Do you know about - Who's Paying For health Care?
Kaiser Permanente Oregon! Again, for I know. Ready to share new things that are useful. You and your friends.America spent 17.3% of its gross domestic goods on condition care in 2009 (1). If you break that down on an individual level, we spend ,129 per man each year on condition care...more than any other country in the world (2). With 17 cents of every dollar Americans spent holding our country healthy, it's no wonder the government is determined to reform the system. Despite the fantastic attentiveness condition care is getting in the media, we know very diminutive about where that money comes from or how it makes its way into the principles (and rightfully so...the way we pay for condition care is insanely complex, to say the least). This convoluted principles is the unfortunate succeed of a series of programs that exertion to control spending layered on top of one another. What follows is a systematic exertion to peel away those layers, helping you become an informed condition care buyer and an incontrovertible debater when discussing "Health Care Reform."
What I said. It isn't outcome that the actual about Kaiser Permanente Oregon. You see this article for info on anyone wish to know is Kaiser Permanente Oregon.How is Who's Paying For health Care?
Who's paying the bill?
The "bill payers" fall into three certain buckets: individuals paying out-of-pocket, incommunicable insurance companies, and the government. We can look at these payors in two distinct ways: 1) How much do they pay and 2) How many people do they pay for?
The majority of individuals in America are insured by incommunicable insurance companies via their employers, followed second by the government. These two sources of cost combined account for close to 80% of the funding for condition care. The "Out-of-Pocket" payers fall into the uninsured as they have chosen to carry the risk of medical price independently. When we look at the number of money each of these groups spends on condition care annually, the pie shifts dramatically.
The government currently pays for 46% of national condition care expenditures. How is that possible? This will make much more sense when we recognize each of the payors individually.
Understanding the Payors
Out-of-Pocket
A adopt quantum of the people chooses to carry the risk of medical expenses themselves rather than buying into an insurance plan. This group tends to be younger and healthier than insured patients and, as such, accesses medical care much less frequently. Because this group has to pay for all incurred costs, they also tend to be much more discriminating in how they way the system. The succeed is that patients (now more appropriately termed "consumers") comparison shop for tests and optional procedures and wait longer before seeking medical attention. The cost recipe for this group is simple: the doctors and hospitals fee set fees for their services and the inpatient pays that number directly to the doctor/hospital.
Private Insurance
This is where the whole principles gets a lot more complicated. incommunicable insurance is purchased whether individually or is provided by employers (most people get it straight through their employer as we mentioned). When it comes to incommunicable insurance, there are two main types: Fee-for-Service insurers and Managed Care insurers. These two groups arrival paying for care very differently.
Fee-for-Service:
This group makes it relatively simple (believe it or not). The employer or individual buys a condition plan from a incommunicable insurance company with a defined set of benefits. This benefit box will also have what is called a deductible (an number the patient/individual must pay for their condition care services before their insurance pays anything). Once the deductible number is met, the condition plan pays the fees for services provided throughout the condition care system. Often, they will pay a maximum fee for a service (say 0 for an x-ray). The plan will need the individual to pay a copayment (a sharing of the cost between the condition plan and the individual). A typical commerce proper is an 80/20 split of the payment, so in the case of the 0 x-ray, the condition plan would pay and the inpatient would pay ...remember those annoying medical bills stating your insurance did not cover all the charges? This is where they come from. Other downside of this model is that condition care providers are both financially incentivized and legally bound to achieve more tests and procedures as they are paid additional fees for each of these or are held legally accountable for not ordering the tests when things go wrong (called "Cya or "Cover You're A**" medicine). If ordering more tests provided you with more legal security and more compensation, wouldn't you order whatever justifiable? Can we say misalignment of incentives?
Managed Care:
Now it gets crazy. Managed care insurers pay for care while also "managing" the care they pay for (very clever name, right). Managed care is defined as "a set of techniques used by or on behalf of purchasers of condition care benefits to administrate condition care costs by influencing inpatient care decision making straight through case-by-case assessments of the appropriateness of care prior to its provision" (2). Yep, insurers make medical decisions on your behalf (sound as scary to you as it does to us?). The traditional idea was driven by a desire by employers, insurance companies, and the group to control soaring condition care costs. Doesn't seem to be working quite yet. Managed care groups whether contribute medical care directly or covenant with a adopt group of condition care providers. These insurers are additional subdivided based on their own personal supervision styles. You may be customary with many of these sub-types as you've had to choose between then when selecting your insurance.
Preferred supplier organization (Ppo) / Exclusive supplier organization (Epo):This is the closet managed care gets to the Fee-for-Service model with many of the same characteristics as a Fee-for-Service plan like deductibles and copayments. Ppo's & Epo's covenant with a set list of providers (we're all customary with these lists) with whom they have negotiated set (read discounted) fees for care. Yes, individual doctors have to fee less for their services if they want to see patients with these insurance plans. An Epo has a smaller and more strictly regulated list of physicians than a Ppo but are otherwise the same. Ppo's control costs by requiring preauthorization for many services and second opinions for major procedures. All of this aside, many consumers feel that they have the greatest number of autonomy and flexibility with Ppo's. Health supervision organization (Hmo): Hmo's consolidate insurance with condition care delivery. This model will not have deductibles but will have copayments. In an Hmo, the organization hires doctors to contribute care and whether builds its own hospital or contracts for the services of a hospital within the community. In this model the doctor works for the insurance supplier directly (aka a Staff Model Hmo). Kaiser Permanente is an example of a very large Hmo that we've heard mentioned often while the recent debates. Since the company paying the bill is also providing the care, Hmo's heavily emphasize preventive rehabilitation and traditional care (enter the Kaiser "Thrive" campaign). The healthier you are, the more money the Hmo saves. The Hmo's emphasis on holding patients wholesome is commendable as this is the only model to do so, however, with complex, lifelong, or advanced diseases, they are incentivized to contribute the minimum number of care essential to sacrifice costs. It is with these conditions that we hear the horror stories of insufficient care. This being said, physicians in Hmo settings continue to convention rehabilitation as they feel is needed to best care for their patients despite the incentives to sacrifice costs possible in the principles (recall that physicians are often salaried in Hmo's and have no incentive to order more or less tests).
The Government
The U.S. Government pays for condition care in a collection of ways depending on whom they are paying for. The government, straight through a number of distinct programs, provides insurance to individuals over 65 years of age, people of any age with permanent kidney failure, certain disabled people under 65, the military, troops veterans, federal employees, children of low-income families, and, most interestingly, prisoners. It also has the same characteristics as a Fee-for-Service plan, with deductibles and copayments. As you would imagine, the majority of these populations are very costly to cover medically. While the government only insures 28% of the American population, they are paying for 46% of all care provided. The populations covered by the government are amongst the sickest and most medically needy in America resulting in this dissimilarity between number of individuals insured and cost of care.
The largest and most customary government programs are Medicare and Medicaid. Let's take a look at these individually:
Medicare:
The Medicare agenda currently covers 42.5 million Americans. To qualify for Medicare you must meet one of the following criteria:
Over 65 years of age Permanent kidney failure Meet certain disability requirements
So you meet the criteria...what do you get? Medicare comes in 4 parts (Part A-D), some of which are free and some of which you have to pay for. You've probably heard of the various parts over the years thanks to Cnn (remember the commotion about the Part D drug benefits while the Bush administration?) but we'll give you a quick refresher just in case.
Part A (Hospital Insurance): This part of Medicare is free and covers any inpatient and inpatient hospital care the inpatient may need (only for a set number of days, however, with the added bonus of copayments and deductibles...apparently there for real is no such thing as a free lunch). Part B (Medical Insurance): This part, which you must purchase, covers physicians' services, and superior other condition care services and supplies that are not covered by Part A. What does it cost? The Part B superior for 2009 ranged from .40 to 8.30 per month depending on your household income. Part C (Managed Care): This part, called Medicare Advantage, is a incommunicable insurance plan that provides all of the coverage provided in Parts A and B and must cover medically essential services. Part C replaces Parts A & B. All incommunicable insurers that want to contribute Part C coverage must meet certain criteria set forth by the government. Your care will also be managed much like the Hmo plans previously discussed. Part D (Prescription Drug Plans): Part D covers designate drugs and costs to per month for those who chose to enroll.
Ok, now how does Medicare pay for everything? Hospitals are paid predetermined amounts of money per admission or per inpatient course for services provided to Medicare patients. These predetermined amounts are based upon over 470 diagnosis-related groups (Drgs) or Ambulatory cost Classifications (Apc's) rather than the actual cost of the care rendered (interesting way to peg hospital reimbursement...especially when the Harvard economist who advanced the Drg principles openly disagrees with its use for this purpose). The cherry on top of the irrational repayment principles is that the number of money assigned to each Drg is not the same for each hospital. Totally logical (can you sense our sarcasm?). The figure is based on a recipe that takes into account the type of service, the type of hospital, and the location of the hospital. This may sound logical but often times this principles fails.
Medicaid:
Medicaid is a jointly funded (funded by both federal and state governments) condition insurance agenda for low-income families. Eligibility rules vary from state to state and factors in age, pregnancy, disability, earnings and resources. Poverty alone does not qualify an individual for Medicaid (there is currently no government-provided insurance for the American poor...despite the fact that roughly all first world countries have such a system...enter the current condition care debate) but is a essential factor in Medicaid eligibility. Each state operates its own Medicaid agenda but must bond to certain federal guidelines to receive matching federal funds (you may be customary with California's MediCal, Massachusetts' MassHealth and Oregon's Oregon condition Plan due to their recent media coverage). Medicaid payments currently aid nearly 60 percent of all nursing home residents and about 37 percent of all childbirths in the United States.
How are the bills paid?
We now understand who is paying the bill but we have yet to cover how those bills are paid. There are two broad divisions of arrangements for paying for and delivering condition care: fee-for-service care and prepaid care.
Fee-for-Service
As we mentioned briefly while discussing Ppo's, in a fee-for-service structure, consumers adopt a provider, receive care (a.k.a. "service") from the provider, and incur expenses (a.k.a. "a fee") for the care. Deductibles and copayments are also required as previously discussed. Pretty simple. The doctor is then reimbursed for their services in part by the insurer (i.e. A incommunicable insurance company or the government) and in part by the patient, who is responsible for the equilibrium unpaid by the insurer (the return of the unanticipated medical bill despite your overpriced insurance). Again, the major downfall of the fee-for-service arrival is that medical professionals are incentivized to contribute services (and by this we mean any and all services they can legally ask or must ask to be protected legally), some of which may be nonessential, to increase their earnings and/or "C.Y.A." (revenue that has steadily decreased as insurance companies continue to lower the number they pay medical professionals for their services).
Fee Schedule
A fee agenda operates in the same way that Fee-for-Service does with one exception: instead of using the "usual, customary, and reasonable" number to reimburse medical professionals, states set fees to be paid for exact procedures and services. The repayment is very low ($.10-.15 on the dollar) and barely covers the actual direct cost of providing the care. Physicians may chose to opt into the plan or not (starting to see why a doctor might not be so excited about this plan?). Would you sign up to be paid 10 cents for every dollar you expensed for your work? Try the insurance repayment arrival next time you go out to eat. We'll come bail you out of the Big House if things go awry. What happens when the insurance principles does this? You get the Wal-Mart arrival to rehabilitation (high volume, low quality). Not the kind of heath care we recommend.
Pre-Paid
Pre-paid condition care? Like a phone card? Not exactly--but close. The pre-paid principles evolved out of the insurance company's desire to share its risk ( a.k.a "pooled risk") with condition care providers. Essentially, they wanted the doctors to have some skin in the game. In the pre-paid system, insurers make arrangements with condition care providers to contribute agreed-upon covered condition care services to a given people of consumers for a (usually discounted) set price-the per-person superior fee-over a singular time period. What does that mean? It means that Dr. Bob gets paid, say, per month to take care of Joe the Plumber together with his blood work and x-rays. If Dr. Bob spends less than that caring for Joe, he makes money. If Joe is sick every month and needs lots of tests and follow-up visits, Dr. Bob could lose money caring for Joe. The set monthly fee paid to the doctor for taking care of a inpatient is set up on a per-member, per-month (Pmpm) rate called a "capitated fee." The supplier receives the capitated fee per enrollee regardless of whether the enrollee uses condition care services and regardless of the ability of services provided (not a good thing in our book). Theoretically, providers should become more prudent and subsequently contribute services in a more cost efficient manner because they are bearing some of the risk. Often times, however, less care is provided than is needed in hopes of recovery money and expanding profits. In addition, physicians are incentivized to cherry pick the youngest and healthiest patients because these patients typically need less care (i.e. They are economy to keep healthy). We like that doctors are encouraged to keep patients wholesome but we have to worry about the ways in which they are being encouraged to sacrifice costs (as diminutive care as possible?). Again, the incentive principles falls short and encourages providers to act unethically.
The Take Home Message:
Health Care in the United States today is complicated and messy at best. The layers on top of layers of failed attempts to definite the principles continue to encourage the wrong behavior in both patients (out of fear of medical bills) and providers (out of fear of bankruptcy). We have yet to contribute every American people with medical care (something that goes without saying in most 1st World countries...even Cuba has it!). We spend more money on caring for our citizens than any country in the world yet we continue to lag behind in terms of national condition outcomes. We think it's safe to say that we're not getting the best bang for our buck. The ultimate solution? We wish we knew. Only time will tell where the principles goes from here. Our goal: to help you great understand the principles as it stands today in hopes of developing a more effective, efficient, and wide principles for the future. Are you with us?
References
1. Levey N. Soaring cost of healthcare sets a record. Los Angeles Times. Feb 4 2010.
2. McKenzie J, Pinger R, Kotecki J. An Introduction to community Health, 6th Ed. Jones and Bartlett Publishers. 2008.
3. Bodenheimer Ts, Grumbach K. Insight condition Policy. 5th Ed. Lange medical Books/McGraw-Hill. 2002.
4. Kaiser family Foundation. "Explaining condition Care Reform: How Do condition Care Costs Vary By Region?" Brief #8030. December 2009.
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