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Chapter 1

A Distinctive System of Health

Care Delivery

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Class Objectives

At the end of the class, you should: Understand the basic nature of the US

health care system

!e able to outline the four "ey componentsof the health care delivery system

Discuss the primary characteristics of the

US health care system

Have an overvie# of health care systems inother countries

Understand the systems model as applied

to health care delivery

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orHealth Services Delivery

System !roadly De%ned: major components of the system and

processes that enable people to receive

health care

&estricted de%nition: the act of providin' health care to

patients (ie in a hospital or aphysician)s clinic*

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+rimary Objectivesof a Health Care System

1 $o enable all citiens to receivehealth care services

- $o deliver services that are cost.e/ective and meet establishedstandards of 0uality

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$he US Health Care System

$he health care #or"force employs

approimately 12 million people 3--,444 active 5Ds (doctors of medicine*

64,734 DO)s (osteopathic physicians* -8 million nurses

8,318 hospitals

18,694 nursin' homes

1,191 health centers 944 medical, dental and pharmacy schools

1,844 nursin' pro'rams

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$he US Health CareSystem 5ore numbers:

-44; million Americans #ith privateinsurance

79 million 5edicare bene%ciaries 7-2 million 5edicaid recipients 729 million (187

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: W at are some wayspeople receive private

insurance? =mployers Self

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>inancin' and ?nsurance

5echanisms

=mployer.based health insurance (private*

+rivately.purchased health insurance (private*

@overnment pro'rams (public* State =mployees @roup

employees

5edicare

elderly and certain disabled people 5edicaid and CH?+

indi'ent, poor (if they meet the eli'ibility criteria*,

children

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$he US Health Care System

Leads the world in:

medicaltechnolo'y

medical trainin'

research

sophisticated institutions

products

processes

But fails in:

coordination

cost containment as a#hole

$he amount of duplication

overlap

inade0uacy

inconsistency

#aste compleity

ineciency

%nancial manipulation

fra'mentation

$ Ch i i h

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$en Characteristics thatDi/erentiate

the US Health Care System1Bo central a'ency 'overns a system-Access is selective based on insurance

9Health care o/ered under imperfect mar"et activity

7$hird party insurers are intermediaries bet#een

%nance and delivery

85ultiple payers are cumbersome

2!alance of po#er, no domination

6e'al ris" a/ects practice behavior

3Be# technolo'y creates demand for its use

;Be# service settin's alon' a continuum

14uality is achievable

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$ Ch t i ti th t

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the US Health Care System1* Bo Central A'ency 5ost developed nations have a national health care

pro'ram #here every citien is entitledto receive a

set of service

$o control costs, use 'lobal bud'et to determinetotal health care epenses

Government usually controls frequency of

health care services, especially expensive

medical technology use$he US has mostly private %nancin' and delivery

rivate !nancing through employers at ""#

and government at $"#

$ Ch t i ti th t

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the US Health Care System1* Bo Central A'ency +rivate health care, hospitals, physicians are independent

of 'overnment

%o one monitors total expenses through glo&al

&udgets and utili'ation US does determine public.sector epenses and

reimbursement rates for 5edicare and 5edicaid

@overnment sets standards of participation throu'h policy

and re'ulations providers must comply with standards to &e

certi!ed to provide (edicaid ) (edicare patients

re'arded as minimum standards of 0uality

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Q: What is access?

Access: the ability to obtain health care#hen needed

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>our >actors that A/ectAccess Ability to pay

do you have health insuranceE

Availability of services (delivery* rural and remote areas lac" ade0uate

services

+ayment many providers don)t accept 5edicaid

=nablement barriers transportation, racial, cultural and

lan'ua'e barriers

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Access to Health Care

Fey predictors of access: >inancin' and insurance

Delivery and payment

indirectly

$ Ch t i ti th t

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-* +artial access Universal access: Health care is available

to all citiens

?n US, access restricted to those #ho:a* have health insurance throu'h an

employerb* are covered under a 'overnment

health care planc* can a/ord to buy insurance out of

poc"etd* can pay at time of service privately

Health insurance helps ensure access


the US Health Care System

$ Ch t i ti th t

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-* +artial access$hose unable to pay #ait until a health problem

arises then receive health care at the

emergency room hospital does not receive payment

a form of catastrophic health care insuranceE

+rimary Care: basic and routine care

Lac* of access to prim care a &ig reasonfor +-. lag in population health /ie

infant mortality, life expectancy0



$ Ch t i ti th t

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9* ?mperfect 5ar"et

?n national health care, economic mar"ets do not

eist US has a 0uasi.mar"et #here health care is partially

mana'ed by free mar"ets

patients (buyers* and providers (sellers* act independently

prices set by interaction of supply and demand

unrestrained competition on basis of price and 0uality

patients must have info of availability of di/erent services

(technolo'y too complicated, s"ills too advanced* patients have info on price and 0uality on each provider

patients must bear cost of services received

patients ma"e decisions about the purchase of health care services



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9* ?mperfect 5ar"et ?tem pricin'

obtain fees char'ed for service (sur'eon)s

price*

services can)t be determined prior to procedure

+ac"a'e pricin' bundled fee for a 'roup of related services

Capitation all health care services include one set

fee per person, more all1encompassing

Characteristics that

Di/erentiate


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$en Characteristics that

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+hantom providers bill for services separately

anesthesiolo'y, patholo'ist, supplies, hospital

facility use Supplierprovider.induced demand

hysicians have in2uence on creatingdemand for their !nancial &ene!t

+hysicians receive care beyond #hat isnecessary (ie follo#.up visits, tests, unnecessary sur'ery*




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7* $hird.+arty ?nsurers and +ayers atient is !rst party

rovider is second party

3ntermediary is third party/insurance company and otherpayers0

a #all of separation bet#een %nancin'and delivery

0uality of care is a secondary concern




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8* 5ultiple +ayers

$he US has many payers,company can choose di/erent

plans a billin' and collection ni'htmare

system becomes more cumbersome

Sin'le.payer system a national health care system that is

usually the primary payer.'overnment




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2* +o#er !alancin'5ultiple +layers

+hysicians, administration, insurance, 'overnment,employers

>ra'mented self.interests prevents an entity from dominatin'

6* e'al &is"s

$he US is a liti'ious society

+ractioners en'a'e in defensive medicine prescribe dia'nostic tests, return chec"ups, documentation

3* Hi'h $echnolo'y$he US, a hotbed of research and innovations

Creates demand for ne# services despite hi'h costs

Gith capital investments, must have utiliation

e'al ris"s for providers denyin' ne# technolo'y



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Q: What are some types of4ealth services?

+reventative care

+rimary care

Specialied care

Chronic care

on'.term care

Subacute care

Acute care &ehabilitative care

=nd.of.life care


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;* Continuum of Services 5edical services has three broad

cate'ories:

curative restorative preventative

Health care is not con%ned to the

hospital14* uest for uality

Continuous uality ?mprovement Hi'her epectations

uality standards #ith compliance



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@overnment)s &oles in the USHealth Service System

5ajor %nancier of health caredelivery

Determine reimbursement rates toproviders #ho render 5edicare 5edicaid services

&e'ulates throu'h licensin'

personnel and health careestablishments

Health policy

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5ajor +layers in the US HealthService System

Gho does these functionsE +hysicians Administrators

?nsurance eecutives ar'e employers @overnment See %'ure 1.1, pa'e 2

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A Disenfranchised Se'ment

?n the US, insurance is employer.based the unemployed usually have no insurance

=ven if employed, employees do not haveinsurance because:1* =mployers not mandated to o/er insurance

premium cost sharin' rarely paid at 144< if at all bene%t: 'roup rate or availability of insurance

-* +articipation in health insurance is voluntary

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Q: Why 5re eople +ninsured?

Unemployed

=mployers not re0uired to o/er healthinsurance

=mployees not re0uired to buy healthinsurance

Don)t %t eli'ibility of 'overnmentpro'rams

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$raditional ?nsurance to 5ana'edCare

Utiliation (determined by*: the 0uantity of health care consumed

+reviously determined by individuals and physicians

5ana'ed Care

Controls utiliation of medical services and price #hereservices are purchased

Determine price for services purchased and ho# muchproviders 'et paid

Costs mana'ed by controllin' utiliation

+lan under#rites ris" &is" sets premium

+lan pays providers throu'h capitation and discounts

Delivery mostly throu'h contracts #ith eternal providers

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$raditional ?nsurance to 5ana'edCare

>ee arran'ements ne'otiated throu'h contract

#ith providers, based on either:

Capitation payment #here all health care services include under

one set fee per person

predetermined %ed payment per member per

month (+5+5*

used primarily by Health 5aintenance Or'aniations

Discounts a'ainst providers) customary fees

used primarily by +referred +rovider Or'aniations

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$he move to national Health Care+ro'rams

$heoretically, no one is uninsured

Universal access: is mana'ed by the 'overnment

provides a de%ned set of health careservices to all citiens

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Cost Control inBational Health Care +ro'rams

@lobal bud'ets determine the national health care

ependitures

Health care resources are allocatedin the bud'etary: availability and dissemination of service

and technolo'y reimbursement levels

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happ 100 chapter 1 (1)

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