73 terms

ULL Nurs 100 SI 12 Unit 8--US Health Care System

Chapter 7- pages 122-139 and Chapter 21 - pages 445 - 447 in Cherry, B. & Jacob, S. R. (2011). Contemporary nursing: Issues, trends, & management (5th ed.). St. Louis: Mosby. http://www.pbs.org/wgbh/pages/frontline/sickaroundamerica/view/
Historical Themes
Health care decisions primarily by physicians
Broad premise of providing "best care to everyone"
Rapid rise in sophistication & cost of medical technology
Economic incentives & fee-for-service payment encouraged overuse of health care services
Historical Themes--Notes
Page 124 - The high cost of health care did not happen suddenly - understanding some of the history sheds some light on this issue. For many years, the physicians were dominant in decision making , and this was intertwined with the fee-for-service payment method contributing to a lack of cost consciousness in health care. Rarely were costs discussed between physician & patient - so the cost of care was not considered until time to pay the bill.
In the 1960s - the idea of "if it might help, do it" flourished as the rapid pace of technology allowed physicians ways to perform more tests, etc. Physicians were paid according to the number of procedures/services. So...the result was overuse of health services.
History (Con't)
Providers had little incentive to contain costs
Full cost of care hidden from consumers
Most patients had some type of insurance or "third-party" payment
Costs subsidized by:
Taxpayers - programs such as Medicare & Medicaid
Drastic effect on Medicare
Established by Congress in 1965
Provides health insurance for people meeting criteria:
Age 65 & older who are eligible for social security
Have end-stage renal disease
Eligible disability
Increased costs led to a revolution in how both government & private insurance pay for health care
In 1965, Medicare was established by the U.S. Congress to provide health insurance coverage for people age 65 and older who were eligible for social security benefits, people with end-stage renal disease and the eligible disabled population. At this time, the Medicare program paid all hospital charges regardless of amount or appropriateness of services. Medicare costs began to escalate with increased medical usage, increased intensity of care, high inflation and a growing older adult population. These disbursements influenced the federal budget deficit, so the Centers for Medicare & Medicare Services (CMS) began revolutionary changes in how the government and the private insurances companies paid for healthcare.
Financing Revolution
1983 -Medicare moved from retrospective (fee-for-service) to prospective payment system (PPS)
Based on diagnosis-related groups (DRGs)
Limits total payment to hospital to amount predetermined for the DRG
Initiated by private insurance also
Financing Revolution--Notes
Page 126 - Medicare is the largest single payer of hospital charges. With diagnosis-related groups -each Medicare patient is assigned to a diagnostic grouping based on the primary diagnosis. Medicare LIMITS total payment to the hospital to the pre-determined amount for that diagnosis-related group.
**The old way - hospital patients incurred costs & Medicare reimbursed generously. Since this started - if the hospital costs are above what Medicare pays - the hospital has a loss; if the hospital costs are less than what Medicare pays - the hospital has a profit.

The private insurance followed Medicare's shift to prospective payment system and developed managed care.
Managed Care
Goal - minimize charges for inappropriate or excessive health care services **
Review processes used - options reviewed by nurse/physician employed by insurance company to determine necessity
Coverage may be denied for unnecessary, excessive or experimental procedures
Some types (See Table 7-2)
Health maintenance organizations (HMOs)
Preferred provider organizations (PPOs)
Point-of-service plans (POS)
Managed Care--notes
Emphasize - the goal of managed care is to minimize payment of charges for inappropriate or excessive health care services. Contrasts to previous "if it might help, do it" approach.
Coverage may be denied for unnecessary, excessive or experimental procedures.
Types of Health insurances plans in US
Fee for Service(FFS)/indemnity plan
PPO(preferred provider organization)
POS(point of service)
HMO(Health maintenance organization)
TRICARE:military health insurance
Fee for Service(FFS)/indemnity plan
Member (covered individual) pays a premium for fixed percentage of expense covered.
Includes deductible and co-payment
Allows member to choose physician and specialists without restraint
May only cover usual or reasonable and customary charges for treatment and services, with member responsible for charges above that payment
May or may not pay for preventive care
PPO(preferred provider organization)
Member (covered individual) pays a premium for fixed percentage of expense covered.
includes deductible and copyament
Member may select physician, but pays less for physicians and facilities on the plan's preferred list.
May or may not pay for preventive care.
POS(point of service)
Offered by HMO or FFS
Allows use of providers outside plan's preferred list or network, but requires higher premium and copayments for services
HMO(Health maintenance organization)
Member (covered individual) pays a premium
Has a fixed copayment
Members must select primary care physician approved by HMO
Member must be referred for treatments, specialists, and services by primary care physician.
Services outside of "network" must be prepapproved for payment
Plan may refuse to pay for services not recommended by primary care physician
Encourages the use of preventive care
Federal health insurance plan for Americans 65 and older and certain disabled people.
Part A covers hospital stays
Part B covers payment of a premium and covers physician services and supplies
Carries a prescription drug benefit
Health care coverage for low-income people who are aged, blind, disabled, or certain families with dependent children
Federal program is delivered and managed by each state for eligibility and scope of services offered.
TRICARE:military health insurance
Civilian health and medical health insurance program for military, spouses, dependents, and beneficiaries
Program offered through Military Health Services System
Access & Economic Approaches
Uninsured/underinsured - working poor, part-time workers, unemployed
Medicaid - federal health insurance plan administered by states improves access & covers approx. 43 million
Cost shifting - unpaid costs covered by those who do pay/increases insurance premiums
Access & Economic Approaches-notes
Health care costs continue to have notable increases in the U.S. Lack of access to health care primarily coincides with a lack of insurance coverage. So, access to healthcare becomes an issue of financial access. The U.S. has about 47 million fall in this category. These people that are uninsured/underinsured include the working poor employed by small firms without insurance coverage, part-time workers and unemployed people. Unpaid costs that arise from uninsured and underinsured populations require payment from who do pay so hospitals, etc can continue providing healthcare. This is known as cost shifting. The health care providers increase their charges, insurance companies increase their premiums.
Economic Approaches to Allocating Health Care
Market System - buyer & seller come together so buyer can purchase goods/services
Private ownership of resources
Private decisions by businesses & consumers
To function effectively must be competitive
Market System
*U.S. economy founded on principles of competitive market system
Many buyers & sellers - no single seller can manipulate the price
Products in similar markets are similar
Both sellers & consumers well informed about market conditions/prices
Freedom to enter or leave the market
U.S. health care system
regulated market system
Some regulation by federal or state legislation
Minimal nurse staffing in long-term facilities
Disposal of medical waste products
Regulations affecting medical laboratories
Licensure & certification laws
Violates principles of competitive market system
Example - Consumers often do not get price information until after services provided
U.S. health care system -notes
No advanced industrial country has a purely competitive market for the allocation of health care resources. The U.S. is considered a regulated market....because it is regulated somewhat by federal or state legislation. Some examples include minimal nurse staffing in long-term facilities, laws regarding the disposal of medical waste products, regulations regarding the conduct of medical laboratories. Also, all licensure and certification laws or qualifying examinations represent regulation of medical professionals
Third-Party Payers
Health Insurance - most common type; entity other than patient assumes responsibility for payment of services
Interferes with principles of competitive system as consumers often do not pay "full price"
Consumers may not be motivated to investigate health care options as insurance is paying some or all of the costs
Third-Party Payers-notes
The health insurance company that makes payments for health care is the most common type of third party payer in the U.S.
Interferes with the principles of a competitive market system. The competitive market systems speculates that the customer make their decisions to purchase something on the basis of the its price , but health care customers often pay less than 'full price' because of their insurance pays some or all of the cost. Beware—the cost is considered a 'hidden' health cost because the cost is passed to the consumer in the form of price increases for the products or services offered by the business paying the health insurance premiums for its employees. The client perceives the health care to be much cheaper than it actually is and may not be motivated to to make informed decisions about the cost of various health care options.
How Health Care Is Paid
1. Private insurance or out-of pocket
2. Government health programs
Veterans health system
Health Care Payment -private
Private insurance- largest percentage of health care coverage; often through the place of employment
Out-of pocket expenses
Insurance premiums
Responses to increases in family plan premiums
High-deductible health plans
Health reimbursement accounts (HRAs)
Health savings accounts (HSAs)

These offer flexibility, consumer discretion, & tax-free ways to save for future health care needs
Health Care Payment - public insurance
Government influence - generates ½ hospital revenues & more than ¼ of physician incomes
Medicare - federal program enacted in 1965
Largest insurance program
Entitlement program - based on age or disability rather than need
Medicaid - joint federal-state program
Provides health insurance coverage to impoverished families, particularly those with children
Primary payer of long-term care nationwide
Fastest growing component of many states' budgets
Health Care Payment - public insurance-notes
Public insurance:
1-Medicare---largest health insurance program—entitlement program based on age or disability criteria rather than need
2-Medicaid—joint federal-state program -provides health insurance coverage for impoverished families, particularly women & children
New Reimbursement Methods
Pay-for-performance (P4P)
Medicare & private insurance reimburse providers based on quality of care
Providers must meet standards of care for certain conditions such as diabetes & heart failure

Nurses are at the center of helping healthcare agencies manage these new payment mechanisms by ensuring that health outcomes are achieved and errors are prevented.
New Reimbursement Methods-cont.
Never Events
2008 - Medicare will no longer pay hospitals the extra costs for treating preventable errors
Encouragement to hospitals to prevent errors rather than being paid for them
Includes 28 errors- such as wrong site surgery, mismatched blood transfusions, injuries from falls

www.cms.hhs.gov/apps/media/press/factsheet. asp?Counter=3043
Never Events
Surgical Events
Surgery on wrong body part
Surgery on wrong patient
Wrong surgery on a patient
Foreign object left in patient after surgery
Post-operative death in normal health patient
Implantation of wrong egg
Product or Device Events
Death/disability associated with use of contaminated drugs
Death/disability associated with use of device other than as intended
Death/disability associated with intravascular air embolism
Patient Protection Events
Infant discharged to wrong person
Death/disability due to patient elopement
Patient suicide or attempted suicide resulting in disability
Care Management Events
Death/disability associated with medication error
Death/disability associated with incompatible blood
Maternal death/disability with low risk delivery
Death/disability associated with hypoglycemia
Death/disability associated with hyperbilirubinemia in neonates
Stage 3 or 4 pressure ulcers after admission
Death/disability due to spinal manipulative therapy
Environment Events
Death/disability associated with electric shock
Incident due to wrong oxygen or other gas
Death/disability associated with a burn incurred within facility
Death/disability associated with a fall within facility
Death/disability associated with use of restraints within facility
Criminal Events
Impersonating a heath care provider (i.e., physician, nurse)
Abduction of a patient
Sexual assault of a patient within or on facility grounds
Death/disability resulting from physical assault within or on facility ground
National Initiatives
Healthy People- provides 10-year national goals aimed at health improvement of all Americans
Vision - A society in which all people live long, healthy lives
Healthy People Overarching Goals
Attain high-quality, longer lives free of preventable disease, disability, injury, and premature death
Achieve health equity, eliminate disparities, & improve the health of all groups
Create social & physical environments that promote good health for all
Promote quality of life, healthy development, & healthy behaviors across all life stages
U.S. Public Health
Most within the Federal Dept. of Health & Human Services (HHS)
Primary agencies
Centers for Disease Control & Prevention (CDC)
Health Resources & Services Administration (HRSA)
National Institutes of Health (NIH)
Food & Drug Administration (FDA)
Agency for Healthcare Research and Quality (AHRQ)
U.S. Public Health Leadership
Head of the U.S. Public Health Service = U.S. Surgeon General = Dr. Regina M. Benjamin
U.S. Surgeon General & the Centers for Disease Control (CDC) play primary leadership role for public health policy
Louisiana Public Health
Provides a wide variety of services. Some are:
Birth certificates/vital records
Restaurant inspections
STD (sexually transmitted disease) program
Tuberculosis control program

Health Care Reform
Patient Protection and Affordable Care Act (New law)
Mandates that US citizens must buy a federally approved level of health insurance by January 1, 2014 (there are some exemptions)
Currently before the Supreme Court to determine the constitutionality of the mandate
Nickname is "Obamacare".
Institute of Medicine reports
Alarming 2000 Report - To Err Is Human: Building a Safer Health System
Conclusion -up to 98,000 patients killed each year from medical errors
2001- Crossing the Quality Chasm: A New Health System for the 21st Century
A vision for improving our nation's heath care
IOM reports--notes
Page 445 - 446
Urgent case for quality improvement in the US health care system
Selected indicators from recent IOM reports
Between 44,000 and 98,000 Americans die of medical errors annually (IOM, 2000)
Medication-related errors for hospitalized patients cost roughly $2 billion annually (IOM, 2000)
The 45 million uninsured Americans exhibit consistently worse clinical outcomes than the insured and are at increased risk for dying prematurely (IOM, 2009)
The lag between the discovery of more effective forms of treatment and their incorporation into routine patient care averages 17 years (IOM, 2003)
Forty percent of patients are not receiving care that is recommended (Agency for Healthcare Research and Quality [AHRQ], 2008)
The 2008 National Healthcare Quality report notes that US health care quality is suboptimal and continues to improve at a slow pace (AHRQ, 2008)
Crossing the Quality Chasm
Six guiding aims (STEEP):
Patient Centered
Six guiding aims (STEEP):
IOM's six aims to guide improvement
Safe: avoiding injury to patients from the care that is intended to help them
Timely: reducing waits and sometimes harmful delays for both those who receive and those who give care
Effective: providing services based on scientific knowledge to all who could benefit and refraining from providing services to those not likely to benefit
Efficient: avoiding waste, including waste of equipment, supplies, ideas, and energy
Equitable: providing care that does not vary in quality because of personal characteristics such as gender, ethnicity, geographic location, and socioeconomic status
Patient centered: providing care that is respectful of and responsive to individual patient preferences, needs, and values and ensuring that patient values guide all clinical decisions
Ten simple rules to guide improvement
Care is based on continuous healing relationships
Care is customized according to patient needs and values
The patient is the source of control
Knowledge is shared, and information flows freely
Decision making is evidence based
Safety is a system property
Transparency is necessary
Needs are anticipated
Waste is continuously decreased
Cooperation among clinicians is a priority
Local Resources
Lafayette Community Health Care Clinic
St. Bernadette Clinic
Lafayette Parish Public Health Unit
University Medical Center-One of 7 LSU hospitals
Lafayette Community Health Care Clinic
Outpatient facility/ also offers dental & pharmacy
Targets eligible working uninsured
Started in 1992
Mostly volunteers
Location - 1317 Jefferson St.
This is different from St. Bernadette' s Clinic which does not have that requirement.
St. Bernadette Clinic
Outpatient clinic - outreach of Our Lady of Lourdes Hospital
Free care to uninsured, poor, homeless (do not have to be employed to receive care)
Staff usually includes nurse practitioner, 2 RNs, volunteers, others.
Offer dental clinic also. Flu vaccines & TB skin testing available for fee to general public
Location - 409 St. John St. (same building as St. Joseph's diner)

It is different from the Lafayette Health Care Clinic in that there is no employment requirement. Also, there is no physician - so the care offered is within the scope of what the nurse practitioner can do. As of now - we take 2nd semester juniors here -The staff lets the students have a lot of autonomy.
Lafayette Parish Public Health Unit
WIC - Women, Infants, & Children - nutrition program for pregnant, breastfeeding, postpartum women; infants & children under 5
STD (sexually transmitted disease) clinic - exam & treatment; HIV testing included
Tuberculosis treatment
Vital records - birth & death certificates
Pregnancy tests
Children Special Health Services
Location - 220 West Willow St. Building A 262-5616
University Medical Center-One of 7 LSU hospitals
Acute care hospital
Provides access to care for the uninsured (insured can go there)
Training for future health care professionals
Location - 2390 West Congress
There have been some unit closings here recently - such as the detox unit.
List historic issues that have contributed to rising health care costs in the U.S.
1. The physician's role as being primarily responsible for health care decision making
2. Broad objective of providing the "best" possible care to everyone
3. Rapidly increasing sophistication and cost of medical technology
4. Economic incentives and the fee-for-service payment method that encouraged overuse of health care services
5. Providing care for the uninsured population
List future trends that are affecting health care delivery systems in the U.S.
1. Rapidly expanding technology
2. Rapid increase in the aging population
3. Growing diversity of the U.S. population
4. Increasing focus on safety, efficiency, and effectiveness in health care
5.Consumer empowerment
The U.S. economy is based on a competitive market system, and buyers are able to have good information about the products and services they might want to buy. List points about why the U.S. health care system cannot be classified as a competitive market system.
1. Consumers may not know what health care to purchase without a provider's diagnosis
2. Consumers do not get information about the prices of services until after services are provided
3. Once the patient visits the provider for health care services, that provider is likely to be in charge of numerous subsequent decision, so the provider becomes an "agent" for the patient
4. The provider's reimbursement incentives may encourage overuse or underuse of treatment options.
Discuss ways in which the uninsured population affects the health care system.
1. Uninsured and underinsured populations generate uncompensated or indigent care costs and bad debt for health care providers
2. Unpaid costs must be covered by those who do pay, so the hospital can continue operating, a process known as "cost-shifiting"
3. Charges for households and public and private insurers are increased to pay some contribution for the care of the uninsured, thus increasing premiums, making it even more difficult for many households and business to afford coverage.
As a nurse you have been asked to present to a community group about ways to reduce health care costs. List points that you would include in your presentation.
1. Practice preventive health with health screenings and routine self-examination. Take advantage of screenings offered in the community, at hospitals, or at churches.
2. Develop an active relationship with health care providers to improve communication. Ask providers to explain the purposes of all prescribed tests and medications. Become an informed consumer.
3. Use emergency care only in emergencies. See your health care provider during office hours
4. Know health risks for lifestyle choices such as alcohol and drug use, dietary habits, sedentary behaviors, and safety at home and driving
5. Understand and use the health care benefits of the insurance plan you have to stay healthy. Take advantage of all preventive benefits offered.
6. Choose non-hospital alternatives for treatment whenever possible. Take a conservative approach to health care usage. Comparison shop for health care alternatives.
7. Choose generic drugs whenever possible. Ask your health care provider to prescribe the least expensive drugs that will provide positive outcomes
A method of reimbursing providers (usually primary care providers such as physicians or nurse practitioners) in which the insurance company pays the provider a set amount of money each month to provide a defined set of health care services for the patient enrolled in the insurance company's health plan. The payment is typically expressed as a per-member-per-month payment. The defined health care services generally include preventive, diagnostic, and treatment services.
Centers for Medicare and Medicaid Services (CMS)
The federal government agency that administers Medicare and Medicaid.
DRGs (diagnosis-related groups)
Required for reimbursement for health care services; based on a predetermined fixed price per case or diagnosis in 468 categories.
Production of a desired outcome; doing the right thing right to achieve the expected result.
The extent to which resourses such as energy, time, and money are used to produce an intended result.
Gross Domestic Product (GDP)
Measure of the total value of goods and services produced within a country; the most comprehensive overall measure of economic output; provides key insight into the driving forces of the economy.
An economic term that refers to a change in some variable (e.g., the number of tests performed).
A jointly sponsored state and federal program that pays for medical services for persons who are elderly, poor, blind, or disabled, and for families with dependent children who meet specified income guidelines.
A federally funded health insurance program for the disabled, persons with end-stage renal disease, and persons 65 years of age and older who qualify for Social Security benefits.
Prospective payment system
A method of reimbursing health care providers (i.e., physicians, hospitals) in which the total amount of payment for care is predetermined on the basis of the patient's diagnosis; provides for a "set price per diagnosis" payment system in contrast to the retrospective or "fee-for-service" system; encourages increased efficiency in the use of health care services in that providers are reimbursed at a set level, regardless of how many services are rendered or procedures performed to treat a patient in a particular diagnostic category; predominant method of payment in today's health care system
An individual (such as a physician or nurse practitioner) or an organization (such as a hospital) that receive reimbursement for providing health care services.
Private health insurance
A method for individuals to maintain insurance coverage for health care costs through a contract with a health insurance company that agrees to pay all or a portion of the costs of a set of defined healthcare services such as routine, preventive, and emergency health care; hospitalizations; medical procedures; and/or prescription drugs. Typically the private insurance is provided through an individual's employer and a portion paid by the employee. Private insurance policies can also be purchased by individuals but are generally much more expensive than when provided through an employer's group plan.
Retrospective payment system
A method of reimbursing health care providers (i.e., physicians, hospitals) in which professional services are rendered and charges are billed according to each individual service provided; also known as the "fee-for-service" payment system. This system may encourage overuse of health care services because as additional services are rendered or procedures performed, revenue received by providers increases.
Single payer system
A method of reimbursement whereby one payor, usually the government, pays all health care expenses for citizens through funding acquired by taxes. Decisions about covered treatments, drugs, and services are made by the government. Although the terms univeral health care and single payor system are sometimes used interchangeably, universal health care can be administered by many different payor groups; both systems offer all citizens health insurance coverage.
Third party payer
An organization other than the patient and the supplier (hospital or physician), such as an insurance company, that assumes responsibility for payment of health care charges.
IOM (Institutes of Medicine)
National Academy of Sciences Institute of Medicine; a nonprofit organization with the mission of advancing and disseminating scientific knowledge to improve human health. The Institute provides to government, the corporate sector, the professions, and the public objective, timely, authoritative information and advice regarding health and science policy.
Never events
Serious adverse events during an inpatient stay that should never occur or are reasonably preventable through adherence to evidence-based guidelines. The Centers for Medicare and Medicaid Services through revisions in coverage and payment policies, provide hospitals with financial incentives to reduce the occurrence of never events.
Pay for Performance
reimbursement of providers based on the quality of care provided with an emphasis on prevention and reducing complications from chronic diseases.
Personal priority
The professional nurse's goal is to make patient safety a
National Patient Safety Goals by The Joint Commission
Improve the accuracy of patient identification
Improve the effectiveness of communication among caregivers
Improve the safety of using medications
Reduce the risk of health care-associated infection
Accurately and completely reconcile medications across the continuum of care.
Reduce the risk of patient harm resulting from falls.
Encourage patients' active involvement in their own care as a patient safety strategy
Improve recognition and response to changes in a patient's condition