PAS 3301 - Health Care System

World Health Organization (WHO) Definition

“Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity”

- World Health Organization (WHO)

• Health does not just mean “not being sick”

• It means being well in 3 main areas:

  • Physical → your body is healthy

  • Mental → your mind/emotions are healthy

  • Social → you have healthy relationships and interactions

• This is called a holistic approach because it looks at the whole person, not just diseases

Health Care

• Health care = services that help or improve a person’s health

  • It helps with physical, mental, and emotional well-being

  • Health care includes:

    • Prevention → stopping disease before it happens

    • Diagnosis → figuring out what is wrong

    • Treatment/cure → treating or getting rid of the problem

  • It can address diseases, illnesses, injuries, and physical or mental health problems

  • It is delivered by health professionals, including those in allied health fields

  • Health care can be divided into:

    • Primary care

    • Secondary care

    • Tertiary care

Primary Care

• Primary care = the first place a patient usually goes for health care

  • Provides basic, routine, everyday care

  • Usually provided by:

    • Primary care physicians (PCP)

    • Family doctors/general practitioners

  • Usually happens in a doctor’s office or clinic

  • Focuses on:

    • Maintaining overall health

    • Managing common health problems

Secondary Care

• Secondary care = specialized care for health problems that need more expertise than a PCP usually provides

  • Usually provided by specialists

  • Provides expert opinions and more advanced treatments/procedures that PCPs are not equipped to perform

  • Can include:

    • Hospitalization

    • Surgery

    • Speciality consultations

Tertiary Care

• Tertiary care = the most complex and highly specialized level of healthcare

  • Used for severe or uncommon conditions

  • Usually provided in specialized hospitals or medical centers

  • Uses advanced technology and highly trained specialists

  • Examples:

    • Trauma care

    • Severe burn treatment

    • Neonatal intensive care (NICU)

    • Tissues transplants

    • Open-heart surgery

Continuum of Health Care Services

• Health care services can be divided into 3 categories:

  • Curative = treat/fix the problem

    • Drugs

    • Treatment

    • Surgeries

  • Restorative = help you regain function

    • Physical therapy

    • Occupational therapy

    • Speech therapy

  • Preventive = prevent problems or catch them early

    • Prenatal care

    • Mannograms

    • Immunizations

Continuum of Health Care Services (Cont.)

• Health care is not only provided in hospitals or doctors’ offices anymore

• It can also be provided in:

  • Home health → health care provided in the patient’s own home

  • Subacute care units → care for patients who still need medical/rehabilitation care, but don’t need the full hospital-level care

    • Can be located in skilled nursing facilities

    • Or rehabilitation hospitals

  • Outpatient surgery centers → places where patients have surgery and usually go home the same day

Health Care Continuum in the US

• The U.S. healthcare system puts more emphasis on specialized care

• It puts less emphasis on:

  • Preventive care → preventing disease

  • Primary care → basic/everyday health care

  • Managing chronic conditions → long-term diseases like diabetes or high blood pressure

Development of the U.S. Health Care System

• The U.S. healthcare system grew rapidly after World War II

  • 1953 → U.S. Department of Health of Human & Human Services

    • Created to protect Americans’ health and provide essential human services

  • There was an increased focus on biomedical research

    • More research on medicine, diseases, and treatments

  • Private companies began offering health insurance to their employees

• Social Security Act of 1965

  • Created:

    • Medicare

    • Medicaid

U.S. Population

• This graph shows the U.S. population has grown a lot over time:

  • 1850: about 23 million

  • 1900: about 76 million

    • Population tripled in about 50 years

  • 1950: about 151 million

  • 2000: about 282 million

    • Population nearly doubled in 50 years

  • 2019: about 328 million

• As the U.S. population increased, the health care system had to serve many more people

National Health Expenditures

• The graph shows that U.S. health care spending has increased dramatically over time

  • 1950: $13 billion

  • 1960: $27 billion

  • 1970: $75 billion

  • 1980: $255 billion

  • 1990: $721 billion

  • 2000: $1.369 trillion

  • 2010: $2.593 trillion

  • 2019: $3.649 trillion

• The spending has roughly doubled every 10 years

Total Rx Expenditures

• This graph shows that spending on prescription medications increased a lot over time

  • Around 1990: about $50-60 billion

    • Spending continued to rise over the years

  • By 2015: spending was close to $800 billion

  • “Rx expenditures in all settings” = money spent on prescription drugs across all health care settings

Characteristic #1 of the U.S. Health Care System

• No single central agency controls the entire U.S. healthcare system

  • In other words, there isn’t one organization in charge of everything

• Instead, health care is financed and delivered through a mix of private and public systems

• Total health care spending is:

  • 53% private

  • 47% public

• Private = private insurance, employers, individuals, etc.

• Public = government programs, such as Medicare and Medicaid

Characteristic #2 of the U.S. Health Care System

• Partial access = not everyone has the same access to health care

  • Access → a person’s ability to get health care when they need it

  • A person’s access often depends on their health insurance coverage

    • Health insurance is the main way people can ensure they have access to health care services

    • Lack of insurance can create barriers, making it harder to get necessary health care

Characteristic #3 of the U.S. Health Care System

• A third-party payer = an organization, such as an insurance company, that helps pay medical bills for the patient

• There are 3 groups:

  • Patient ↔ Insurance company

    • Patient pays premiums → insurance company

    • Insurance company provides insurance coverage → patient

  • Patient ↔ Health care provider

    • Provider gives care/services → patient

    • Patient may pay OOP (out-of-pocket) fees → provider

  • Provider ↔ Insurance company

    • Provider sends a claim → insurance company asking to be paid

    • Insurance company sends reimbursement → provider

Characteristic #4 of the U.S. Health Care System

• Imperfect Market = health care doesn’t work like a normal market where people simply compare prices and choose what they want

  • Buyers = patients

  • Sellers = health care providers

Why is healthcare an imperfect market?

• Limited provider choices → your insurance plan may only let you see certain doctors/hospitals

• Limited information → patients may not fully understand or know enough about different health care services to compare them

• Insurance pays part of the cost → once you have insurance, you usually don’t pay the full price of your health care

  • This may cause people to use more health care services because they aren’t paying the full cost

  • This is called “moral hazard”

• Need matters more than price → people often seek health care because they need it, not because the price is good

• Providers can influence demand → providers may encourage patients to use more services than they otherwise would, especially where there is a financial incentive

  • This is called “provider-induced demand”