4 Medical Ethics & Professional Practice (Week 4)

Which country spends the most money on healthcare?

United States, yet we don't have the highest life expectancy

other countries spend less money & live longer

What might be a reason why healthcare is so expensive in the United States?

medication costs

How does the number of doctors and nurses in the United States compare to other countries?

The US has fewer doctors and nurses per 100,000 population than other nations

What is the purpose of insurers?

to reduce financial uncertainty and make accidental loss manageable

How do insurers achieve their purpose?

substituting payment of a small, known fee (an insurance premium) to a professional insurer in exchange for the assumption of the risk of a large loss, and a promise to pay in the event of such a loss

What are the various healthcare delivery systems in the United States?

- Multispecialty Group Practice

- Community Health Centers

- Health Maintenance/Care Organizations (HMO)

- Independent Practice Associations (IPA)

- Integrated Medical Group Health Systems

What are multispecialty group practices?

Multiple disciplines under one location "under one roof"

- Physician/Provider or manager-owned

- Referrals stay within the group

- Fee-for-service (co-pays, insurance)

- No guarantee to see the same provider per visit

What do community health centers emphasize?

primary care (& preventative care)

What do community health centers address?

- Community and Public health needs

- Designed for low-income families

- Government-subsidized

Describe Health Maintenance/Care Organizations (HMO).

- Prepaid healthcare from one facility (ie PCP as a gatekeeper)

- Patients limited to HMO hospital within its network (ie Kaiser Permanente)

What is the limitation of HMO insurance?

Limited list of providers, employed by the HMO

With HMO insurance, where does the patient's premium get paid to?

directly to HMO (typically lower cost for the patient), not insurance companies

How are HMO providers paid?

- flat salary (long hours, no overtime)

- low financial risk to providers

What are the drawbacks of HMOs?

- High volume of patient visits

- Specialty provider restrictions

- More restrictions for coverage, certain number of visits, tests or treatments

What is the PCPs role in an HMO?

- Some plans require you to select a PCP

- PCP will determine your need for referral to a specialist

If you see someone out of the HMO network...

you pay everything

What are the advantages of Preferred Provider Organization (PPO) insurance?

- more flexibility to choose a provider or hospital

- has a network of providers

- fewer restrictions on seeing non-network providers

- you can see your provider or specialist without seeing your PCP first

- you can see a provider or go to a hospital outside the network and may be covered

What is the disadvantage of Preferred Provider Organization (PPO) insurance?

Premiums tend to be higher (and common to have a deductible)

HMO insurance and PPO insurance are both...

"managed care"

In summary, what are the PROs of an HMO?

- lower premiums

- low or no deductible

In summary, what are the CONs of an HMO?

- usually required to select a PCP

- PCP referral typically required for care from a specialist

- no non-emergency coverage outside of network

In summary, what are the PROs of a PPO?

- no need to select a PCP

- no referral needed to see a specialist

- usually some out-of-network coverage

In summary, what are the CONs of a PPO?

- higher premiums

- usually have a deductible

What is an Independent Practice Association (IPA)?

- Newer type of HMO

- Providers join as a group and remain in their own offices

Considering IPA, what is vertical integration?

consolidation of all levels of providers under one common ownership (health plan involves contractual links between network)

In an IPA, what do you do if tertiary care is not available?

refer out of the IPA with a cost associated

Benefits of Independent Practice Associations (IPA)

Provider focus on providing care

Drawbacks of Independent Practice Associations (IPA)

- may be difficult to manage

- changes in technology

- competition and may face antitrust issues

What are Integrated Medical Groups (PHO's), Physician Hospital Organizations?

"arms or extension" of the hospital system

Describe the pay structure in Integrated Medical Groups.

Hospital-owned practices, providers paid a salary

In Integrated Medical Groups, what do providers focus on?

practicing and more recoursed

What is a drawback to an Integrated Medical Group?

Providers' autonomy may be diminished

Describe the insurance and networking of Integrated Medication Groups.

- accepts all insurances

- large lists of practices & practitioners

- patients may choose providers in-network

- big trend in the industry as business is evolving and competition

What is the primary care model?

First contact and principal point of continuing care for patients within the healthcare system (ie PCP, general practitioner, family, PA, NP)

The primary care model has the widest scope of healthcare, including...

all ages, socioeconomic, geographic origins, acute or chronic, physical, mental or social health issues

What does the primary care model provide?

common health problems, routine checkups, screening, vaccination, preventive care, health education

Who does the primary care model coordinate with and refer to?

- coordinates with specialist

- referred to secondary or tertiary care

What does a patient have to pay in a primary care model?

Patient charged a membership fee (paid monthly, quarterly, or annual basis) for a defined number of services

What else does the primary care model provide?

- Concierge (retainer) medicine, core membership fee

- Enhanced access and services

- Can still bill insurance company for services

What does the secondary care model require?

more specialized clinical expertise care

What are examples of secondary care models?

- Emergency Department

- Surgery

- Inpatient hospital care

What does the tertiary care model involve?

management of rare or complex disorders

What are examples of tertiary care models?

- Subspecialties

- Research

- Academic

Describe how referrals work in the US Health Care System.

- Patient has a choice (manager)

- Patient chooses Secondary & Tertiary Care

- Secondary & Tertiary Care NOT centralized

- Financed by patient, health insurance, or government

What is influencing the economics of healthcare?

- Downgrading equipment/supplies

- Transferring cost to patient for medical supplies(splints, crutches, ace bandages, etc)

- Pharmaceuticals: generic versus brand name

- Outpatient procedures

- Shorter hospital stays

- Increase home care (VNA)

- Preventative Medicine

- PA's/NP utilization

Managed care provider reimbursement definition

- Fee-for-service

- Episodes of illness

- Per diem to hospitals

- Capitations

Describe the pay model for HMOs and IPAs

- Pay for performance (i.e., Capitation, RVU)

- Bonuses given to the gatekeepers (ie PCP)

- Gate-keepers: senior partners of the practice

- Junior partners get lower reward determined by the senior partner

What are the types of health insurance?

private, public, government

Outline the history of health insurance.

- 1939: Blue Shield first consumer driven policy under the California Hospital Association

- 1940: Blue Cross first consumer driven policy nationally under the American Hospital Association

- Post WWII Health policies replaced income raises, and used as bargaining tool for newly formed unions

- 1988: 142 million people enrolled in a Healthcare policy

True or False: The U.S. is the only developed country without universal health insurance coverage.

True

According to the 2018 US Census, how many people still don't have health insurance?

8.5% of Americans, or 27.5 million people

What is the Affordable Healthcare Act?

- passed in 2010 by the Obama Administration, significantly cut the number of uninsured

- but, millions of Americans still struggle to pay medical bills

What is Individual Private Insurance?

Third party, the insurer, is added to the patient and the health care provider.

What two transactions does Individual Private Insurance provide?

- Premium payment = from an individual to an insurance plan (health plan)

- Reimbursement payment = from insurance plan to the provider

Describe the cash flow in Individual Private Insurance

Individual -> premium (financing) -> Health Plan -> payment -> Provider

What is a copay?

a small, fixed amount outlined in the policy that you pay each time a covered service is provided

What is a deductible?

the amount you must pay out of pocket for covered expenses before the insurance company will cover the remaining costs

What is a premium?

the amount you must pay for your insurance plan

Describe the cash flow in Employment-Based Private Insurance

Employee/Employer -> premium (financing) -> Health Plan -> paymment -> Provider

What does a health insurance plan divide?

financing component and reimbursement component

What is community rated?

Premiums based on a community rating allocate risks evenly across a community

What is experience rated?

Premiums are adjusted based on the health history of those covered; typically lower for healthier groups and individuals

What are the categories of health policies for community rating?

- combination of experience rating

- averaging the health risks of employers based on the type of work

- creating one premium cost for all employees

- young and healthy premiums ultimately pay for the health risks of the older employees

What are the categories of health policies for experience rating?

- young and healthy (lower cost risk)

- older and healthy but with risk factors (medium cost risk)

- middle aged and older with long-term risks (higher cost risk)

What are medium cost risk jobs?

less active: office jobs, less activity, higher stress, management level positions

What are higher cost risk jobs?

jobs with physical risks: coal miners, construction

Describe the cash flow in government financing

Taxpayers pay taxes & individuals pay enrollment fees -> Public Plan -> payment -> Provider

What is government financing?

elderly and the poor could not afford medical care, so government policies were established (Medicare & Medicaid)

Who is eligible for Medicare?

- people aged 65 or older

- people who have paid into the Social Security system for 10 years

- people under age 65 with certain disabilities

What disabilities qualify someone under 65 for Medicare?

- End-Stage Renal Disease (ESRD)

- Amyotrophic lateral sclerosis (ALS)

What are the parts of Medicare?

- Medicare Part A (Hospital Insurance)

- Medicare Part B (Medical Insurance)

- Medicare Part D (Prescription Drug Coverage)

What does Medicare Part A cover?

- inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care)

- hospice care and some home health care.

Beneficiaries must meet certain conditions to get these benefits. Most people don't pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working.

What does Medicare Part B cover?

- Doctors' services and outpatient care

- some other medical services that Part A doesn't cover, such as some of the services of physical and occupational therapists, and some home health care.

Part B helps pay for these covered services and supplies when they are medically necessary. Most people pay a monthly premium for Part B.

What does Medicare Part D cover?

- prescription drug coverage; available to everyone with Medicare

- to get Medicare prescription drug coverage, people must join a plan approved by Medicare that offers Medicare drug coverage

- most people pay a monthly premium for Part D

In summary, who is eligible for Medicare?

65 years of age paid into SS for > 10 years or persons with total/permanent disabilities (Part A)

Summary of Medicare Part A

- hospital costs

- funded social security

Summary of Medicare Part B

- provider costs

- funded by Federal Taxes

Summary of Medicare Part C

- supplemental insurance

- funded by patient

- out-of-pocket

Summary of Medicare Part D

- prescription

- funded by Federal Taxes

How many people are covered by Medicaid?

89.4 million (as of June 2022)

What does Medicaid provide?

health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, elderly adults and people with disabilities

Who administers and who funds Medicaid?

- administered by states, according to federal requirements

- funded jointly by states and the federal government

What is Medicaid eligibility based on?

Modified Adjusted Gross Income (MAGI)

- taxable income and tax filing relationships

- individuals exempt from the MAGI-based income counting rules, including those whose eligibility is based on blindness, disability, or age (65 and older)

Where must someone with Medicaid be a resident?

in the state they receive assistance

When is Medicaid coverage effective?

either on the date of application or the first day of the month of application

What does " medically needy " mean?

Once an individual's incurred expenses exceed the difference between the individual's income and the state's medically needy income level (the "spenddown" amount), the person can be eligible for Medicaid

Summary of Medicare

- Medical bills are paid from trust funds which those covered have paid into.

- 65+ primarily, whatever their income; and serves younger disabled people and dialysis patients.

- Patients pay part of costs through deductibles for hospital and other costs.

- Small monthly premiums are required for non-hospital coverage.

- Closed provider networks, limiting your choice of which doctor or medical facility to use

Summary of Medicaid

- Low-income people of every age. Patients usually pay no part of costs for covered medical expenses.

- A small co-payment is sometimes required. Medicaid is a federal-state program. It varies from state to state.

- Decreased financial ability to opt for elective treatments, and they may not be able to pay for top brand drugs or other medical aids.

- Another financial concern is that medical practices cannot charge a fee when Medicaid patients miss appointments

Describe SCHIP (Husky) in CT

State Children's Health Insurance Plan

- part of Medicaid (Husky A, B, C, and D)

- federal mandate to insure all children

Who pays in SCHIP?

state pays 24-50% of the cost, Federal government subsidizes the rest

Who does SCHIP target?

- low income families with children

- children < 6 yo or pregnant mothers whose income is < 138% Federal Poverty Level (FPL)

- children 6-8 yo with parents income below FPL

Who is eligible for Husky A?

Connecticut children and their parents or a relative caregiver, and pregnant women, depending on family income

Who is eligible for Husky B (Children's Health Insurance Program)?

Uninsured children under age 19 in higher-income households, depending on specific income level (family cost-sharing applies)

What does Husky C include?

Long-Term Services & Supports, and Medicaid for Employees with Disabilities

Who is eligible for Husky C?

- Connecticut residents who are 65 years of age or older, and/or who are blind or disabled, may qualify for Medicaid coverage under HUSKY C.

- Income and asset eligibility vary, depending on which part of HUSKY C you may qualify for.

What is the annual income limit for Medicaid for Employees with Disabilities enrollees?

$75,000 and asset limits are much higher

What is Husky D also known as?

Medicaid for the Lowest-Income Populations

Who is eligible for Husko D?

Connecticut residents aged 19 up to 65th birthday without dependent children; who do not qualify for HUSKY A; who do not receive Medicare; and who are not pregnant

Describe health outcomes WITH insurance

- 90% of U.S. Residents have health insurance

- Facilitates access to care and is associated with lower death rates, better health outcomes, and improved productivity

- Affordable Care Act "Obamacare" effect

How many individuals still lack insurance coverage?

> 28 million