • Other hospitals mimicked, eventually turning to multi-hospital plans
      • American Hospital Association (AHA) united plans into Blue Cross network
        • Eventually ownership transferred to Blue Cross Commission (later, Blue Cross Association)
          • From 1940-1950, % population insured by hospital insurance went from 9 – 57%
          • Supported by AMA, as long as hospital-specific
          • Success led to more traditional insurance companies moving into health care
    • Blue Shield – 1939, California Medical Association, designed to pay physician fees
      • By taking control and developing first non-hospital physician plan, medical profession protected own financial interests
      • Merged with Blue Cross in 1974
    • Employer-based health insurance
      • Employee wages frozen during WWII to control inflation
        • Employees compensated for salary loss by employer-paid health insurance
        • Revenue Code amended by Congress to give tax-exemption status to employer-provided health coverage, and Supreme Court ruled bargaining of employee benefits between union and employer legitimate
          • Together, led to explosion of employment-based health insurance, with private health insurance becoming primary vehicle for delivery
    • Several failures of attempts at national health care in US due to
      • Lack of labor and political instability with which to get footing for movement
      • Decentralized US system gives federal government little direct control over social policy
      • Denouncement of German social insurance system during WWI ingrained synonymism between “national health insurance” and “socialized medicine”
      • AMA opposition
      • Middle-class values of capitalism, self-determination, and distrust of big government
      • Middle-class aversion to high taxes
• Medicaid and Medicare (1965)
  • Developed out of exception to opposition toward national health insurance – citizens ok with supporting underprivileged classes of citizens, namely the elderly, unemployed, and poor
  • Kerr-Mills Act/Medical Assistance Act (1960) – Federal grants to states to expand welfare programs to cover low-income elderly
    • Enacted despite strong opposition from AMA due to grassroots support from aging middle classs
    • Controversial to put elderly under welfare; seen as humiliating
    • Declared ineffective 3 years later
  • 3 part program enacted in 1965 under LBJ
    • Medicare (Title 18) – Provided publicly financed health insurance to all elderly regardless of income
      • Part A – Financed (through social security) hospital insurance and short-term nursing home coverage after hospital discharge
      • Part B – Covered physician bills through government-subsidized insurance in which elderly would pay part of premiums, with remainder coming from general taxes
        • Supplementary medical insurance (SMI), voluntary
      • Eventually expanded to cover disabled who receive social security and end-stage renal disease patients needing dialysis/transplant
      • Eventually 2 additional parts added
        • Part C (Medicare Advantage/Medicare+Choice, 1997) – Allowed private management of Medicare enrollees, with the private insurer receiving Medicare funds/beneficiary
        • Part D (Prescription Drug Coverage, 2003) – Covers prescription drug fees
          • Voluntary and available to anyone covered under Part A
          • Different type of plan for enrollees under Part B and Part C
    • Medicaid (Title 19) – Covered eligible poor based on Kerr-Mills/Medical Assistance Act
      • Means-tested – coverage based upon the income of the individual
      • Financed through federal matching funds to states based on state financial needs, indicated by state’s per capita income
      • Exact income criteria established by states, but no more stringent than federally set level
      • Includes SCHIP (1997)

• Major types of health services professionals
  • Physicians – State-licensed professionals who evaluate a patient’s condition, diagnose abnormalities, and coordinate treatment, in a variety of treatment settings
    • Generalists/Primary care vs Specialists
      • Primary care is first contact and portal to health system
      • PCP serve as gatekeepers to specialists (under MCO)
      • Primary care longitudinal (follows through course of treatment, from diagnosis onward)
      • Primary care focuses on whole person, rather than particular disease or organ system
    • Imbalance and maldistribution
      • Aggregate oversupply (COGME estimates 145-185 physicians / 100k population needed, but currently have 345 / 100k
      • Geographic maldistribution - physicians concentrated in metropolitan and suburban areas, with deficiencies in inner cities and rural areas
      • Specialty maldistribution – 34.5% generalist / 65.5% specialist in US, while only 25-50% specialist in other industrialized nations
        • Leads to supplier-induced demand for specialty services, which tend to be particularly costly
        • PCP’s also primary providers for underserved, exacerbating geographic maldistribution
  • Nurses – Major caregivers of sick and injured patients, addressing their physical, mental, and emotional needs
    • Largest group of health care professionals
  • Dentists – Diagnose and treat problems of teeth, gums, and tissues of mouth and work for prevention of dental decay and gum disease
  • Pharmacists – Dispense medication previously prescribed and provide consultation on proper selection and use of medications, as well as providing pharmaceutical care (informing physicians of patient compliance, achievement of therapeutic outcome, and potential drug interactions)
  • Physician assistants – part of the health care team who work in a dependent relationship with a physician to provide comprehensive care, by performing medical procedures under the supervision of a physician (either onsite or offsite)
  • Nurse practitioners – Promote wellness and good health through patient education, often serving as the first point of health care contact in outpatient services

• Some key terms:
  • Administrative information systems – Designed to assist in carrying out financial and administrative support activities such as payroll, patient accounting, staff scheduling, materials management, budgeting and cost control, and office automation
  • Clinical information systems – Involve the organized processing, storage, and retrieval of information to support patient care delivery, e.g. EMR
  • Decision support systems – Provide information and analytical tools to support managerial decision making by assisting in forecasting patient volume, projecting staffing requirements, evaluating financial performance, analyzing utilization, conducting clinical research, and improving quality and productivity
  • Electronic health records (EHR) – Replace traditional paper medical records, making it possible to access individual records online from many separate, interoperable automated systems within an electronic network
    • Includes 4 key components
      • Collection and storage of health information on individual patients over time
      • Immediate electronic access to person and population level information by authorized users
      • Provision of knowledge and decision support that enhance the quality, safety, and efficiency of patient care
      • Support of efficient processes for health care delivery
  • Telemedicine – Employs the use of telecommunication technology for medical diagnosis and patient care when the provider and client are separated by distance
  • E-health – All forms of electronic health care delivered over the internet, ranging from informational, educational, and commercial ‘products' to direct services offered by professionals, nonprofessionals, businesses, or consumers themselves
  • Safety – The condition of being protected from unnecessary harm due to use of technology
  • Cost-effectiveness – The overall utility of a treatment, weighing the total benefits to the total costs

• Financing – Any mechanism that gives the people the ability to pay for health care services
  • In US, 59% private insurance (mostly job based), 14% Medicare, 12% Medicaid, and 16% uninsured
• Risk is the possibility of a substantial financial loss from some event, and insurance is the mechanism for protection against that risk
  • 4 principles underlie concept of insurance
    • Risk is unpredictable for beneficiary
    • Risk is predictable for large groups
    • Insurance transfers risk from individual to group
    • Actual losses shared by all members of group
  • Cost sharing – Beneficiary assumes some portion of the cost for treatment in order to reduce extent of utilization
    • Premium – The amount charged for insurance coverage
    • Deductable – The amount the enrollee must pay before any benefits by the plan are payable
    • Copayment – The amount the insured must pay out of pocket for each health care utilization
  • Private insurance (Voluntary insurance) – 5 main types
    • Group insurance – Obtained through an entity such as an employer, union, or professional organization, with risk (and generally cost) distributed evenly among insured
    • Self-insurance – Large employers opt out of operating their insurance through a third party, instead budgeting their own money to pay medical claims of employees
    • Individual private insurance – Individual enrollment into an insurance plan, separate from any particular group
      • Premium price individually dictated by insurance company, leading to premium cost rising with risk
    • Managed care plans – In addition to acting like traditional insurance companies by spreading risk, also assume responsibility for delivery of care by contracting with a network of providers
    • High-deductible health plan (HDHP) – Plans with $1,000 deductible for individual or $2,000 deductible for family
      • Two types, both linking a personal savings account to HDHP insurance
        • Health reimbursement arrangement (HRA)
          • Funded by employer, employee prohibited from contributing
          • Funds used to reimburse insured for qualified medical expenses (including HDHP premiums)
          • Tax-free
          • May have independently from HDHP
        • Health savings account (HSA)
          • Employee deposits money, sometimes with employer contributions
          • Tax-deductible
          • Withdrawals to treat medical expenses tax-exempt
          • Must also have a HDHP
  • Public insurance – Includes Medicare and Medicaid (and SCHIP)
• Reimbursement – Payment made by third-party payers to the providers of services
  • Fee for service – Payment for a set of identifiable and individually distinct units of service
    • Initially set by providers, but eventually insurers limited reimbursement by use of “usual, customary, and reasonable” (UCR) amounts determined by the payers
      • Led to balance billing of patients by providers
  • Package pricing (Bundled charges) – Number of related services included in one price
  • Resource-based relative value scale (RBRVU) – Reimbursement based upon a predetermined “relative value” assigned to each physician service based upon the time, skill, and intensity required to provide that service
    • Developed through Medicare
  • Reimbursement under MCO’s
    • Generally discounted fee-for-service method for PPO’s and capitation/per member per month (PMPM) for HMO’s
  • Retrospective reimbursement – Rates set after evaluating costs, leading to total payments directly related to utilization
  • Prospective reimbursement – Uses pre-established criteria to determine in advance the amount of reimbursement
    • Medicare - Prospective payment system (PPS)
      • 4 types
        • Diagnosis-related groups (DRG) – Bundled prices set primarily according to principle diagnosis at time of admission to hospital, with modifiers for wage level in area, urban/rural treatment location, teaching status, and treatment of low income patients
          • Used for hospital inpatient services
        • Ambulatory payment classifications (APC) – Prices of all outpatient services based upon division into >300 procedural groups with modifiers for geographic wage variations
          • Used for hospital outpatient services
        • Resource utilization groups (RUG) – Similar to DRG, but total reimbursement based upon facility’s case mix, the overall acuity level in the facility, with modifiers for geographic wage variations and urban/rural location
          • Used for skilled nursing facilities (SNF)
        • Home health resource groups (HHRG) – Fixed rate paid for each patient in 60-day episode of care packages, with variations in payment based upon patient’s functional status and clinical severity level as rated by Outcomes and Assessment Information Set (OASIS)

• Types of hospitals (not all mutually exclusive)
  • Community hospital – Nonfederal hospitals (can be local/state government-run) with ALOS < 31 days, open to the general public
  • Public hospital – Federally or state/local government-owned hospitals, not necessarily open to the general public
  • Voluntary hospital (private nonprofit) – Private, nonprofit hospitals, typically owned by community associations, open to the community
    • Receive tax-free status as they claim to provide some defined public good and do not distribute profits to any individual
  • Proprietary hospital (private for-profit) – Investor-owned, operated for financial benefit of stockholders
  • General hospital – Provides diagnostic, treatment, and surgical services for patients with a variety of acute medical conditions
  • Specialty hospital – Admit only certain types of patients or those with specified illnesses or conditions
  • Rural hospital – Located in a county that is not part of a metropolitan statistical area (MSA), which includes at least one city with a pop > 50,000 or an urbanized area with > 50,000 inhabitants and MSA pop of > 100,000
  • Teaching hospital – Offers one or more graduate residency programs approved by the AMA
• Licensure – Issued by state governments, designating compliance with building codes, fire safety, climate control, space allocation, and sanitation
• Certification – Issued by DHHS through state departments of health, granting authority to participate in Medicare and Medicaid programs
• Accreditation – Issued by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), focuses on quality of care of hospitals and confers deemed status on hospitals through Medicare, allowing Medicare and Medicaid participation
• Hospital organization – Board of Trustees oversees CEO and Medical Director (Chief of Staff); CEO and Medical Director separate and have no authority over one another; CEO oversees administration; Medical Director oversees medical staff
• Some key terms
  • Hill-Burton Act (Hospital Survey and Construction Act, 1946) – Passed due to extreme shortage of hospitals, Congress passed to ensure 4.5 beds per 1,000 population through the issuance of federal grants to states
    • Single greatest factor in increasing nation’s bed supply
  • Average daily census – Average number of patients in a hospital on a given day

• History of health policy in the US
  • Bases
    • US Constitution, US Code, State Constitutions, and State laws
      • 14th Amendment
        • Defines citizenship
        • Prohibits deprivation of life, liberty, or property without certain steps to ensure fairness
        • Equal protection under law
      • No explicit obligation in US Constitution for federal involvement in healthcare (no duty to serve)
        • Constitution directed in negatives (what isn’t permissible, rather than what should be done)
        • Powers limited to regulating commerce, taxation, and spending
          • Essentially leads to ability to influence anything
      • States exercise Police Power
        • Enact/promulgate laws to protect, preserve, & promote general well being of its citizens and prosperity of public
• Key health policy actors
  • President, Congress, state governments, interest groups
• Government’s approach to policy
  • Paternalistic, Utilitarian, Libertarian, Equality, Equity
• Process of formulating, implementing and modifying policy
  • Formulation
    • Agenda setting
      • Problem
        • Spread
        • Severity
        • Specificity
        • Association
      • Solutions
        • Suitability
        • Practicality
        • Cost
      • Political circumstance – the will or force to move a problem/solution combination
        • Effected by attitudes, concerns, and opinions of public, ability to assert influence, and positions of key policy makers
    • Legislative development
      • Occurs in House and Senate
      • Origination of ideas (agenda setting)
      • Drafting of legislature (bill/resolution)
      • Marking up: committees
        • Committee members nominated by own party with chairs being senior ranking members of majority party
        • Promote action, make amendments, table, and discharge
      • Engrossing: in each chamber
      • Conferencing: both chambers
      • Enrolling
      • Enacting
    • Executive
      • Sign in to law
      • Veto (override with 2/3 Congress)
      • Pocket veto – sit until end of Congressional session (if within 10 days)
      • Unsigned enactment – sit for 10 days
      • Signing statements – “doesn’t apply to me”
      • Line item veto (states only)
  • Implementation
    • Utilization of resources in pursuing objectives embedded in law
    • Primarily in executive branch
    • Legislative branch – oversight responsibility
    • Judicial branch – enforcement
  • Modification
    • Occurs in developmental or implemental phases
• Interest groups – Groups providing collective action within the policy-making process; 2 perspectives
  • Pluralist – Interest groups serve as essential link between people and government and compete among each other and thus serve to balance each other (as one IG gains power, another steps up to counterbalance)
    • Power of money balanced by power of #
    • All IG’s play by same rules
  • Elitist – Real power held by only a few, who have a consensus on some basic values (e.g. private enterprise, individualism) and serve to protect their power base
• Influencing Policy –
  • Methods
    • Must have power (positional/legitimate, reward/coercive, expert, or referent)
    • Define problems/solutions
    • Draft/testify during development
    • Comment on rules/regulations
    • Serve on advisory committee/as expert
    • Interact with policymakers/implementers
    • Collect data regarding outcomes of policy
  • Window of opportunity – While influencing cant potentially occur at any time, to really have an effect, must occur early in the process
    • Once legislation is on floor, decision is essentially made
• How a bill becomes law (introduction, committee action, floor action, etc.) (picture too big to upload, sorry!)

• Cost of health care
  • Reasons for high cost
    • Third party payment
      • Moral hazard
    • Imperfect market
      • Utilization driven by need, quantity of health care produced higher than in competitive markets, prices permanently higher than true cost of production
    • Growth of technology
      • Research costs, and once developed, creates own demand
      • Raises patient expectation of medical science, so push for more treatment
    • Increase in elderly population
      • Elderly consume health care at 3.5x normal population
    • Medical model of health care delivery
      • Emphasizes intervention, deemphasizes prevention
    • Multipayer system and administrative costs
      • Management of complex system of financing, insurance, delivery, and payment functions
    • Defensive medicine
      • Due to unrestricted malpractice claims, leads to unnecessary tests/services to protect from lawsuit
    • Waste and abuse
      • Fraud, particularly with Medicare/Medicaid
    • Practice variations (small area variations, SAV)
      • Difference in practice patterns between homogenous patient populations
  • Cost containments
    • Price control – conversion from retrospective to prospective reimbursement
    • Peer review – process of medical review of utilization and quality carried out by/under supervision of physicians
      • Also, peer review organization (PRO)/quality improvement organization (QIO) specific to Medicare, privately contracting under CMS
    • Competitive approaches – strategies to get providers of health care services try to attract patients who have the ability to choose from several different providers
      • Demand-side incentives – cost-sharing mechanisms that place large cost burden on consumers
      • Supply-side regulation – antitrust laws, prohibiting stifling of competition
• Access to care
  • Dimensions of access to health services
    • Availability – get care when you need it, find a good doctor, knowledge of where to get care, get emergency care
    • Accessibility – convenient location to get care, ability to get to office
    • Accommodation – wait time (to schedule and waiting room) to see doctor, office hours, and ability to communicate with doctor
    • Affordability – health insurance, doctor’s prices, how soon to pay bill
    • Acceptability – appearances of office, neighborhoods of offices, patients seen
  • Factors affecting access to health services
    • Geographic, physical, temporal, sociocultural, and financial issues
• Measures of quality
  • Structure – The adequacy of the environment in which medical care takes place
    • Facility – type, size, and accreditation status of hospital
    • Staff qualifications – licensure and accreditation, training
    • Number of registered nurse hours worked per nursing home resident day
  • Process – What is being done and whether the system is working as it should
  • Outcomes – Effects or final results obtained from utilizing the structure and processes of health care delivery
• Process improvement strategies:
  • Clinical/medical practice guidelines – Constitute a plan for managing a clinical problem based on evidence to provide protocols to guide physicians’ clinical decisions, lower costs, and get better outcomes
  • Cost-effectiveness/cost-efficiency – Benefit received compared to cost incurred by use of service
  • Critical pathways – Display goals for patients and provide the sequence and timing of actions necessary to achieve these goals with optimal efficiency
• Risk management – Proactive efforts to prevent adverse events related to clinical care and facilities operations, focusing on avoiding medical malpractice
• Some key terms –
  • Efficacy – The health benefit to be derived from the use of technology/service or how effective a given technology/service is in diagnosing or treating a condition
  • Effectiveness – The ability of a treatment to reduce disease/illness

CodeBlu said:

Loveoforganic.... I got my first interview invite and will be reading over this again.

Thank you again!

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