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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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$en Characteristics thatDi/erentiate
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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$en Characteristics thatDi/erentiate
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
$en Characteristics thatDi/erentiate
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
$en Characteristics thatDi/erentiate
the US Health Care System
$ 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
$en Characteristics thatDi/erentiate
the US Health Care System
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9* ?mperfect 5ar"et ?tem pricin'
obtain fees char'ed for service (sur'eon)s
price*
services can)t be determined prior to procedure
+ac"a'e pricin' bundled fee for a 'roup of related services
Capitation all health care services include one set
fee per person, more all1encompassing
Characteristics that
Di/erentiate
the US Health Care System
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$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*
$en Characteristics thatDi/erentiate
the US Health Care System
$en Characteristics that
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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
$en Characteristics thatDi/erentiate
the US Health Care System
$en Characteristics that
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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
$en Characteristics thatDi/erentiate
the US Health Care System
$en Characteristics that
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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
$en Characteristics thatDi/erentiate
the US Health Care System
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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
$en Characteristics that
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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
$en Characteristics thatDi/erentiate
the US Health Care System
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@overnment)s &oles in the USHealth Service System
5ajor %nancier of health caredelivery
Determine reimbursement rates toproviders #ho render 5edicare 5edicaid services
&e'ulates throu'h licensin'
personnel and health careestablishments
Health policy
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5ajor +layers in the US HealthService System
Gho does these functionsE +hysicians Administrators
?nsurance eecutives ar'e employers @overnment See %'ure 1.1, pa'e 2
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A Disenfranchised Se'ment
?n the US, insurance is employer.based the unemployed usually have no insurance
=ven if employed, employees do not haveinsurance because:1* =mployers not mandated to o/er insurance
premium cost sharin' rarely paid at 144< if at all bene%t: 'roup rate or availability of insurance
-* +articipation in health insurance is voluntary
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Q: Why 5re eople +ninsured?
Unemployed
=mployers not re0uired to o/er healthinsurance
=mployees not re0uired to buy healthinsurance
Don)t %t eli'ibility of 'overnmentpro'rams
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$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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