heco u5 - health finance
TRANSCRIPT
refers to a system that pays even first peso/dollar health care costs on a collective basis via employer or government funding
creates its own set of incentives for patients and providers
reduce the cost of such a system is to lower down payments to providers –
adverse on the quality of service provided
ratio the amount of healthcare available to patients
MODES OF HEALTH FINANCING
Government National Local
Social Insurance
Medicare Employees’
Compensation
Private Sources
Out-of-Pocket Private insurance HMOs Employer-Based
Plans Private Schools
Others
Alternative Methods of Healthcare Financing in The Philippines
Identify the major providers of health services and role played by the government (the major or sole provider of health services)
Supported mainly from taxes & revenues of the government
Some form of compulsory
State-supported community managed co-operatives
The provider of health services are private individuals and private organizations with government playing a coordinating or regulatory only on certain special services
Through user charges Through insurance
benefits of the service accrue directly to the user
consumers are willing and able to pay on a fee-for-service basis
particularly suited for those aspects of health care that are considered private goods
Different Modes of Private Health Financing
is most appropriate for those aspects of healthcare benefits which are widely spread and therefore not quite amenable to any system of user charges
has been demonstrated to be effective not only to mobilizing resources for healthcare, but also evoking improved health consciousness among community and stimulating collective action to achieve common health goals
Simply taking out your wallet and paying for the health goods and services that you utilize
Examples: Doctor’s consultation, medicines from the pharmacy, diagnostic procedure
The most dominant mode of private health financing
Advantages of Out-of-Pocket Minimum cost Merely depend on the primary care physician who
attend for your treatment and healthcare institution where you have been admitted
The shorter you treated the lower the payment
No “gatekeeper” for non-network care If you prefer to go outside the network for
treatment, you are free to see any doctors or choose without first consulting your primary care physician
Disadvantages of Out-of-Pocket High-out-of-pocket costs Less coverage for treatment
provided by physician No freedom of choice
bought by individuals for themselves or their families
maybe also be bought by employers as medical benefits for their employees
Insurance Company
CONSUMEER
GovernmentHospital
PrivateHospital
MedicalSpecialists
General Practice
Physician
Pharmacy
Laboratory
TYPICAL SET STRUCTURE OF AN INSURANCE SETUP
is term used to described any number of contractual arrangement that integrates the financing and delivery of medical care
Purchasers (employers) contract with a select group of providers to deliver a specific package of medical benefits at predetermined price
The Theory Of Managed care Cost saving
The medical care costs and spending may be affected by changing
Patient utilization Physician’s practice styles Introduction of new technology
Managed care Provider side provisions
1. Selection of Providers Managed care limits the patients
choice of provider for a given medical care
Limits include the1. Use of gatekeeper2. Close panels3. Preferred providers
GATEKEEPER Is a physician responsible for providing
all primary medical care and coordinating access to high cost hospital and specialty care
Patients who wish to see specialist must first get a referral from the gatekeeper
CLOSE PANEL A designated network of
providers that serve the recipient of health care plan
Patients are not allowed to choose a provider outside the network
PREFERRED PROVIDER Allows the patient to choose a
provider who is not a part of the panel
Patients who use physician who are not part of the panel usually pay higher coinsurance rates
Further discouraging off-panel utilization
ANY WILLING PROVIDER A situation in which a managed
care organization allows any medical provider to become part of the network of providers for the covered group
Often, state law will require this practice
2. Cost Sharing Arrangement MC utilizes various reimbursement
schemes with common goal of shifting some of the financial risk to providers
Shifting risk discourages over Utilization of services Primarily the use of expensive
technology Prescription drugs Referrals to specialist In patient hospital procedures
2. Cost Sharing Arrangement Primary Physician receive fixed payment Determined in advance to provide all
medically necessary primary care for specific group of patients
It control utilization and cost Subject to strict budgets for hospital
services, specialty referrals, and Rx drugs
Primary Physician who provide care within predetermine budgets receive bonuses
3. Practice Guidelines and Utilization Review
Directly control clinical decisions Encourage providers to evaluate the
marginal benefit of prescribed care more carefully
Determine the relative efficacy of treatment options and in turn their cost effectiveness
Techniques for controlling utilization in hospital
1. Pre admission review Establishes the appropriateness
of a procedure Either the admitting physician
or the patient must receive approval prior to the hospital admission
Techniques for controlling utilization in hospital
2. Concurrent Review Utilizes established guidelines to
determine whether a hospital stay should be continued
Techniques for controlling utilization in hospital
3. Retrospective review Examines the appropriateness of
care after it has been completed In addition, second surgical opinions
and case management are used to control costs associated with surgery
Case Management A method of coordinating the
provision of medical care for patients with specific high-cost diagnoses such as cancer and heart disease
Premium100
HMO13 Admin Overhead
General Practitioner14 minus withhold
Withhold[Percent of Capitation]
Pharmacy Budget10
Hospital Budget38
Specialty Budget25
Bonus PoolSurplus/Deficit
HMO Share of Bonus Pool Surplus
HMO Share of Bonus Pool Deficit
Physician Share of Bonus Pool Surplus
Physician Share of Bonus Pool Deficit after Withhold
Withhold Surplus
Deficit Offset
After Offset
Bonus Pool Surplus Bonus Pool Deficit
Third Party Transactions What does the 3 parties in an
insurance contracting network gain?
1. Patients Gain by pooling risks to eliminate
financial uncertainty and make expensive treatments affordable
2. Providers Gain from an increase in demand
and regularity of payment
Third Party Transactions3. Insurance Companies Benefit from profits Even when the underwriting gains (the
difference between premium paid in and benefits paid out plus administrative costs) are negative, an apparent loss, companies may still make money because they will hold the premium for six to 24 months before paying out benefits
Insurance,GovernmentManage care
PATIENTS,PUBLIC
HOSPITALS,DOCTORS
Medical care services
MONEY
REGULATIONS
ReimbursementPREMIUM
THIRD PARTY CONTRACTING
Who Pays? And How Much? There is a popular misconception when
insurance pays for something, IT IS FREE
We may not realize who pays because third party transactions are INDIRECT
Every peso spent on medical care is paid by YOU, or by ME, by SOMEONE just like us
Individuals pay for medical care by paying taxes
There are no free lunches
Managed care Plans The difference between traditional
indemnity insurance and managed care is that a manager intervenes to monitor and control the transaction between doctor and patient
The management company acts as patient’s agent, trying to get better care and lower prices
The manager examines the process of care and controls the flow of funds, facilitating payment in some circumstances and holding back in others
INSURANCE
PATIENTS PROVIDERS
MANAGER
FLOW OF FUNDS WITH MANAGED CARE
HMOs – Health Maintenance Organizations
PPOs – Preferred Provider Organizations
POS – Point-of-service Plans
Health Insurance
Involvement of Private sector
is an offshoots of health insurancecontrol over the use of healthcare
benefits and are therefore able to make utilization of health goods and services more cost effective
comprehensive healthcare program through a “package benefits”
prevent plan holders from having direct links with the providers in hospitals and clinics
Is one type of managed care service that provides healthcare to members for a fixed, usually monthly payment
Organizations can be either nonprofit or profit
Are very active on the prevention side of medicine. Because of their emphasis on disease prevention, disease risk reduction and self care by the patient
CONSUMERS
Health Maintenance Organization
Package of Benefits
MedicalClaims:
“Actuarial Risk”
Medical Specialist
GeneralPractice
Physician
Government Facility
PrivateFacility
consumers will have to “pass through”the system of the HMO to be able to get the providers
HMOs will then choose the most cost effective healthcare provider
HMOs are able to control the costs of medical claims
by limiting the probability of getting ill by covering only a list of illnesses with specific limitations
by controlling the costs of getting ill by forging contracts with providers and making them part of the HMO setup, providers
Package of Benefits
Annual Physical Examination
Out-patient benefits, mainly consultation but NOT medication
Preventive care, well baby visits (cost of vaccines not included)
In-patient coverage, hospitalization including professional fees, laboratory, medications, surgery if needed)
Emergency coverage
Dental, tooth extraction, prophylaxis, and cleaning
Maternal Benefits, seen only in group plans
Executive checkup
Insurance benefits
Types of HMOs1. Group Model
A group of physician, often a large multi specialty group practice, that agrees to provide medical care to a defined patient group in return for a fixed per capita fee or for discount fees
Types of HMOs2. Staff Model
Physicians are employees of the HMO
Their incomes are usually paid in the form of a fixed salary but may include supplemental payments based on some measure of performance
Types of HMOs3. Network Model
A managed care organization that contracts with several different providers, including physicians’ practices and hospitals, in order to make a full range of medical services available to its enrollees
Types of HMOs 4.Independent Practice Association
(IPA)
An organized group of health care providers that offers medical services to a specified group of enrollees of health plan
Types of HMOs5. Direct Contract Model
A managed care organization that establishes contractual relationship with individual physicians to provide care for a specific group of patients
Advantages of HMOs1.Low out-of-pocket costs
With most type of insurance, patient are responsible for paying a percentage of the bill every time receives medical care
HMO members pay a fixed monthly fee, regardless how much care is needed in a given month. Instead of deductibles, HMOs often have nominal co-payment
Advantages of HMOs
2.Focus on wellness and preventive care
By reducing out-of-pocket costs and paperwork, HMOs encourage members to seek medical treatment early, before health problems become severe
Additionally, many HMOs offer health education discounted health club memberships
Advantages of HMOs3.Typically no lifetime maximum pay out
HMOs generally do not place a limit on your lifetime benefit
HMOs will continue to cover your treatments as long as you are a member
Disadvantages of HMOs1. Tight controls can make it more difficult to get
specialized care
HMO member, you must choose a PCP
Your PCP provides medical care and must be consulted before seeking care from another physician
Screening helps to reduce costs both HMO and members, but it can allow complications if the PCP does not provide the referral you need
Disadvantages of HMOs
2.Care from non-HMO provide generally not covered
Except for emergency occurring outside the HMO treatment area
HMO members are required to all treatment from HMO physicians
HMO will not pay non-emergency care provided by the physician
Additionally, there may be a strict definition of what constitutes an emergency
Health packages that companies administer for the medical benefits of their employees
Examples: Meralco put up its own hospital for its
employees PAL has both an upscale medical facility
and hospital referral system PLDT follows hospital referral system
required to put up clinics and set budgets for the healthcare needs of their students
manned by health officers, usually doctors or school nurses
all expenses or budgets for these are reflected in the “private schools” segment.
serves as intermediary or broker between the purchaser of medical care and the provider
Establishes a network of providers who agree to provide medical services to a specific group of enrollees at discounted rates
risk sharing – more complex and structure form of health financing based on system
Collective savings as means of protecting members from the catastrophic cost of an unpredictable event such as serious illness or injury
Hybrid MC plan that combines the features of a prepaid plan and a fee-for-service plan
Enrollees use network physicians with minimal out-of-pocket expenses and may choose to go out of the network by paying a higher coinsurance rate
Company financed health benefits for employees and dependents
Sponsorship of medical bills of needy patient – philanthropies societies, individuals and groups
Spontaneous or inspired public donations – disaster victims
Special lotteries to raise funds to support the medical operation
Health Insurance: Some Considerations
If your country already had health insurance
Does it include prevention? Is it built on primary health care principles? Does it promote equity or create privilege? What say has the DOH about its resources
and how it uses them? What would it cost to give the uninsured
the same services as the insured? How could health insurance be adapted to
conform better health for all objectives?
Health Insurance: Some Considerations
If your country already has no health insurance
Whom could it cover? (what proportion of the population is made up of people in regular employment and their dependents?)
Is there a social security scheme on which it could be built (e.G. occupational injury, provident fund)?
What could the insured be offered for their contributions without undermining health-for-all goals?
Services and benefits offered by GSIS
Retirement
Loan Privileges Benefit
Life Insurance Benefit
Claims Settlement
Additional Social Security Benefits
Other GSIS Programs
Laws Governing General Insurance
P.D. 245 - renamed General Insurance Fund
R.A. 656 – Property Insurance Fund
Section 11, Article XIII of the 1987 Constitution of the Republic of the
Philippines Declares that the state shall adopt an
integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all people at affordable costs…….
Example: NHIP refers to a compulsory health insurance program of the government (RA 7875)
Shall provide universal health insurance coverage and ensure affordable, acceptable, available and accessible health care services for all citizens of the Philippines
NHIP shall adopt the following guidelines The NHIP shall underscore the
importance for government to give priority to health as a strategy for bringing about faster economic development and improving quality of life
The NHIP shall provide all citizens with the mechanism to gain financial access to health services, in combination with other government health programs
NHIP shall adopt the following guidelines The NHIP shall give highest priority to
achieving coverage of the entire population with at least a basic minimum package of health insurance benefits
The NHIP shall adequately meet the needs for personal health services at various stages of a member’s life.
General Lines Offered Fire and Special Risks Motor vehicle Property Floater Marine Hull Marine Cargo Aviation Hull and Liability Aviation Cargo Engineering Personal accident Surety ship Miscellaneous
Inpatient Hospital Care
Room and board Services of health
care professionals Diagnostic,
laboratory, and other medical examination services
Prescription drugs and biologicals, subject to the limitations
Inpatient education packages
Outpatient Care Services of health
care professionals Diagnostic,
laboratory, and other medical examination services
Personal preventive services
Prescription drugs and biological, subject to the limitations described in Section 37 of RA 7875
Emergency and transfer services
RA 7875
An act instituting a national Health Insurance program for all Filipinos and establishing the Philippine Health Insurance Corporation for the purpose
Allocation of National Resources for Health
Universality Equity Responsiveness Social Solidarity Effectiveness Innovation Public services Quality of services Cost containment
Devolution Fiduciary
Responsibility Informed Choice Maximum Community
Participation Compulsory
Coverage Cost sharing Professional
Responsibility of Health Care Providers
Care for the indigent