Unit 8 Business of Caring

Chapter 22 Controlling Health Care Costs

Rising Cost of Health Care U.S. spends more per person, but not highest success or satisfaction rates Causes of rising costs –Technological advances –Costs of drugs –Specialization –Aging population –Declining health of youth

Question True or False: –Health care costs are evenly distributed among all patients.

Answer False About 10% of patients incur 80% of costs

Health Care Institutions Nonprofit Proprietary (for profit) Government

History of HC Reimbursement Physicians determined cost of services Fee-for-service Premiums Need to control costs Need new ways of paying for health care

Health Care Payment Methods Direct pay Private insurance Government plans

Government Programs Medicaid Medicare –Part A –Part B –Part C –Part D

Question Which part of Medicare coverage would pay for hospitalizations? A.Part A B.Part B C.Part D

Answer A. Part A Medicare Part A –Helps pay for inpatient care Medicare Part B –Helps pay for outpatient services

Answer A. Part A Medicare Part A –Helps pay for inpatient care Medicare Part B –Helps pay for outpatient services

Answer A. Part A Medicare Part D –Helps pay for medications prescribed for treatment

Government Programs Deductible Coinsurance Need for Medigap policy

Question Which of the following refers to the amount required to be paid by the insured before benefits become payable? A. coinsurance B. premium C. deductible

Answer C. Deductible Coinsurance is a cost-sharing provision which stipulates that the insured is to assume a percentage of the costs of covered services Premium is an agreed-upon amount an insured pays the insurance company

Government Involvement DRGs (diagnostic-related groups) Reimbursement Importance of maintaining Medicare approval for most institutions

Managed Care Goals Provide affordable health care Ensure high-quality care Discourage unnecessary costs Eliminate duplication of procedures Earn a profit

Managed Care Methods Prepaid plans Negotiated fees Primary care providers Review of services

Managed Care Systems Health maintenance organization (HMO) Exclusive provider organization (EPO) Preferred provider organization (PPO) Point-of-service plan (POS)

Question Which of the following managed care systems allows patients to receive services from participating or nonparticipating providers? A.POS B.PPO C.HMO

Answer A. POS POS plan allows patients to receive services from participating or nonparticipating providers PPOs and HMOs do not allow this flexibility

National HC Coverage Problems inherent in private health care coverage Affordable Care Act

Controlling Organizational Costs Resources required: –Financing –Technology and supplies –Facilities –Personnel

Resources Required

Financing Terms Expenditures Account receivable Account payable Cost of money

Question Which of the following refers to the source of money used to run a business? A. expenditures B. financing C. cost of money

Answer B. Financing refers to the source of money used to run a business Expenditures refer to any money that is spent in the process of doing business Cost of money refers to the value that could be earned on money if it were received by the facility and invested

Question What would it be called when a hospital owes money to a supplier? A.Accounts receivable B.Accounts payable C.Cost of money

Answer B. Accounts payable –When money owed to others for services, supplies, or equipment received Account receivable –When services have been given and payment not received Cost of money –Amount that could be earned on money owed if invested

Impacting Costs Ask: –How can I help reduce unnecessary costs? Strive for personal efficiency Focus on the job Be careful with use of supplies and equipment

Impacting Costs Bill and code correctly Maintain inventory Educate patients Be willing to cross-train

Personal Efficiency Use problem-solving process Assume responsibility Don't just let life pass you by Avoid becoming sidetracked

Personal Efficiency Expect setbacks Eliminate unimportant time wasters Communicate clearly and honestly Look at your life as a whole

Question True or False: –The individual health care professional has an impact on the efficiency of the health care facility.

Answer True Each health care professional impacts efficiency of health care facility –Can be negative or positive Depends on personal efficiency of person

Acting with Thought What are the facts? What is the best course of action? What is the right thing to do? What is the probable impact of my actions?