Healthcare Lecture Notes Flashcards

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Tough Issues in Healthcare (Chapter 12B, Part 1)

• Healthcare Awareness:

  • Many college students are not well-informed about healthcare issues due to lack of personal experience.

  • Encouragement to engage with the topic, ask questions, and seek understanding.

Learning Objectives

1. Privilege vs. Right:

   • Understand healthcare as a privilege for the affluent versus a basic right for all citizens.

2. Care Models:

   • Compare private care model (individual responsibility) vs. socialized care model (government-funded).

3. Affordability:

   • Explore how Americans manage healthcare costs.

4. Insurance Mechanism:

   • General operational principles of healthcare insurance and what is needed to maintain profitability.

5. Cost Variations:

   • Different costs associated with insurance policies (low vs. high cost).

6. Direct Payments:

   • Analyze scenarios where insured individuals still incur direct payments.

7. Financial Calculation:

   • Calculate monthly healthcare costs for an individual with a High-Deductible Plan (HDP).

     • Assumptions for Calculations:

     • Deductible: $1500, $3000, $500

     • Monthly medication cost: $150

     • Urgent care visit cost: $650 (specific months only).

8. HDP Risks:

   • Utilize prior calculations to discuss risks associated with HDP.

9. Milliman Medical Index:

   • Review annual medical costs breakdown for a middle-class family: roles of payment.

   • Examine trends in unpaid medical bills and its correlation with personal bankruptcies.

10. Insurance Trends:

    • Analyze trends in healthcare policy from 2008-2012 vs. 2001-2017.

11. Impact of Jobs on Healthcare Access:

    • How job types and insurance models affect affordability of healthcare.

Cost Expectations in Medical Care

• Emergency Room (ER) Cost Ranges:

  • $3000-$5000

  • $10,000-$20,000

  • $45,000-$70,000

  • $90,000-$115,000+

• Factors influencing costs:

  • Mode of arrival to ER (private/public, standalone).

  • Services provided: tests, imaging, medications.

Cost Responsibility in the U.S.

• Most individuals are responsible for actual medical costs under the private care model.

• Preference for private model over socialized medicine, despite unaffordability of full healthcare costs.

• Many Americans utilize separate insurance to mitigate costs, yet affordability is not guaranteed.

Rationale for Health Insurance

• Insurance as a response to unpredictable, high medical costs, shielding individuals from catastrophic expenses.

• Explanation of the insurance model: high risk, low predictability.

• Premiums collected to spread financial liability across multiple insured individuals.

Understanding Health Insurance Coverage

• Insurance only covers part of medical bills; the extent depends on the cost of the plan.

• Components of Health Insurance:

  • Premiums: Regular payments regardless of usage.

  • Deductibles: Amount to be paid out of pocket before insurance starts to pay.

  • Co-pays & Co-insurance: Costs incurred at point of service following deductible fulfillment.

  • Out of Network Costs: Services that aren't covered by the plan result in full payment responsibility.

Example of Healthcare Costs for HDP

• Monthly figures illustrating various premiums and costs associated with medication and urgent care visits:

  • Premium: $250 (required monthly cost)

  • Medication: $150

  • Urgent Care Charges: $650 until deductible is met.

  • HDPs provide some level of protection against extreme expenses, particularly after deductible is satisfied.

Challenges with Comparison Shopping

• Comparing health plans is complex and requires assessment of both costs and benefits.

• Analysis Steps:

  1. Calculate total annual cost of premiums.

  2. Adjust for employer HSA contributions if applicable.

• Consider what happens when expenses equal the deductible for both plans.

Healthcare Financial Burden

• Medical insurance is crucial for financial health of families, but bills can still be significant.

• Average costs rising disproportionately, making it harder for middle-class families to cope.

• % of income spent on medical expenses can exceed 25-50% without insurance.
   

Consequences of Rising costs

• Continued escalation of healthcare costs adds to the financial strain on families, contributing to higher rates of bankruptcy.

• Employers increasingly limiting their healthcare offerings, particularly in part-time or contractor positions

CHAPTER 12B1

1. Describe the difference between viewing healthcare as a privilege vs. a right.

• People who have money can get care, those who don’t have to hope for a ssistance.

2. Compare and contrast the private care model and the socialized care model.

• Private care models- people pay for the cost of the care they get

• Socialized care model- governments collect additional money, then proviedes health care

3. Explain how most Americans that can afford healthcare manage to do so.

• Most people simply cannot afford to pay the full price of healthcare, so they get health insurance.

4. Describe how healthcare insurance works in general.

• People pay premiums to their insurance provider on a regular basis, allowing them to share the costs of medical services with their insurer. When they need care, they can access medical services at a lower out-of-pocket cost due to the coverage provided by their insurance plan.

5. Explain what healthcare insurance companies must consider carefully to stay in business.

• The goal of insurance companies is the same as any company, to make money. They have to think about things like how much to charge, weather people actually need care, and how many policies are in force.

6. List and explain the various costs associated with healthcare insurance and how these usually vary with low-cost vs. high-cost policies.

7. Explain how individuals with healthcare insurance can still end up paying directly for some of their healthcare.

• People with insurance can often find themselves paying full price for care if they havent reaches their decutible. Additionally, out-of-pocket expenses, such as co-payments and co-insurance, can accumulate even after the deductible has been met, particularly for services that fall outside the covered benefits of their plan.

10. Using the 2013 Milliman Medical Index, describe the different parts of the breakdown of the annual medical costs for a middle-class family of four, and who pays for each part.  Characterize the overall and component costs.

• Medical bills can consume 25-50% of the families income.

11. Explain the nature and size of the increase in medical costs for that same notional family between 2002 and 2013. 

• The total medical costs increased signifigantly.

12. Describe the percentage of Americans with unpaid medical bills and the relationship between these bills and personal bankruptcies in the US.

13. Explain the trend between 2008 and 2012 in how Americans were obtaining or forgoing health insurance.  Describe the possible role of the Great Recession in those trends.

14. Compare and contrast the 2008-2012 picture with the 2001-2017 trends in types of health insurance and who pays for it.

15. Describe how types of jobs, and types of healthcare plans affect the availability of affordable, high-quality healthcare for Americans.