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Health Care Organization

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Goals of health care system. Prolong life/defer death ... Commission on the Costs of Medical Care (1932) recommended national health insurance ... – PowerPoint PPT presentation

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Title: Health Care Organization


1
Health Care Organization
  • Jan Probst, PhD
  • Department of Health Administration

2
Housekeeping
  • Introductions
  • Review syllabus
  • Field questions

3
People need
  • Need versus demand
  • What is health?
  • Health as function

4
Goals of health care system
  • Prolong life/defer death
  • Minimize departure from norms, discomfort,
    disability
  • Promote wellness
  • Promote satisfaction with environment
  • Extend resistance/promote capacity
  • Increase participationLRD, p 45

5
A patient needs...
  • Preventive Care
  • Primary care
  • Specialized care
  • Chronic care
  • Hospital care
  • Long-term care
  • Subacute care
  • Rehabilitative care
  • End-of-life care

Shi Singh 1998, p. 20
6
The system.responds?
Shi Singh 1998, p. 8
7
Where we are comes from where we were
  • Three streams of history
  • Emergence of physicians
  • Changing role of hospitals
  • Evolution of supporting professions
  • A tangled web of dollars and control

8
Who succeeded Louis XIV?
Bernier, O. (1987)
9
On the shoulders of giants
  • Competing theories
  • Homeopathic
  • Osteopathic
  • Allopathic
  • Chiropractic
  • Emergence of a learned profession

10
Emergence of allopathic medicine
  • Legitimate complexity
  • Bacteriology
  • Anesthesia
  • Antisepsis
  • Asepsis
  • Licensing

Starr, P. (1982)
11
Formalization of training
  • Early options school or apprenticeship
  • Flexner report (1910)
  • Requirements for entry
  • Standardized training
  • Self-regulating

12
Current Medical Practice
  • Number of physicians (1997)
  • 756,710 total, 664,556 active physicians
  • 25.3 physicians per 10,000 population
  • 645,203 Nonfederal, 19,353 Federal
  • Type of practice
  • 216,598 (32.6) primary care generalists

13
Unbalanced scales
  • What would you choose?

14
Hospitals
  • Introduced by the Romans
  • Charitable institutions
  • Emergence of specialization
  • Sick Poor
  • Types of sickness

15
Transition to physician workplace
  • Specialized (aseptic) environment
  • Specialized tools (X-ray)

16
The hospitals dilemma
  • Specialized equipment is expensive
  • Charity cannot cover these costs
  • Individuals cant always pay (Great Depression)
  • Commission on the Costs of Medical Care (1932)
    recommended national health insurance

17
Hospital ownership
  • Voluntary hospitals (not for profit)
  • Sectarian
  • Nonsectarian
  • For-profit hospitals
  • Government hospitals

18
Hospitals Unique Structure
  • Hospital provides nursing, technical capability
    and hotel services
  • Physicians recruit patients and direct the
    process of care

19
Other health manpower
  • Approximately 11M people work in health care
  • Nurses the first support profession
  • 60 in auxiliary roles

20
Evolution of Nursing
  • Florence Nightengale
  • Military model
  • Uniforms
  • Hierarchy
  • Linked to physicians
  • Wildly popular from 3 schools in 1873 to 1,129
    in 1920
  • Licensing beginning 1903

21
Nursing under Pressure
  • A supportive occupation
  • Difficult to practice independently
  • Institutional practice
  • Predominantly female
  • Service over money

22
The patient needsplanning?
Preventive Care Primary care Specialized
care Chronic care Hospital care Long-term
care Subacute care Rehabilitative
care End-of-life care
Shi Singh 1998, p. 20
23
Wrapping up history
  • Legitimate complexity entails extensive training
  • Director of a team--by law
  • Direct care in offices, hospitals and other care
    sites
  • Nursing and other professions support medicine
  • Support is not without tension

24
Wrapping up history
  • Specialists versus generalists
  • Finance creates a tangled web
  • Doctor insurance/hospital insurance leads to
    mixed lines of authority
  • Emerging managed care trends attempt to increase
    control at all levels

25
BREAK
26
Money, money
  • Who pays the piper?
  • Everyone, and they all want a different tune
  • Government
  • People out of pocket
  • Insurers

27
Topics
  • National health care expenditures
  • Amounts
  • Trends
  • Major financing mechanisms and their impact
  • How financing affects management
  • Other national systems

28
Your job, my bill
  • GDP in 1997 8,111B
  • Health care
  • 1,092B or 13.5 of GDP
  • 21.1 of all Federal expenditures
  • 14.6 of all State local government expenditures

Health 1999, NCHS
29
Moderating growth
  • Health care as GDP, 1960-1995

30
Who pays?
  • Overall
  • 53.6 private
  • 46.4 government

31
How its paid
  • Most persons have insurance thru work
  • Blacks (24.5) and Hispanics (20.1) more likely
    than Whites (9.4) to receive Medicaid
  • Hispanics (31.6) most likely to be uninsured

Health coverage for persons under 65
32
Different care, different payor
Hospital Funding
Physician funding
Nursing home care
33
Evolution of payment mechanisms
  • The chicken
  • The Great Depression
  • The Commission on the Costs of Health Care (1932)
  • Group practice versus the Blues

34
Key characteristics of Fee for Service Insurance
  • Separate payment lines
  • Physicians (others)
  • Hospitals
  • Independence for each practitioner
  • Cost reimbursement
  • Employer funding Cui bono?

35
First appearance of the ratchet
  • Baseline 50 per delivery (usual when the
    patient paid)
  • Year One 75 per delivery (50 insurer, 25
    patient)
  • Year Two 125 per delivery

36
Moral Hazard One
  • Fees can be self-determined
  • Fees can be self-generated

37
Empty places at the table
  • Medicare
  • An entitlement program (age disability)
  • Federal standard across US
  • Medicaid
  • An eligibility program
  • State administered with Federal match dollars

38
Medicare structure
  • Part B Physician and other outpatient services
  • Funded 75 tax , 25 enrollee payment
  • Copays (usually 20 of approved charges) and
    deductibles
  • Medigaps Provide supplemental coverage
  • Part A Hospital care
  • Automatic with Social Security funded by general
    tax revenue
  • Coypayments and deductibles
  • Deductible 716 per benefit period

39
Medicaid
  • Health care for the poor
  • Federal match dollars fund 55 (SC 73)
  • Minimum service specifications
  • Who is eligible?
  • AFDC
  • Old Age Assistance
  • Aid to the Blind
  • Permanently totally Disabled
  • Needy children lt 21

40
Effects of Medicare coverage
  • The sickest persons now had resources
  • Demographics plus fee ratchet
  • Concentration of costs with a single, publicly
    accountable payor
  • STOP THE INSANITY!

41
Medicare cost containment
  • Assignment
  • Physician only charges Medicare-allowable fee.
  • Patients only pay 20 of that fee (no extra bill)
  • Diagnostic Related Groups (DRGs)
  • A preset amount per diagnosis for hospitalization
    (prospective payment system)
  • Keep the change --gt get patients out quickly

42
More Medicare cost containment
  • Resource Based Relative Value System (RBRVS)
  • Applies to physicians
  • Equal pay for equal work
  • Private FFS insurance frequently copies Medicare

43
Common themes
  • Patient has free choice of provider
  • Constrained only by willingness of provider
  • A fee for service structure
  • Patient seeks care (service)
  • Provider bills for care (fee)
  • Insurer (and patient) pay
  • No overall organizing principle except the patient

44
Something completely different
  • Prepaid group practice of the 1930s
  • HMOs of the 1970s
  • Managed Care of the 1990s
  • Government promotion in 1970s
  • Industry promotion in 1990s

45
Types of MC organization
  • Closed Panel (or staff model) Health Maintenance
    Organizations (HMOs)
  • Employee physicians provide services
  • Group model variant MD groups
  • Preferred Provider Organizations
  • Physician list, free or discount
  • Independent Practice Associations
  • Per member per month, network without walls,
    gate-keeping

46
Common MC elements
  • Assignment to a primary care provider
  • Restrictive formularies for medicine
  • Limited providers for hospitalization
  • Preventive and patient education services
  • MD incentives for cost-effective care
  • Utilization review

47
Thoughts.
48
Managed care and you.
  • The essential element of a successful PPO or IPA
    is an ability to identify accurately efficient
    health-care providers who provide quality care at
    reasonable rates
  • In the search to save money, physicians are a
    prime target

Gottleib Einhorn 1997
49
Moral hazard, revisited
  • To attract and retain physicians who are willing
    to practice in what the plans deem a
    cost-effective manner, many plans offer
    opportunities to physicians for stock options or
    bonus payments, or both.
  • Incentives to delay/deny care

Gottleib Einhorn 1997
50
The current market
  • Conventional, isnt

Conventional
HMO
POS
employees covered by each type of coverage
PPO
51
The impossible triad
Quality
Access
Cost
52
Other options
  • National Health Service
  • UK model
  • National Health Insurance
  • Canadian model

53
Looking North
  • United States
  • Private
  • Mixed not everything
  • Need insurance copay
  • Mixed
  • Per patient
  • Feature
  • Delivery
  • Coverage
  • Access
  • Physicians
  • Hospitals

Canada Private Everyone, everything No
barrier Fee schedule Prospective global budget
54
Global budget
  • How much is the system going to spend for care?
  • More internal freedom
  • No need to run up charges

55
Canada hasnt controlled cost growth.
Health Care expenditures as GDP
56
But they are happier
  • In 1990, most Americans wanted change
  • At the same time, most Canadians were happy

57
A more recent survey
Kellogg Fndn, 1999
58
Wrapping up
  • We spend a lot of money on health care
  • Aging population
  • Technology
  • We live in interesting times
  • Fee for service
  • Managed care
  • Various options are possible

59
The future is clouded
  • Legislative sniping at managed care
  • Problems of equity
  • Medicaid
  • Uninsured

60
Advice for the future
  • Utilization review and other types of profiling
    will profoundly affect practice
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