Health Care Financing

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Health Care Financing
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Where do we spend our Health Care Dollars?

• Hospital
• Physician Services
• Nursing Home
• Pharmaceuticals
• Net Cost of Private Insurance
• Other Physicians
• Dental Care
• Etc

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Who Pays the Bill?

• Government
• Medicare/Medicaid
• Private Sector
• Private Health Insurance
• Private Philanthropy
• Individual
• Out-of-pocket

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Principles of Insurance

• Purpose to reduce to economic and financial
  impact of catastrophic events
• Payment Structure
• Premium
• Deductible
• Co-payment

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Managed Care

• HMO
• Premium
• Co-payment
• PPO
• Premium
• Deductible
• Co-payment
• Fee-for-Service
• Premium

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Health Maintenance Organization

• Staff Model
• Central location including administration,
  physicians, laboratory, etc
• Physicians are employs of the agency
• Group/Network Model
• Physicians working outside of the central
  location the group is employed by the agency
• Independent Practice Model
• Physicians practicing outside to the program but
  providing services via contract to the
  organization

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HMO Level of Satisfaction

• Patients
• Comprehensive Care
• Little or No Paper Work
• Stable Premiums
• Limited Selection of Primary Care Provider
• All services except emergency require a
  gate-keeper
• Hard to Access a Specialist
• Pre-approval of Hospital Care
• Physicians
• More Time with patients
• Limited Autonomy
• Stable Income

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Preferred Provider Organization

• Sponsor
• Administrative component which collects premiums,
  organizes, and pays providers
• Preferred Providers
• Multi-discipline health care service provides who
  contract with sponsor for pre-established fee
  structure.

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PPO Level of Satisfaction

• Patients
• Broad selection of providers
• Gate-keeper is not necessary
• Premium stable
• Minimal paperwork
• Regular co-pay
• Annual maximum out-of-pocket
• Providers
• Increase patient flow
• Service not limited to PPO patients

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Government Health Insurance

• Medicare
• Established as Title XVIII of the Social Security
  Act in July 1965
• Purpose to supplement health care costs to
  retired persons disabled and others added later.
• Medicaid
• Established as Title XIX of the Social Security
  Act in July, 1965
• Purpose to cover the health care costs of
  people who are medically indigent, i,e. below the
  poverty level.

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Medicare Structure

• Part A
• No premium
• Annual Deductible
• Coverage
• Hospital up to 60 days basic care per day cost
  beyond 60 days
• Skilled Nursing up to 100 days per year first
  20 days at not out-of-pocket cost 119/day
  beginning at twenty first day
• Home Care basic health services in the home
  setting 5/visit
• Hospice Care skilled care for the terminally
  ill. No out-of-pocket cost except for medically
  durables

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Medicare Structure

• Part B
• Fee Structure
• Premium 93.50/month
• Deductible 124/ year
• Co-payment 20 of costs
• Coverage
• Most all health care services except for
  prescription drugs and experimental or
  questionable treatments

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Medicare Structure

• Part D
• Fee Structure
• Premium varies with type of coverage
• Co-payment so called donut hole
• Coverage
• Prescription Drug Costs
• Most compensates for catastrophic costs

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Medicaid Structure

• Administration
• Managed by the individual states
• Matching funds from the federal CMS
• Coverage
• Most health care costs to medically indigent
  including prescription drugs
• CHIPS Program
• Children from families making lt 40,000

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National Single Payer Program

• Fancy name for Health Care Programs administered
  solely by the Federal Government who established
  the parameters and pays the fees.
• In other setting also called Socialized Health
  Care
• Pros
• Cons