Transcript US Healthcare Financing Developed through the APTR Initiative to Enhance Prevention and Population Health Education in collaboration with the Brody School of.

US Healthcare Financing
Developed through the APTR Initiative to Enhance Prevention and Population
Health Education in collaboration with the Brody School of Medicine at East
Carolina University with funding from the Centers for Disease Control and
Prevention
APTR wishes to acknowledge the following individuals that
developed this module:

Anna Zendell, PhD, MSW
Center for Public Health Continuing Education
University at Albany School of Public Health

Joseph Nicholas, MD, MPH
University of Rochester School of Medicine

Mary Applegate, MD, MPH
University at Albany School of Public Health

Cheryl Reeves, MS, MLS
Center for Public Health Continuing Education
University at Albany School of Public Health
This education module is made possible through the Centers for Disease Control and Prevention (CDC) and the
Association for Prevention Teaching and Research (APTR) Cooperative Agreement, No. 5U50CD300860. The module
represents the opinions of the author(s) and does not necessarily represent the views of the Centers for Disease
Control and Prevention or the Association for Prevention Teaching and Research.
Describe how clinical services are funded, including
how individuals are covered and how providers are
reimbursed
2. Explain the models of healthcare financing used in
the US system
3. Explain how healthcare reform impacts healthcare
financing
1.
Public
Private
Individual/Family
Coverage
Government
Coverage
Employer or
Self-Insured
Coverage
Health
Insurance
Companies
Uninsured
Healthcare Providers
Outpatient medical, hospital, pharmacy, mental
health, dental
Medicare
Medicaid
SCHIP
VA
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Accelerating healthcare costs promise to swamp
access/quality issues
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Workforce and hospitals are geared to provide
expensive, high-tech, tertiary care for the
foreseeable future
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Aging population living longer with more comorbidities
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Public
 Medicare
 Medicaid
 State Children’s Health Insurance Program (SCHIP)
 Veteran’s Administration benefits
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Private
 Employer-based
 Private purchase
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Provides health care to poor and disabled
 Strict means testing
 Not all poor people covered - under federal law
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Very low reimbursements to providers
 Limited number of participating private providers (e.g.
physicians)
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Federally and state funded
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Provides health insurance to
 All elderly
 Individuals under age 65 with disabilities
Funded through US General Fund and employee
contributions
 Government-determined reimbursement rates
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Medicare
A
Hospital
Medicare
A
Medicare
B
Hospital
Health
Medicare
A
Medicare
B
Medicare
C
Hospital
Health
Advantage
Medicare A
Medicare B
Medicare C
Medicare D
Hospital
Health
Advantage
Prescription
Vision
Dental
Hearing
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Provides health insurance to children whose
families:
 Earn too much to be eligible for Medicaid
 Cannot afford health insurance
Joint federal/state funding with an enhanced match
to states
 Expanded in healthcare reform
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Available to veterans of US military and immediate
families (CHAMPVA)
 Annual caps on # of enrollees
 Multiple plans
 Priority groups
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Must proactively apply
Healthcare access limited to VA facilities
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Primary mode of delivery
Employers provide in benefits package
Premiums split between employer and employee
 Employer usually pays the majority
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Benefits and costs vary widely depending on policy
carrier(s)
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Precipitated by soaring healthcare costs
Efficiency through healthcare delivery integration
 Eliminate duplication, waste, fragmentation
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Utilization control of medical services
Fees for services
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Tax-free account to pay for routine health expenses
Contributions to HSA’s via payroll deductions
Must have health insurance policy to open HSA
Must use entire amount annually
Most HSA reimbursements require a “paper trail”
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Major health insurance companies are engaging
patients in health education to save on treatment
costs and hospitalizations
 Health information
 Chronic disease management
 Caregiver supports
 Preventive health
 Wellness incentives
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Purchased on non-group insurance market
 Very expensive
 Pressure to lower premiums often leads to poor coverage
 Medically underwritten versus guarantee issue
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Regulated by state governments
 www.healthinsuranceinfo.com
for state specific information
Money
Collection
Payers
Provider
Reimbursement
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Insurers may require prior approval for services
 Rehabilitative therapies
 Screening procedures
 Mental health services
 Outpatient procedures
 Inpatient stay
 Certain medications
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Without authorization, services not reimbursed
Varies greatly by insurer
May need to provide continued justification for care
Socialized Medicine
(United Kingdom Model)
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Government is dominant
service payor and provider
Fund through taxes
Universal access
In US, this is model for
Veterans Affairs (VA)
Socialized Insurance
(Bismark Model)
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Private insurance is
dominant payor
Fund via employers and/or
employees
Need additional
mechanisms for universal
access
In US, this is primary model
for citizens <65 years
National Health Insurance
(Canadian Model)
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Government is dominant
payor
Providers, hospitals are a
mix of public/private
Funded through taxes
Universal access
In US, this is the model for
Medicare and Medicaid
Out of Pocket Model
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No organized system for
payment
No pooling of risk
Access limited
In US, this is the model
faced by large numbers of
uninsured
Patient Protection and Affordable Care Act passed in
2010
 Implementation occurs 2010 – 2018
 Mandates health insurance coverage for most
Americans – or face financial penalty
 Provides increased access to public and private
health insurances
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Creation of Health Insurance Exchanges
Establishment of pre-existing condition plans
Expanded small business tax credits
Expanded coverage for young adults
Expanded access to SCHIP, Medicaid, and Medicare
prescription coverage
 Much, much more....
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Insurance/Payment reforms
 Less exclusion, access to larger pools
 Offering less comprehensive benefits/limiting choice
 Shifting more costs to consumers
▪ High deductible plans
▪ Health savings accounts
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Subsidize private insurance
Medicaid eligibility expansion
Funding of community health centers
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Medicare Pay-for-Performance
 Adjusting payments based on hospital and provider specific
process/outcome data
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Patient Centered Medical Home
 Enhanced primary care payments for service coordination
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Payment Bundling
 Global payments to health systems encouraging
coordination of outpatient, inpatient, rehabilitative care
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Comparative effective research
 Coupled with changes in reimbursement for marginally
effective/ineffective treatments
 Attempt to reduce unwarranted variation in care
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Electronic health records
 Ideally would reduce duplicative testing, misinformation
 Allow for data capture to allow evaluation of
providers/hospital systems
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Will eliminate cost-sharing for US Preventive
Services Task Force (USPSTF) recommendations
 Screenings, laboratory tests (e.g. HIV), and routine vaccines
 Smoking cessation and obesity counseling
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Potentially high impact on public health initiatives
 Increased vaccine adherence, smoking cessation and
obesity reduction
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Expansion of access to preventive services
Federal web site to educate Americans on healthcare
reform: www.healthcare.gov
 Kaiser Family Foundation
 The Heritage Foundation
 National Governor’s Association’s Time Line for
Implementation
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The US healthcare financing system is funded both
publicly and privately
The cost of healthcare is a dominant issue
Many people remain uninsured or under-insured
Preventive health is assuming more importance in
healthcare
Major reforms are underway targeting the
healthcare financing system
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Department of Public Health
Brody School of Medicine at East Carolina University
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Department of Community & Family Medicine
Duke University School of Medicine
Mike Barry, CAE
Lorrie Basnight, MD
Nancy Bennett, MD, MS
Ruth Gaare Bernheim, JD, MPH
Amber Berrian, MPH
James Cawley, MPH, PA-C
Jack Dillenberg, DDS, MPH
Kristine Gebbie, RN, DrPH
Asim Jani, MD, MPH, FACP
Denise Koo, MD, MPH
Suzanne Lazorick, MD, MPH
Rika Maeshiro, MD, MPH
Dan Mareck, MD
Steve McCurdy, MD, MPH
Susan M. Meyer, PhD
Sallie Rixey, MD, MEd
Nawraz Shawir, MBBS
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Sharon Hull, MD, MPH
President
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Allison L. Lewis
Executive Director
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O. Kent Nordvig, MEd
Project Representative