1. Understand the characteristics of the five different types of health maintenance organizations (HMOs).
1. staff model
Closed-panel HMO (which patients can receive services only through a limited number of providers) in which physicians are employees of HMO Providers see members in HMO own facilities
2. Group model
HMO that contracts with single multi-speciality medical group to provide care to HMO members Group may work with HMO, or work with non-HMO patients too HMO pays medical group a negotiated per capital rate, which group distributes among physicians
3. IPA
Organization composed of independent practicing physicians who maintain their own offices and band together for contracting their services to HMOS, PPOs and insurance companies Physicians remain in their offices and they see HMO enrollees No group practice Capitation or fee-for-service
4. network model
HMO that contracts with multiple physicians groups to provide services to HMO members May involve large single and multi-specialty groups
5. mixed: HMO that combines features of more than one HMO model
2. Be able to explain the improvements to health care access, as well as the privacy standards established under the Health Insurance Portability and Accountability Act (HIPAA).
HIPAA (1996)
A patient’s right to view, download, transmit, and gain access to their medical records was solidified into law
Impact was slow to be percepti
Be familiar with Prepaid Group Practices and how they influenced the way in which physicians organized for practice.
First appeared in the 1890s
Payment to physicians of a flat fee on a regular basis to guarantee medical coverage for patient for a year (capitation)
Payment for this medical care with indemnity health insurance
Traditionally provided by BCBS before managed care
Insurance that reimburses an individual for fees paid for medical services after they are performed
Fee-for-service basis to provider or patient
Beneficiaries pays premiums (sums) to insurance company, and company pays providers for the care beneficiaries used
Fee-for-service or item0of-service basis after the fact
Personal payments (deductibles and coinsurance) that beneficiaries must pay themselves
Kaiser Permanente and HIP
Kaiser was example of group model
Physicians join together to form their own company
The company contracts to provide medical services with financing and administrative entity that sells prepaid health insurance coverage package to beneficiaries
Physicians group company pays its own members by salary of capitation basis
HIP was example of staff model
Physicians work directly for PGP organization on a salaried basis
Advantages:
to share knowledge and responsibility; the establishment of a rational division of labor between generalist and specialist; improved quality of care; regularly allotted time for continuing medical education; a regular work schedule; guaranteed (although not necessarily high) income; a fringe benefit package, including malpractice insurance; better access to ancillary personnel and services; and freedom from concerns with the business aspects of medical practice.
the advantages include no or low charges at time of service, one-stop shopping for 24-hour, 7-day service, continuity of care, and protection against unnecessary hospitalization and surgery.
The primary disadvantages for patients center around the possible development of a clinic atmosphere, loss of choice of physician and hospital, delays in receiving service, locational inconvenience, and impersonality
3. Be able to explain the developments undertaken by HMOs to meet the challenges of the next century.
Introduction of Point of Service plans, allowing members to use non-plan providers by paying an additional fee
Increasing cooperation between HMOs and major health insurers such as BCBS
Acceptance of worker’s compensation cases
Expansion of health promotion/disease preventions, work site safety, employee’s assistance programs
4. Beginning with solo physician practices, be able to explain how the organization of U.S. health care delivery evolved over the 20th century.
Early 20th Century (1900s)
Predominantly a cottage industry with solo physician practices.
Hospitals were independent entities; long-term elderly care was home-based.
Pharmaceuticals and medical devices were small-scale businesses.
Employer-based health insurance began to emerge in the 1910s, with early prepaid group practices.
Expansion of Employer-Based Health Insurance (1920s–1940s)
1929: Blue Cross Plans introduced prepaid hospital care (e.g., Baylor University Hospital).
1930s: Blue Shield Plans began reimbursing physician services.
1940s–1950s: Employer-based insurance expanded due to World War II wage caps, incentivizing health benefits.
Growth of Government Involvement (1960s)
1965: Medicare and Medicaid established to provide coverage for the elderly, disabled, and poor.
Medicaid was initially a welfare program, whereas Medicare targeted seniors.
Managed Care and Health Maintenance Organizations (HMOs) (1970s–1990s)
1973: HMO Act passed to encourage prepaid group practices.
Rise of Managed Care Organizations (MCOs) aimed at cost control and efficiency.
Increased competition among HMOs, PPOs (Preferred Provider Organizations), and other insurance models.
Integration and Consolidation (1990s–2000s)
Growth of Integrated Delivery Systems (IDS) combining hospitals, physician groups, and insurers.
Hospital mergers and affiliations increased to enhance financial sustainability.
Expansion of Children’s Health Insurance Program (CHIP) in the 1990s.
Challenges and Continued Evolution (2000s–2010s)
Decline of employer-based insurance for small businesses.
Rising concerns about for-profit vs. non-profit healthcare models. Continued managed care dominance, with evolving regulatory policies.
5. Be able to articulate the advantages and disadvantages for physicians in various medical practice settings.
Solo Practice
Advantages:
Full autonomy in decision-making and patient care.
Direct control over income and expenses.
Strong physician-patient relationship due to continuity of care.
Disadvantages:
High administrative and financial burden.
Limited resources for advanced technologies and support staff.
Challenges in maintaining work-life balance (on-call responsibilities).
Group Medical Practice (Single or Multispecialty)
Advantages:
Cost-sharing for office space, equipment, and support staff.
Easier coverage for nights, weekends, and vacations.
Opportunity for collaboration and informal consultations.
Increased efficiency and access to allied health personnel.
Disadvantages:
Less autonomy compared to solo practice.
Potential conflicts in income distribution among group members.
Administrative complexities of managing a group practice.
Prepaid Group Practice (PGP)
Advantages:
Guaranteed regular income (salary or capitation).
Access to a structured work schedule with predictable hours.
Opportunities for collaboration and continued medical education.
Reduced business concerns as administrative tasks are handled by the organization.
Disadvantages:
Lower income potential compared to private fee-for-service practices.
Less flexibility in choosing treatment plans due to financial constraints.
Resistance from traditional medical organizations (e.g., AMA opposition to capitation).
Health Maintenance Organization (HMO) Staff Model
Advantages:
Stable salary and employment benefits (e.g., malpractice coverage, retirement plans).
Structured working hours without solo administrative burden.
Access to advanced healthcare facilities and diagnostic tools.
Disadvantages:
Limited autonomy—physicians must follow HMO policies and treatment guidelines.
Emphasis on cost control may restrict certain medical interventions.
Increased oversight and utilization reviews affecting clinical decision-making.
Independent Practice Association (IPA) within HMOs
Advantages:
Physicians maintain independent offices while contracting with an HMO.
Some flexibility in setting fees and managing patient care.
Potential for steady patient referrals from the HMO network.
Disadvantages:
Subject to deselection if physicians do not comply with HMO guidelines.
Payments may be lower than traditional fee-for-service models.
Physicians may have less bargaining power compared to larger health systems.
6. Be familiar with the goals shared by those who advocate for a public health care system vs those who favor a private health care system.
Goals of Public Health Care System Advocates
Health care as a right, not a commodity – Ensures that every individual has access to care, regardless of ability to pay.
Equity in health care – Aims to reduce disparities in quality and access to medical services.
Government responsibility – Believes the state should provide and regulate health care to ensure fairness and efficiency.
Focus on prevention and public health – Supports proactive measures to improve population health and reduce costs.
Minimized profit motive – Views profit-driven health care as a barrier to ethical patient care.
Universal access – Strives to eliminate financial barriers like high insurance costs, deductibles, and copays.
Goals of Private Health Care System Advocates
Market-driven efficiency – Believes competition fosters innovation, better quality, and cost control.
Personal choice and autonomy – Supports individuals selecting their own providers and insurance plans.
Limited government intervention – Argues that government control leads to inefficiency and bureaucracy.
Encouraging innovation – Views private-sector investment as crucial for medical advancements and new treatments.
Rewarding providers based on performance – Prefers models where doctors and hospitals compete for patients based on quality and outcomes.
Cost containment through competition – Claims a free-market system can regulate prices better than government-run programs.
7. Be able to identify which aspects of health care systems may prevent timely access for those at risk for poor health.
High Costs of Healthcare – The U.S. spends a significant amount on healthcare, yet many individuals cannot afford necessary medical services .
Lack of Health Insurance Coverage – Many individuals remain uninsured, which limits their ability to access timely care .
Fragmentation and Misallocation of Resources – Healthcare services are not always efficiently distributed, leading to both excess and inadequate care in different areas .
Geographic and Demographic Disparities – Healthcare services are unevenly distributed, affecting rural and underserved populations the most .
Emphasis on High-Tech, Expensive Interventions – The focus on advanced treatments rather than preventive care can delay necessary early interventions .
Rationing of Access Based on Race and Socioeconomic Status – Systemic inequalities contribute to disparities in healthcare access .
Limited Availability of Preventive Services – Many evidence-based prevention and health promotion strategies are underutilized, leading to preventable illnesses .
Quality Issues in Healthcare Delivery – Problems with healthcare quality can result in inefficiencies, medical errors, and delays in care .
8. Be able to identify and explain the challenges our health care system must address to be recognized as the world’s best-performing system.
High Costs of Healthcare – The U.S. spends more on healthcare than other countries, yet many people struggle with affordability.
Inequitable Access – Disparities in healthcare access persist based on socioeconomic status, geography, and insurance coverage.
Lack of Universal Coverage – Unlike many other high-income nations, the U.S. does not provide healthcare for all citizens.
Consolidation of Healthcare Providers – Mergers and acquisitions among hospitals and insurers reduce competition and can drive up costs.
Rising Cost of Prescription Drugs – Drug pricing remains a significant concern, making medications unaffordable for many.
Technological Advancements and Data Use – While technology has the potential to improve healthcare, challenges remain in data integration, privacy, and equitable access to innovations.
Emphasis on Treatment Over Prevention – The system often prioritizes expensive treatments rather than cost-effective preventive care.
Mental Health Integration – Mental and behavioral health services need better integration into overall healthcare to improve patient outcomes.
Regulatory and Policy Uncertainty – Frequent policy shifts and political debates around healthcare reform create instability in the system.
Privatization vs. Public Health Balance – The tension between private and public sector roles in healthcare creates ongoing debate over the best approach to care delivery.
9. Understand and be able to explain characteristics of the Clinton Health Plan.
Summary of the Clinton Health Plan (CHP)
The Clinton Health Plan, introduced in 1993 by President Bill Clinton, was a comprehensive healthcare reform proposal aimed at providing universal health coverage in the United States. It sought to control rising healthcare costs, reduce inefficiencies, and ensure that all Americans had access to medical care. The plan relied on a combination of employer mandates, government oversight, and health alliances to achieve its goals. However, due to strong opposition from various sectors, including the insurance industry, medical providers, and political adversaries, the plan ultimately failed to pass through Congress.
Key Characteristics of the Clinton Health Plan
Universal Coverage – The plan proposed to extend healthcare coverage to all Americans, ensuring that no one was left uninsured. This was a major shift from the existing system, where millions lacked access to healthcare due to cost and employment status.
Employer Mandate – Under the CHP, employers were required to provide health insurance to their employees or contribute financially to a public insurance plan. This mandate was designed to prevent businesses from opting out of the healthcare system and shifting the burden to the government.
Health Care Alliances – The plan introduced state-run entities called “health alliances,” which would act as intermediaries between consumers and insurance providers. These alliances would negotiate insurance rates, regulate healthcare plans, and simplify the purchasing process for individuals and small businesses.
Standardized Benefits Package – A national benefits package would be developed and periodically reviewed by a National Health Board. This package would define the essential healthcare services that all insurance plans must cover, ensuring consistency and fairness across the system.
Cost Control Measures – The CHP aimed to reduce inefficiencies and administrative costs in the healthcare system. By simplifying insurance processing and reducing wasteful spending, the plan sought to control the rapid rise in healthcare expenditures while maintaining quality care.
Choice of Plan and Provider – Unlike some nationalized healthcare models, the CHP preserved patient choice. Individuals could select from various healthcare plans, and within those plans, they had the freedom to choose their doctors and hospitals.
Portability of Insurance – One of the key features of the plan was ensuring that individuals did not lose health insurance when changing jobs or becoming unemployed. Coverage would follow them throughout their careers, preventing gaps in care and financial hardship due to job transitions.
Government Oversight and Regulation – While the CHP maintained a role for private insurance companies, it introduced stronger government oversight to ensure fair pricing, consumer protections, and equitable access to care. The federal government would set national guidelines, while states would manage implementation.
Opposition and Defeat – The plan faced intense opposition from the insurance industry, medical associations, and conservative lawmakers. Critics labeled it as excessive government intervention and an expansion of bureaucracy. A well-funded opposition campaign and political resistance in Congress led to the plan's failure in 1994.
10. Be able to identify and explain features of the Health Security Act proposed by Clinton.
Universal Coverage – Aimed to provide health insurance for all Americans.
Managed Competition – Encouraged competition among private insurance plans to lower costs.
Health Alliances – Regional health purchasing cooperatives to negotiate prices on behalf of consumers.
Employer Mandate – Required businesses to provide health insurance to employees or pay into a public fund.
Government Regulation – Set limits on premium increases and controlled healthcare costs.
Standardized Benefits – Established a uniform package of essential healthcare services.
Guaranteed Issue – Prevented insurers from denying coverage based on pre-existing conditions.
Subsidies for Low-Income Individuals – Provided financial assistance to those who couldn’t afford insurance.
Cost Containment Measures – Included spending caps and efficiency incentives for providers.
National Health Board – Oversaw the implementation and regulation of the system.
Opposition & Failure – The act faced strong resistance from businesses, insurance companies, and political opponents, leading to its failure in Congress.
11. Be able to identify which entity first voiced concerns over problems in the U.S. health care system and what was their reasoning.
Entity: The Committee on the Costs of Medical Care (CCMC)
Timeframe: Established in 1927, published findings in 1932
Concerns Voiced:
The U.S. health care system had issues with cost and access.
Many people were not receiving adequate medical services in terms of quantity and quality.
Health care costs were inequitably distributed, causing financial strain.
The result was preventable physical pain, mental anguish, and unnecessary deaths.
The situation led to economic inefficiency and social waste.
Reasoning:
The United States had the economic resources, organizational ability, and technical experience to solve these problems.
However, without intervention, these issues would persist.
Impact:
Their findings set the stage for later discussions on National Health Insurance (NHI) and health care reform efforts.
12. Be familiar with the history of NHI in the United States.
Early 20th Century Beginnings
The first campaign for NHI was led by the American Association for Labor Legislation (AALL) in 1906.
President Theodore Roosevelt included NHI as part of his 1912 Bull Moose Party platform.
In 1916, AALL proposed a state-based compulsory medical care plan covering low-income earners.
The American Medical Association (AMA) initially supported but later opposed it.
New Deal and Post-World War II Era
The Social Security Act of 1935 initially considered health insurance but was removed due to AMA opposition.
Senator Robert Wagner introduced NHI bills in 1939 and 1943, but both failed.
President Harry Truman pushed for NHI in 1945 and 1949 but was met with strong resistance, particularly from the AMA.
1960s–1970s: Medicare and Renewed Interest in NHI
Medicare and Medicaid were enacted in 1965 under President Lyndon B. Johnson, offering government-backed health coverage for the elderly and low-income individuals.
During the 1970s, multiple NHI proposals emerged from various stakeholders, including labor unions and the AMA.
The Nixon administration proposed a more employer-based health insurance approach in 1971.
Senator Ted Kennedy pushed for a single-payer system but was unsuccessful.
1980s–1990s: Stagnation and the Clinton Health Plan
The Reagan-Bush era (1981–1993) saw NHI fade from political discussions.
President Bill Clinton attempted health care reform in 1993 with the Clinton Health Plan, aiming for universal coverage through employer mandates and regional health alliances.
Opposition from Republicans, businesses, and the insurance industry led to the plan's defeat in 1994.
2000s–2010s: The Affordable Care Act (ACA)
President Barack Obama pursued health care reform, avoiding a single-payer system.
The ACA (Obamacare) was signed into law in 2010, expanding Medicaid, creating health insurance exchanges, and prohibiting discrimination based on pre-existing conditions.
In 2012 and 2015, Supreme Court rulings upheld key ACA provisions despite Republican opposition.
Current Status
The ACA remains in effect, but debates over government versus private-sector roles in health care continue.
13. Understand and be able to explain in detail the Affordable Care Act, including goals, objectives, key features, rights and protections, provisions, etc.
Goals of the ACA
Expand access to affordable health insurance for the uninsured.
Improve affordability for those already insured.
Slow the rise in healthcare costs without increasing the federal deficit .
Key Features of the ACA
Insurance Market Rules:
Prohibits denial of coverage due to preexisting conditions.
Limits premium variations based on health status.
Requires essential benefit packages that ensure comprehensive coverage .
Health Insurance Exchanges:
Provides a marketplace for individuals and small businesses to compare and purchase affordable health plans .
Affordability Provisions:
Expands Medicaid eligibility up to 133% of the federal poverty level.
Offers premium assistance on a sliding scale for families up to four times the poverty income level .
Employer Responsibilities:
Encourages employer-sponsored insurance.
Provides tax credits to small businesses for offering health coverage.
Requires large employers to contribute if employees receive government subsidies .
Medicare Enhancements:
Closes the prescription drug “doughnut hole” by 2020.
Provides $250 rebates to seniors affected by the coverage gap .
Primary Care & System Improvements:
Increases Medicare and Medicaid payments for primary care.
Supports patient-centered medical homes for better-coordinated care.
Expands community health centers and the National Health Service Corps .
Cost & Quality Control:
Establishes a Medicare Innovation Center to promote payment models based on quality, not volume.
Forms an Independent Payment Advisory Board to recommend cost-saving measures .
Public Health Investments:
Funds preventive care, quality reporting, and modern health information technology.
Supports national health strategies and workforce development .
Rights and Protections Under the ACA
Consumer Assistance Programs: Helps patients with complaints, appeals, and understanding their rights.
Appeals for Denied Claims: Patients can request reconsideration of denied payments.
Preventive Care at No Cost: Coverage includes recommended preventive health services without copays.
Patient’s Bill of Rights: Informs consumers of their healthcare protections.
Protection for Children with Preexisting Conditions: Insurers cannot deny coverage for children under 19 based on health conditions.
Choice of Doctors & Emergency Access: Patients can choose doctors within their network or receive emergency care outside the network.
Grandfathered Plans: Existing plans before ACA enactment may remain but do not include all new protections.
Ban on Insurance Cancellations: Insurers cannot cancel policies due to minor application errors .
Insurance Provisions
Preexisting Condition Insurance Plan (PCIP): Provides coverage to those denied insurance due to medical history.
Young-Adult Coverage: Extends dependent coverage up to age 26.
Affordable Insurance Exchanges: Online marketplaces for individuals and small businesses.
Nonprofit Consumer-Run Plans (CO-OPs): New insurance options for small businesses and individuals.
Premium Value Standards: Limits insurer spending on non-healthcare costs.
Ban on Lifetime & Annual Limits: Restricts annual benefit limits and eliminates lifetime caps .
Employer & Senior Provisions
Small Business Tax Credits: Offers incentives for small employers to provide health insurance.
Retiree Reinsurance Program: Helps companies cover early retirees (ages 55-64).
Medicare Preventive Services: Provides cost-free screenings and wellness services.
Medicare Drug Discounts: Discounts for seniors in the prescription drug coverage gap .
Supreme Court Challenges
In 2012, upheld the ACA’s individual mandate as a tax.
In 2015, ruled that subsidies were legal for all Americans, ensuring nationwide tax credits .
14. Be familiar with the FFS payment model during COVID-19, including how it was utilized, its associated challenges, its impact on insurance companies, etc.
Utilization of FFS During COVID-19
The FFS model was the predominant payment structure for U.S. hospitals and providers before and during COVID-19.
Hospitals typically received payments based on claims submitted to payers, which included specific diagnosis-related codes.
During the early pandemic, hospitals shifted resources to COVID-19 care, reducing elective surgeries and outpatient care, which significantly impacted revenue .
Challenges Associated with FFS
Many ambulatory and outpatient services were suspended, reducing revenue streams for providers dependent on FFS reimbursements.
Physician practices that remained open experienced volume drops of 50%-60%, leading to financial distress.
Hospitals faced financial instability due to the decline in non-COVID patient visits and postponed elective procedures .
Increased expenses for COVID-19 care (e.g., PPE, staffing, emergency facilities) further strained hospital budgets .
Impact on Insurance Companies
Insurance companies experienced record profits in the second quarter of 2020 due to lower utilization of non-COVID-related services.
UnitedHealth’s profits nearly doubled compared to the same quarter in 2019, as fewer claims were submitted while premiums continued to be paid.
As volumes returned to baseline levels in later quarters, payments to providers resumed, and insurer profits stabilized .
Government Interventions
The federal government provided financial relief through multiple stimulus bills, including:
CARES Act: Allocated $178 billion for frontline providers and offered a 20% Medicare add-on payment for treating COVID-19 patients.
Families First Coronavirus Response Act: Mandated insurance coverage for COVID-19 testing without cost-sharing.
Paycheck Protection Program and Health Care Enhancement Act: Reimbursed hospitals for COVID-19-related expenses and revenue losses .
15. Be able to articulate which aspects of the governments relationship and involvement with our health care system were most important throughout the COVID-19 pandemic.
1. Public Health and Scientific Knowledge
The CDC played a crucial role in public health policies, data collection, and vaccination implementation.
Public health data on COVID-19 cases, fatalities, and spread were essential for policy-making and treatment approaches.
Scientific inquiry into the virus’s transmission and control was critical but was sometimes hindered by political interference.
Misinformation, particularly regarding mask use and vaccines, created challenges in public health messaging and response efforts .
2. Regulatory Adjustments
The federal government relaxed numerous regulatory barriers to allow for quicker responses to COVID-19.
Key regulatory changes included:
Expedited modifications to Certificate of Need (CON) regulations for hospital expansions.
HIPAA flexibility to enable widespread use of telehealth services.
Emergency approvals for lab-developed COVID-19 tests without prior FDA preapproval.
Over 100 waivers from CMS to reduce administrative burdens on hospitals .
3. Leadership and Federal-State Coordination
The U.S. health care system operates under a federalist structure, leading to fragmented decision-making across federal, state, and local levels.
A lack of unified leadership led to inconsistencies in COVID-19 response strategies.
Some states had stricter regulations and resource redistribution, while others took a more relaxed approach.
Questions arose about the effectiveness of a public-private hybrid health care system versus a fully public or fully private system .
4. Government Funding and Financial Support
The government provided financial relief through stimulus bills, including:
CARES Act ($178 billion) for hospitals and frontline providers, including a 20% Medicare add-on payment for COVID-19 treatment.
Families First Coronavirus Response Act mandated insurance coverage for COVID-19 testing with no cost-sharing.
Paycheck Protection Program and Health Care Enhancement Act allocated $100 billion to hospitals and testing infrastructure .
5. Emergency Health Care Infrastructure
Government agencies, including the Army Corps of Engineers, converted stadiums and convention centers into makeshift hospitals.
Many of these facilities were underutilized due to challenges in transferring patients from traditional hospitals.
16. Be familiar with the various bills that were passed to help provide financial support to hospitals during the COVID-19 pandemic.
Coronavirus Preparedness and Response Supplemental Appropriations Act (2020)
Focused on emergency public health initiatives.
Provided additional funding and flexibility for telehealth services .
Families First Coronavirus Response Act (2020)
Mandated health insurance coverage for COVID-19 testing without cost-sharing.
Covered uninsured individuals through the National Disaster Medical System.
Required small employers to provide emergency paid sick leave and family medical leave, reimbursed via tax credits .
Coronavirus Aid, Relief, and Economic Security (CARES) Act (2020)
Allocated $178 billion to hospitals and frontline providers.
Provided a 20% Medicare add-on payment for COVID-19 patient treatments.
Reimbursed hospitals for treating uninsured COVID-19 patients.
Relaxed regulatory requirements and limited liability in certain cases .
Paycheck Protection Program and Health Care Enhancement Act (2020)
Included $100 billion to reimburse hospitals for COVID-19-related expenses and revenue losses.
Funded COVID-19 testing infrastructure and surveillance programs .
Consolidated Appropriations Act (2021)
Provided $69 billion for ongoing COVID-19 response efforts.
Included $9 billion for health care providers and $4.5 billion for mental health services .
American Rescue Plan Act (2021)
Shifted focus to public health initiatives such as:
COVID-19 testing and tracing.
Vaccine distribution and administration.
Health monitoring and pandemic preparedness .
Distribution Challenges
Initial hospital funding was based on hospital revenue, disproportionately benefiting financially stable hospitals over those in underserved areas.
Later funding bills adjusted allocation formulas to better support hospitals in high-need areas, though disparities remained .