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73 Cards in this Set
- Front
- Back
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Community Rating
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put all the people in the group in the same bucket, charge them the same amount - risk is spread among a larger community - good risks help pay for poor risks. This was started by Baylor Hospital under a service plan
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Experience Rating
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group's medical claims experience, which varies from group to group due to different other factors and risk - more likely to be small for healthier, younger groups of employees
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Part A Funding
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2.9% taxes on wages - people receive it if they or their partners have paid this for ten years total
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Part A: What does it cover?
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Hospital care - inpatient nursing, hospice, etc
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Part A Eligibility
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Once you turn 65, you're automatically eligible if you've paid (and its mandatory)
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Part B Eligibility
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65 years old, receiving SS makes you automatically eligible unless you opt out
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Part B Funding
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Percentage taken out of social security check, its more if you make more money.
Also funded by beneficiary premiums (20% coinsurance) |
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Part B: Mandatory?
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No, and doctors don't have to accept it
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Part B Coverage
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Physician and outpatient care, no regards to patient's medical history. Not dental or optical services
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Part C Coverage
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Private health plan, fixed cost per employee OR regular fee-for-service plan
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Part C: Mandatory?
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No
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Implications of Part C
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-Many plans available
-Plans are very widely varied and its hard to choose the best one -Leads to adverse selection because healthier people are attracted and end up paying less even though the system is paying the same amount on them -Surplus isn't given to more benefits - |
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Secretary for Health & Human services
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Kathleen Sebelius
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Medicare & Medicaid Distributor
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Donald Burwick
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Part C Funding
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Premiums and federal payroll taxes
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Part D: Funding
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Beneficiary premiums, general funding (state and federal)
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Part D: Eligibility
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Must be enrolled in A OR B, must be enrolled in private plans approved by Medicare
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Part D: Coverage
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Prescription drug benefit, means-tested (people of lower income are taken into consideration), moving Medicare towards consumer-driven model
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Part D: Voluntary?
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Yes, but there is a late enrollment fee
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Donut hole
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You pay first deductible, then up to $2,700 you pay 25%, then you pay a next fixed price (over $3000) and adter that only 5%- but ends up zapping people's money away
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Medicare financing issues
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Paid for by working people,, HC costs keep rising, costs spike during patients' last months, more out-of-pocket spending because there's no limit,
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Medicare implications
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In and outpatient care has shrunk while drug benefits have grown, over-65 population is growing (baby boomers), doctors are hard to find
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Prospective reimbursement
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Trying to predict the cost for a procedure, removes incentive to be inefficient
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Capitation
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Average monthly cost of health care - physicians pay fixed cost
Leads to less motivation for care cause you're paid anyways |
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Implications of cost charing
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You may lose care because out-of-pocket expenses are too high
You might use less preventative care, making decisions based on deductible rather than health care needs You may not follow clinical plan. Makes people pay more and more, eventually they will run outSocietal consequences- adverse selection. |
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US Health Care System Characteristics
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-No single standardized system
-Medicine is a for-profit concept -Technology driven, focus on acute care -Multiple insurance schemes -3rd party intermediaries makes quality less important -Legal risks influence behavior |
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WHY does US HC suck?
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-Commodization of system
-Less preventative care -Docs price services -Little access to information -Capitation means set fee per person, less emphasis on nature of services -Phantom providers -People who need care drive cost up for everyone -HC isn't sensitive to supply and demand |
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4 principles of insurance
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-Risk is unpredictable
-Risk is predictable with some accuracy in a big group -Risk is tranferrable from indiv to group through resource pooling -Losses are shared by all |
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US vs Other Countries' HC
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US is better at rescue care, medical care technology
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Motivations behind Managed Care
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-Give single organization the management of financing, delivery, payment
-Flat rate per employee (keeping costs down) -Physicians as employees -Designed to control HC quality |
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Managed Care Backlash
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-HMOs costs got out of control
-Popular for employers but not for people -AMA wanted to remain 'private' and independence because they didn't want corporate control -Too socialist values -Government distrust -People didn't want tax increases -Incentive to treat less because doctors are guaranteed a salary |
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Medicare vs Medicaid: Eligibility
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Care- secure, when you reach 65, legal right; Aid- means tested, depends on other factors
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Medicare vs Medicaid: Funding
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Care- federal; Aid- state and federal
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Medicare vs Medicaid: Administration
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Care- federal standards (?); Aid- state variation
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Dual Eligibles
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Over 65, low income enough to qualify for Medicaid
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SICK: Janice Ramsey
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-Had diabetes so no one wanted to insure her for anything that was related
-Wasn't qualified for Medicare or Medicaid, couldn't qualify for HIPAA cause she had no previous coverage -Other private plans had exclusion periods she would have to wait durin -Self employed, so wasn't covered through her work -Scammed by American Benefit, which failed to pay premiums -Blue Cross was based on community rating and didn't account for adverse selection because of sick benefits, so they lost money and stopped CR |
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Consequences of being under/uninsured
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-More likely to die in hospitals
-More likely to be unhealthy -More likely to be diagnosed at a later stage because you skimped earlier -Less likely to get help -Bankruptcy |
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Medicaid: Coverage
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Health and long term care services for underprivileged population, including long-term planning, nursing, facilities, lab services
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Medicaid: Optional?
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For physicians, yes - they don't have to accept Medicaid
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Medicaid: Eligibility
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Varies from state to state, dependence-based, seniors, single parents, disabled, pregnant women, blind, poor parents and children, income-based, ENTITLEMENT PROGRAM
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Medicaid: Funding
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State and federal, federal partly reimburses state (at least 50%, more if its a poorer state), tax-based
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CHIP: Coverage
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Coverage for uninsured children whose families don't otherwise qualify for Medicaid
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CHIP: Eligibility
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Means-tested, children up to 18 years old, up to 200% of poverty line (half of states)
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CHIP: Optional?
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Yes
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CHIP: Funding
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State and federal funding, plans have premiums, states have their own programs
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COBRA
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-When you lose your job, you keep your insurance, but have to keep paying premium and it no longer comes 20-40% from paycheck
-Lasts 18 months -HIPAA covers you after if you keep your payments |
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SICK: JP Morell
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-Seniors had relied on insurance to cover gaps between Medicare and abilities
-Retirees such as Lester Sampson had given up pensions b/c they thought they were covered, but Morell could drop out b/c it wasn't part of union contract -?? |
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Gladwell on Moral Hazard
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-HC isn't a consumer good, people don't want to go to the hospital, etc
-People with more care end up spending less anyways because they are able to identify problems earlier and save money |
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Why does Medicare Advantage cost more?
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Averse selection: healthier people are attracted, but government ends up spending the same amount on people who need less care
This is because there is a fixed fee |
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Pathways to becoming uninsured
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-Losing a job with ESI
-Getting sick... -50.7 million in US |
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Barriers to obtaining insurance
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-Pre existing conditions
-High cost -Not being eligible for ESI (part-time, new hires, smaller firms, retirees) -Being self employed |
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ERISA
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Federal standard for big companies offering private insurance
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US HC costs & trends vs other countries
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-We spend more per capita
-Higher out of pocket costs -Less time in hospital -More administration costs -More advanced equipment leads to higher expenses -More hospital spending -More drug usage -Examples: more diabetes, more years of life cost because of terminal diseases |
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Gawande's Cost Conundrum
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-McAllen vs El Paso
-McAllen spends much more than El Paso, but they have similar health outcomes -Doctors in McAllen were bringing up prices b/c they ordered more tests, services, procedures (medicine overuse) -Docs aren't accountable -National institute must be made! |
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Gawande's Piecework
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-Hospitals collect money for each separate service (piecework)
-Government changed this and implemented different amounts for services, but doctors must still pay for other things (malpractice, secretaries, etc) -Harris Berman offered fixed fee care, made people only get care that was necessary (Matthew Thornton) |
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Angell's Privatizing
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-Canada's health care is superior b/c it isn't privatized
-Waiting times are longer in Canada, less people actually have to wait -US is only industrialized country that treats health care as a market commodity, not a social service -The notion that partial privatization in Canada will shorten waiting times for elective procedures is misguided - it would draw off resources from the public system, increase costs overall and introduce the inequities of the US system. The best way to improve the Canadian health care system is to put more resources into it. |
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Cherry Picking
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When insurance companies don't insure high-risk patients
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Wang's Personal & Physician Responsibility
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In West Virginia, plan is being produced where patients hold responsibility, being tracked on:
§ Whether they participate in health screenings § Whether they keep their appointments § Adhering to prescribed programs § Whether they take their medications BUT it has faults- ○ Puts responsibility on factors that are out of patients' control, systems are unreliable, children are dependent on parents ○ Holds Medicaid patients to higher standard (compliance rates are expected to be higher than on average) ○ Discriminates on SES ○ Discriminates on basis of diagnosis- patients with mental problems are less able to follow these regulations ○ Data collection is required and may be ambiguous |
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Health Savings Account
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-Started by Bush
-Focus on reducing MH -Consumers pay for HC with a tax free account -Leads to sick being at one end of spectrum and healthy at other end |
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Robinson's Reinvention of Health Insurance
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-Backlash against managed care has led to insurance industry changing premium prices
-Prices vary because of differences in benefits (more cost-sharing), network design, and management programs (catering to people who can generate higher savings - such as chronically ill) -Underwriting and risk ratings have began -Managed care has become dependent on 'actuarial skills' and 'sustainable prices' |
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Finn: What is Private Health Coverage?
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employer sponsored and coverage bought by individuals
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Blue Cross/Blue Shield
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-Non profit organizations, but offer similar to commerical organizations
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PPOs
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Networks composed of physicians providing discounted services offered by a HC provider
Beneficiaries can stay in network for services, and are charged more for leaving network Don't need referrals |
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Death Spiral
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Group of people who suffer from adverse selection
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Underwriting
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The process of determining whether or not to accept an applicant for coverage and determining what the terms of coverage will be, including the premium.
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HIPAA
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-Addresses lapses in coverage when one changes or loses jobs
-Kicks in when COBRA runs out -Expensive because its non discriminatory, high risk patients drive up costs |
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SICK: Rotzlers from Gilbertsville
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Lost job and insurance, had to end up filing for bankruptcy
Had to skimp on primary care, so they missed his wife's diagnosis Routine screening could have saved wife |
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SICK: Lawrence County
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-Ernie: loss of drug benefits led to death because drug helped thin blood
-This was because HMOs under "Tenncare" were less likely to cover people who needed care |
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SICK: Chicago
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-Marijon went to free health care center after getting a huge hospital bill after heart attack and then sued her for not paying
-Private hospitals attempted to make a profit |
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SICK: Los Angeles
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-Tony lived in very bad conditions, had a stroke due to untreated diabetes, eventually went to free clinic
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SICK: Denver
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-Psychiatric care isn't covered enough by HC
-Mental illnesses have stigma, cost more for insurance companies, are not as exactly diagnosed |
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Gawande: Redux
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First Objection: “Winter Texans” inflate the local costs of care.
Counter-Argument: Medicare costs are counted against their permanent place of residence. Second Objection: That the real cause of rising costs is medical malpractice and the “judicial hellhole” that is McAllen, Texas. Doctors practice defensive medicine and order more tests and procedures, thereby driving up healthcare costs. Counter-Argument: El Paso and McAllen both fall under Texas malpractice laws, which capped malpractice awards in 2003 Third Objection: That McAllen is poorer, unhealthier, and has many more illegal immigrants than low-cost communities like those in which the Mayo Clinic are found. Counter-Argument: This was precisely the purpose in comparing McAllen to El Paso; by seeing what local communities do differently, we can compare outcomes and determine which processes are the most efficient. |
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Heart of the Uninsured
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-Coverage gap for those with low income
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