Health Care Systems Refer to the Healthcenter21 Course Guide for more information about editing teacher presentations.

Introduction to Systems Theory System – A group of individual parts that work together to form a unified whole. Systems Theory – A way of studying a system as one unit, instead of individual parts. <LS.HS.Systems.Theory.General-P01-01.jpg> Introduction to Systems Theory Any business, organization, or family can be called a system. A system is a group of individual parts that work together to form a unified whole. The systems theory is a way of studying a system as one unit, instead of individual parts. The theory helps to focus on the primary mission, or purpose, of a system. The systems theory applies to any system in life, such as the way a family operates or the way a hospital provides health care services. By examining a system as a whole, it is easier to understand how each part contributes to the overall mission. Additionally, the systems theory makes it easier to pinpoint flaws in the system.

Components of the Systems Theory Input Throughput Output Feedback Loop Controls Environment Goals Mission <LS.HS.Systems.Theory.General-P02-01.jpg> Components of the Systems Theory To understand the systems theory, you must learn the parts, or components, of the theory. The components of the systems theory include: Input Throughput Output Feedback Loop Controls Environment Goals Mission NOTE: Systems theory will be explained to students in greater detail in the Learn and Practice exercise. Students will be presented with a scenario that demonstrates systems theory.

Inputs, Throughputs, and Outputs Input – Anything that enters a system, including money, resources, materials, or effort. Throughput – A process that converts the input into a final product or service. Output – The final product of service that is provided by a system. <LS.HS.Systems.Theory.General-P02-01.jpg> Inputs, Throughputs, and Outputs Input is anything that enters a system. Input could include money, resources, materials, or effort. Throughput is a process that converts the input into a final product or service. An output is the final product or service provided by a system.

Feedback Loop Feedback Loop – A process of monitoring outputs to determine whether or not the system is working. Feedback should be evaluated and then put back into the system to improve future outputs. <LS.HS.Systems.Theory.General-P02-01.jpg> Feedback Loop The feedback loop is a process of monitoring outputs to determine whether or not the system is working. Feedback should be evaluated and then put back into the system to improve future outputs.

Controls and Environment Controls – Anything that pinpoints problems in a system before the output is complete. Environment – The circumstance in which the system exists. The system relies on the environment for resources. <LS.HS.Systems.Theory.General-P02-01.jpg> Controls and Environment Controls are anything that pinpoint problems in a system before the output is complete. An environment is the circumstance and condition in which a system exists. The system relies on the environment for resources.

Goals and Mission Goals – A measurable activity that must be completed to ensure that the mission is accomplished. Mission – The specific, stated purpose of a system. <LS.HS.Systems.Theory.General-P02-01.jpg> Goals and Mission A system must have a specific, stated purpose, or mission. In order to reach the mission, a system must define several measurable goals.

Evaluate the System The key to evaluating a system is to determine if the mission is fulfilled. To evaluate a system, look at the “big picture.” <LS.HS.Systems.Theory.General-P02-01.jpg> Evaluate the System Once the specific components of the systems theory are understood, the system can be evaluated. The key to evaluating a system is to determine if the mission is fulfilled. This is sometimes called evaluating the “big picture.”

Health Care Systems Nearly every industrialized country has a national health care system. Some countries have public health care systems, and other countries have private health care systems. <LS.HS.Systems.Theory.National-P01-01.jpg> Health Care Systems Nearly every industrialized country has a national health care system. Some countries have a system of publicly-funded health care. Other countries use private funding to administer health care services. Neither system is entirely “right” or “wrong.” However, each country must monitor its system carefully. Changes may be needed to ensure that the maximum number of citizens receive the health care they deserve.

Public Health Care Systems Mainly funded by taxes and social security insurance. Advantage – Every citizen is guaranteed health care regardless of economic status. Disadvantages – Health care is not always comprehensive, and taxes may be higher. Norway, France, the United Kingdom, and Canada <LS.HS.Systems.Theory.National-P02-01.jpg> Public Health Care Systems Public health care systems are those that are mainly funded by taxes and social security insurance. The advantage of a public health care system is that every citizen in the country is guaranteed health care, regardless of their economic status. A disadvantage is that health care is not always comprehensive. This means that not all types of health care services will be paid for. The government may decide which services are included and which ones are not. Another disadvantage of this type of system is that taxes may be higher when compared to countries with private health care systems. Countries with public systems include Norway, France, the United Kingdom, and Canada.

Private Health Care Systems Funded mainly by private insurance agencies and out-of-pocket payments. Advantages – Coverage is often comprehensive, taxes may be lower, and economic growth is stimulated. Disadvantage – Not every citizen is guaranteed health care. United States and Switzerland <LS.HS.Systems.Theory.National-P04-01.jpg> Private Health Care Systems Private health care systems are those that are funded mainly by private insurance agencies and out-of-pocket payments. In a private health care system, not every citizen is guaranteed health care. Private systems promise health care only to those who can afford to purchase health insurance. However, most private systems have government-sponsored programs that provide health coverage for the elderly, disabled, and unemployed. But this coverage may be limited. There are a few advantages to the private system. Because most health care services are not funded by taxes, taxes tend to be lower in countries with private systems when compared to those with public systems. Another advantage is that private insurance agencies often provide comprehensive services. Finally, private systems can stimulate economic growth in a country by providing competition among private insurance agencies. The United States and Switzerland are examples of countries with private health care systems.

Mixed Systems Few countries contain a purely public system or a purely private system. Most countries create a mixed system by using various funding sources to cover health care expenses. Example: Canada and the United States <LS.HS.Systems.Theory.National-P05-01.jpg> Mixed Systems Few countries contain a purely public system or a purely private system. Most countries create a mixed system by using various funding sources to cover health care expenses. For example, the United States is primarily a private system. Most citizens purchase insurance through private agencies to cover health care expenses. However, the government has created several medical assistance programs to help the elderly, disabled, and unemployed. These programs are paid for by taxes. On the other hand, Canada is a primarily public system. Canadians pay taxes into a public health care fund. This money is then used to cover medical expenses for every citizen. However, not every type of procedure or treatment is approved for public funding. Therefore, private citizens may have to pay out-of-pocket for certain types of medical care.

Goals Three goals for national health care systems: To provide quality health care to the entire population. To be responsive to the citizens’ expectations. To ensure financial protection and fair distribution of financing. These goals must be considered when evaluating any national health care system. <LS.HS.Systems.Theory.National-P07-01.jpg> Goals According to the World Health Organization (W.H.O.), the three primary goals of any nation’s health care system should be: To provide quality health care to the entire population. To be responsive to the citizen’s expectations. To ensure financial protection and fair distribution of financing. These goals must be considered when evaluating any national health care system.

Compare Neither the private system nor the public system is perfect. All systems must be flexible and able to adapt to the changing needs of a society. Health care providers within a system must do their part to ensure that every patient receives the best care possible. <LS.HS.Systems.Theory.National-P13-01.jpg> Compare Neither the private system nor the public system is perfect. Each system has some high points and some low points. But all systems must be flexible and able to adapt to the changing needs of a society. Additionally, health care providers within a system must do their part to ensure that every patient receives the best care possible.

Health Care Delivery Systems The health care industry is made up of many delivery systems. A delivery system is a facility or organization that provides health care services. Examples of delivery systems include hospitals, long-term care facilities, medical offices, laboratories, and nonprofit organizations. <LS.HS.Systems.Delivery.Facilities-P01-01.jpg> Health Care Delivery Systems The health care industry is made up of many delivery systems. A delivery system is a facility or organization that provides health care services. There are many types of delivery systems. Hospitals, long-term care facilities, medical offices, and laboratories are all examples of delivery systems. In addition, delivery systems can be owned by private companies, or they can be part of a government agency or a nonprofit organization.

Components of Delivery Systems Services Consumers Health Care Personnel Payment for Services <LS.HS.Systems.Delivery.Facilities-P02-01.jpg> Components of Health Care Delivery Systems Although each system is different, all health care delivery systems share these basic components: Services: All delivery systems provide one or more health care services to a specific group of people. Consumers: A consumer is any person who needs health care services. Health Care Personnel: Delivery systems must have a staff of health care personnel to administer the services. Payment for Services: Delivery systems must establish methods of payment for the services they provide.

Hospitals Size Ownership Services Small Large Proprietary Nonprofit Government Religious Services General Specialty <LS.HS.Systems.Delivery.Facilities-P04-01.jpg> Hospitals A health care facility is often the place where health services are provided. One type of health care facility is a hospital. Hospitals vary in size, ownership, and types of services. Size: Some hospitals are small and provide basic needs for a community. Other hospitals are large and offer a wide range of services. These services include treatment, education, and research. Ownership: Many hospitals are classified as proprietary, which means that they earn a profit from their services. Proprietary hospitals are usually privately owned agencies. Hospitals that do not receive a profit from their services are called nonprofit or voluntary. Other forms of hospital ownership include government hospitals and religious hospitals. Services: General hospitals treat a variety of conditions. Specialty hospitals provide services for certain conditions or age groups. For example, pediatric hospitals treat children, and oncology hospitals treat individuals with cancer.

Long-Term Care Facilities Provide long-term care for elderly patients and for patients in rehabilitation. Levels of long-term care: A nursing home provides care for patients who can no longer care for themselves. An independent living facility allows patients to use only the services they need, such as transportation or housekeeping. <LS.HS.Systems.Delivery.Facilities-P06-01.jpg> Long-Term Care Facilities Long-term care facilities are another type of health care delivery system. These facilities mostly provide care for elderly patients. However, some long-term care facilities offer treatments for patients with disabilities or those in rehabilitation. There are several levels of care provided at long-term care facilities. For example, a nursing home is designed to care for patients who can no longer care for themselves. On the other hand, an independent living facility allows patients to rent an apartment and to use only the services they need. These services may include transportation, housekeeping, and laundry.

Medical Offices Some medical offices are operated by just one or two doctors. Other are made of large groups of health care professionals. Some medical offices treat a wide range of conditions. Others are specialized for specific ages or medical conditions. <LS.HS.Systems.Delivery.Facilities-P07-01.jpg> Medical Offices A medical office is a type of delivery system. Examples include the family doctor, the eye doctor, and the dentist. Some medical offices are operated by just one or two doctors. Others are made of large groups of physicians and health care professionals. Like hospitals, some medical offices treat a wide range of conditions. A family doctor, for example, will examine a variety of patients. However, many medical offices are specialized. They offer treatments for a certain condition or age group. Ophthalmologists examine only eyes, and cardiologists care only for heart diseases.

Mental Health Services A healthy mind is just as important as a healthy body. Mental health professionals treat and counsel patients with a variety of conditions: Mental disorders Substance abuse and addiction Domestic violence and abuse <LS.HS.Systems.Delivery.Facilities-P09-01.jpg> Mental Health Services Mental health facilities are a significant part of the health care system. Medical studies show that a healthy mind is just as important as a healthy body. Some mental health facilities treat patients with mental disorders. Other mental health facilities provide counseling to people who struggle with substance abuse and addiction. Another important role of mental health facilities is to provide aid to victims of abuse and domestic violence.

Other Systems Emergency care services Laboratories Hospice Home Health Agencies <LS.HS.Systems.Delivery.Facilities-P10-01.jpg> Other Systems There are many other delivery systems within the health care industry. Emergency care services provide immediate aid for the sick or injured. Laboratories perform tests to help diagnose illness and disease. Hospice facilities provide care and counseling for terminally ill patients. Home health care agencies offer treatment and therapy within a patient’s home. The health care industry is growing rapidly. There are endless opportunities for careers, advancement, and personal growth.

Government Facilities Government health care facilities exist at several levels: International National State Local Government facilities are supported by taxes. <LS.HS.Systems.Delivery.GovNonProfit-P01-01.jpg> Government Facilities The government has created many health care facilities. The United States has several government hospitals and medical offices. These facilities are supported by taxes. The facilities exist at several levels: international, national, state, and local.

World Health Organization International agency sponsored by the United Nations 192 member countries The goal of W.H.O. is that all people obtain the highest possible level of health, including physical, mental, and social well-being. <LS.HS.Systems.Delivery.GovNonProfit-P02-01.jpg> World Health Organization The World Health Organization (WHO) is an international agency that is sponsored by the United Nations. WHO is made of 192 member countries from around the globe. The goal of WHO is that all people obtain the highest possible level of health. This includes physical, mental, and social well-being. Each year, WHO investigates serious health problems and publishes information on worldwide diseases.

Department of Health and Human Services Its goal is to protect the health of American citizens and to provide essential human services, especially for those who cannot help themselves. It is broken into many divisions, including: National Institute of Health Center for Disease Control and Prevention Food and Drug Administration <LS.HS.Systems.Delivery.GovNonProfit-P03-01.jpg> U.S. Department of Health and Human Services The U.S. Department of Health and Human Services is a national health agency. Its goal is to protect the health of American citizens and to provide essential human services, especially for those who cannot help themselves. The Department of Health and Human Services is broken into several divisions to help meet the many demands of the agency’s goal. The National Institute of Health and the Center for Disease Control and Prevention both research the cause, spread, and control of diseases. The Food and Drug Administration regulates food and drug products that are sold to the public. The Agency for Health Care Policy and Research identifies standards for treatment in health care facilities. Many additional agencies are formed at the state, county, and local levels. These smaller agencies use guidelines from the Department of Health and Human Services to provide health services to communities.

Nonprofit Agencies Focus on one disease or group of diseases. Research, search for a sure, promote public awareness, and provide services to victims. Supported by donations, membership fees, fundraisers, and government grants. Examples include: American Cancer Society American Heart Association American Red Cross <LS.HS.Systems.Delivery.GovNonProfit-P05-01.jpg> Nonprofit Agencies Nonprofit agencies also play a big role in the health care industry. They are supported by donations, membership fees, fundraisers, and government grants. Nonprofit agencies often focus on a certain disease or group of diseases. They research the disease, search for a cure, and promote public awareness. They also provide services for victims of the disease. The American Cancer Society, the American Heart Association, and the American Red Cross are examples of nonprofit agencies.

Organizational Structure An organizational structure helps a facility run smoothly by outlining the responsibilities of employees. Four divisions: Informational Support Diagnostic Therapeutic <LS.HS.Systems.Delivery.Structure-P01-01.jpg> Organizational Structure Every health care facility must have an organizational structure. An organizational structure helps a facility to run smoothly by outlining the responsibilities of the employees. The structure may be complex or simple. The organizational structure will vary depending on the facility. This organizational chart indicates four divisions within a health care facility: Informational, Support, Diagnostic, and Therapeutic. Each division is broken into several key functions.

Line of Authority The line of authority determines a worker’s position in a facility’s organizational structure. The line of authority also establishes levels of supervision. <LS.HS.Systems.Delivery.Structure-P03-01.jpg> Line of Authority A line of authority must be decided for every department within a health care facility. The line of authority determines a worker’s position in a facility’s organizational structure. The line of authority also establishes levels of supervision. Health care workers must report to their immediate supervisor with questions or problems. If the immediate supervisor is unavailable, the problem should be resolved with the next level of supervision. This organizational chart shows the line of authority for a typical nursing department in a hospital. For example, registered nurses report issues to the head nurse. However, medical assistants should report to a licensed practical nurse.

Medical Office Structure The organizational structure and line of authority at a community medical office is different from a large medical facility. The doctor is the primary supervisor at a medical office. <LS.HS.Systems.Delivery.Structure-P05-01.jpg> Medical Office Structure The organizational structure and line of authority at a community medical office is likely to be much different from a large medical facility. The doctor is the primary supervisor at a medical office. However, most medical offices employ an office manager to help oversee the daily functions within the office. This organizational chart shows the structure and line of authority at a medical office. If a medical assistant has a problem, the issue should be resolved with the supervising registered nurse. However, if the registered nurse is not available, the problem may be discussed with the office manager.

Interdependence All members of the health care team are dependent on each other. If one worker does not fulfill the required duties, the entire team is hindered. <LS.HS.Systems.Delivery.Structure-P10-01.jpg> Interdependence Every health care worker is part of the health care team. All members of the team are dependent on each other. This means that if one worker does not fulfill the required duties, the entire team is hindered. Patients do not receive the quality care that they deserve when the team does not function properly. This connection among workers is called interdependence. Imagine what might happen if the secretary at a medical office stopped answering the telephone. Patients would not be able to make appointments, and the team would not be able to perform its duties. Or imagine what could happen if the housekeeping department stopped cleaning. Many patients would feel uncomfortable receiving treatment in a dirty facility. In addition, patients and health care workers would be at risk of getting infections.

Trends Technology Epidemiology Geriatric Care Wellness Cost Containment <LS.HS.Systems.Deliver.Trends-P01-01.jpg> Trends The health care industry is constantly evolving. Nearly every day researchers find ways to improve the medical system. Health care workers must become lifelong learners. They must be flexible and open-minded to change. Current trends in health care can be found in many areas, including: Technology Epidemiology Geriatric care Wellness Cost Containment

Technology Computers and audiovisual devices Telemedicine “Long distance” surgery <LS.HS.Systems.Delivery.Trends-P02-01.jpg> Technology The use of technology in medicine has grown significantly during the 20th and 21st centuries. Technology has changed the way health care systems operate. Computers and audiovisual devices have increased the availability of services to many people. Telemedicine, for example, allows patients all over the world to consult with doctors through cameras and TV screens. Digital medical equipment can be installed in a patient’s home. The equipment can then send vital data directly to a nurse. Also, surgeons can use computerized, robotic arms to operate on patients that are in other locations. These types of advances have made health care services more efficient and convenient.

Epidemiology Epidemiology is the study of diseases. Many researchers are focusing of diseases that are influenced by lifestyle factors. Taking responsibility for one’s own health is a growing trend in today’s world. <LS.HS.Systems.Delivery.Trends-P03-01.jpg> Epidemiology Epidemiology is the study of diseases. Vaccinations have been developed for many contagious, or communicable, diseases that devastated populations in the past. As a result, researchers have shifted their focus to diseases that are influenced by lifestyle factors and genetics, such as cancer and heart disease. However, one communicable disease that is still under research is acquired immune deficiency syndrome. The impact of AIDS is so great that it is a primary focus of today’s health care. In addition, epidemiological studies are often available to anyone with a computer or access to a library. The Internet and medical journals provide a wealth of information for those who are willing to research. People have more access to medical information today than ever before. This knowledge gives people a better understanding of their personal health. Taking responsibility for one’s own health is a growing trend in today’s world.

Geriatric Care Because people are living longer, geriatric care is in high demand. Geriatric facilities have developed quickly in recent years: Adult day care centers Independent living facilities Retirement communities Nursing homes <LS.HS.Systems.Delivery.Trends-P04-01.jpg> Geriatric Care Because of medical advances, people are living longer. The elderly require more frequent and more extensive health care than younger people. Therefore, care for the elderly is in high demand. Facilities such as adult day care centers, independent living facilities, retirement communities, and nursing homes have developed quickly during recent years. The need for geriatric care is certain to increase in the coming years as the average age of the population continues to increase. The health care industry must be prepared to handle this growth.

Wellness Change in focus from “sick care” to “health care.” Wellness centers include: Weight control facilities Health food stores Nutritional services Stress reduction counseling Habit cessation management <LS.HS.Systems.Delivery.Trends-P08-01.jpg> Wellness Wellness is another trend in the health care industry. During the 1990’s, medical facilities began to change their focus from “sick care” to “health care.” The change of focus resulted in a push for wellness awareness. Wellness can be described as total good health. There are many factors to wellness, including physical, emotional, social, intellectual, and spiritual. As a result of wellness awareness, many people have begun making new lifestyle choices. Health care facilities have developed wellness centers to help people make healthy decisions. These centers include: Weight control facilities Health food stores Nutrition services Stress reduction counseling Habit cessation management

Cost Containment Outpatient Services – Reduce the length of hospital stays to reduce costs. Preventive Care – Get regular check-ups and vaccinations to prevent illness. Energy Conservation – Use energy-efficient lighting, solar power, and automatic faucets. <LS.HS.Systems.Delivery.Trends-P06-01.jpg> Cost Containment The cost of health care is rising. Technology has led to medical efficiency, but it has also greatly increased the cost of services. Cost containment has become a recent focus in health care agencies. The following list includes methods used to reduce health care expenses. Outpatient Services: Hospital stays are expensive. Therefore, health care facilities are now treating more people as outpatients. By reducing the length of hospital stays, facilities are able to reduce the cost of service. Advanced technology has also helped to make outpatient treatment more manageable. Preventive Care: Preventing an illness is much cheaper than treating one. In recent years, there has been a push towards preventive care. Preventive care includes regular check-ups, vaccinations, and patient awareness. Energy Conservation: Health care agencies pay huge bills for electricity, water, and other utilities. Therefore, the cost of health care has increased to help cover the expense of these utilities. Many facilities have begun carefully conserving energy to reduce costs. Energy can be conserved by watching the temperature, recycling, and using automatic faucets, solar power, and energy-efficient lighting.

Health Insurance The rising cost of health care is good for the economy, but the expenses are a burden for most individuals and families. In the 1920’s, the United States developed a system of health insurance to help cover the cost of medical expenses. <LS.HS.Systems.Insurance.General-P01-01.jpg> Health Insurance Health care is a profitable industry in the United States. In fact, health care expenses make up almost 15 percent of the United States’ gross national product. The rising cost of health care is good for the economy, but the expenses are a burden for most individuals and families. In the 1920’s, the United States developed a system of health insurance to help cover the cost of medical expenses. Health coverage is offered by private health insurance agencies. Individuals make payments to the agencies. When medical services are needed, the agency covers part or all of the expenses. The amount of coverage varies according to the insurance policy.

Health Insurance Terms Premium – the amount paid to an insurance agency for a health insurance policy Deductible - the amount that must be paid by the patient before the insurance agency will begin to make payments Co-payment - an amount paid by the patient for a certain service Out-of-pocket - a medical bill that must be paid by the patient <LS.HS.Systems.Insurance.General-P02-01.jpg> Health Insurance Terms The following terms are important in the health insurance system: Premium: The premium is the amount paid to an insurance agency for a health insurance policy. The premium is often paid on a monthly basis. Deductible: The deductible is the amount that must be paid by the patient before the insurance agency will begin to make payments. Deductibles are paid on a yearly basis. The amount of the deductible is set by the type of policy that is purchased. Some policies may have a deductible of $500 or $1000 each year. Other policies may not require any deductible payment. Co-payment: A co-payment is an amount paid by the patient for a certain service. For example, many insurance agencies require a $15 or $20 co-payment for every visit to the doctor. Out-of-Pocket: An out-of-pocket expense is a medical bill that must be paid by the patient. Many health insurance policies have a limit to the amount of out-of-pocket expenses to be paid by the patient during a year.

Individual and Group Insurance Individual insurance is when a person purchases a policy and agrees to pay the entire premium for health coverage. Group insurance is generally purchased through an employer. The premium is split between the employer and the person being insured. <LS.HS.Systems.Insurance.General-P04-01.jpg> Individual and Group Insurance Health insurance policies may be purchased in two basic forms, individual and group. Individual insurance is when a person purchases a policy and agrees to pay the entire premium for health coverage. Group insurance is generally purchased through an employer. The premium is split between the employer and the person being insured. Medical insurance is an important benefit of employment. Group insurance is almost always less expensive than individual insurance.

Indemnity Insurance In indemnity insurance, patients must pay for all health care expenses out of their own pockets. Afterward, the insurance agency will reimburse the patient for a percentage of the expenses. Indemnity insurance does not work for everyone. Many people cannot afford to pay for their medical expenses out-of-pocket. <LS.HS.Systems.Insurance.General-P06-01.jpg> Indemnity Insurance In the early years of health insurance, most policies were in the form of an indemnity policy. In indemnity insurance, patients must pay for all health care expenses out of their own pockets. Afterward, the insurance agency will reimburse the patient for the expenses. In some indemnity policies, the total expense will be reimbursed. However, most indemnity policies reimburse only a percentage of the total expense. A typical amount for reimbursement is 80%. Indemnity insurance does not work for everyone. Some people cannot afford to pay for their medical expenses out-of-pocket and then wait for reimbursement. As a result, a new type of medical insurance became popular in the 1970’s. It is called managed care.

Managed Care Two primary concepts of managed care: To promote good health To practice preventive medicine Managed care plans offer medical services through a system of health care providers. The system of providers offers services at reduced rates. <LS.HS.Systems.Insurance.General-P07-01.jpg> Managed Care Managed care is built on two primary concepts: to promote good health and to practice preventive medicine. The goal is to reduce the cost of medical expenses by maintaining a healthy lifestyle. Managed care plans offer medical services through a system of health care providers. The system of providers offers services at reduced rates. People who are insured through a managed care plan must receive treatment from physicians within this system in order to get the reduced cost.

Reimbursement Health insurance agencies do not always reimburse the full amount charged for services. Physicians will either “absorb” the loss, or they will charge the patient for the amount that was not paid by the insurance agency. <LS.HS.Systems.Insurance.General-P11-01.jpg> Reimbursement Health insurance agencies do not always reimburse the full amount charged for services. Physicians may charge any amount for the services they provide. However, insurance agencies may have a set limit for the amount that they will reimburse. For example, a doctor may choose to charge $200 for a routine check up. However, an insurance agency may have a set limit of $150 for a routine check up. The remaining $50 may be covered in one of two ways: The doctor will “absorb” the loss. This means that the doctor will drop the $50 charge and accept $150 from the insurance company as full payment for the check up. The doctor will charge the patient for the remaining $50. In this way, the doctor will receive the full $200 payment for the check up. It is important for patients to be proactive with their health care. They must ask questions and research reimbursement amounts. Otherwise, patients may be required to pay a portion of the bill.

Managed Care Health Maintenance Organizations Preferred Provider Organizations Point of Service <LS.HS.Systems.Insurance.ManagedCare-P01-01.jpg> Managed Care Managed care offers reduced rates for medical services through a network of health care providers. There are several types of managed care providers. The three basic types are: Health Maintenance Organizations Preferred Provider Organizations Point of Service

Health Maintenance Organizations Clients must pay a premium, deductible, and co-payments. Clients must visit in-network doctors and select a primary care physician. HMOs urge clients to practice healthy living and to receive preventive treatments. <LS.HS.Systems.Insurance.ManagedCare-P02-01.jpg> Health Maintenance Organizations Health Maintenance Organizations, or HMOs, are a common type of managed care. In an HMO, the person being insured pays a monthly fee, or premium. After the person has paid the deductible or co-payment, medical services are provided by a network of physicians. If the person receives medical services from a physician that is not in the network, the HMO will not cover the expenses. Many HMOs also require the insured person to select one primary care physician, or PCP. The person must visit the selected physician for all check-ups and procedures. If it is necessary for the person to see a specialist, the primary care physician must give approval first. However, if the person is in an emergency situation, pre-approval is not required. It is much cheaper to prevent an illness than to treat an illness. Therefore, HMOs urge their clients to practice healthy lifestyles. They also encourage their clients to visit the doctor regularly for check-ups. One benefit of HMOs is that the cost of routine doctor exams and preventive care is included.

Preferred Provider Organization Clients must pay a premium, deductible, and co-payments. Clients do not have to choose a primary care physician. Clients may visit non-network physicians, but coverage is greater with in-network physicians. PPOs often have other fees and co-payments. <LS.HS.Systems.Insurance.ManagedCare-P04-01.jpg> Preferred Provider Organization A Preferred Provider Organization, or PPO, is another type of managed care. The insured persons must pay a monthly premium to purchase the plan. Unlike HMOs, PPOs do not require that insured persons receive treatment from a specific network of physicians. An insured person may choose a non-network physician. However, coverage will be greater if an in-network physician is chosen. For example, services at an in-network physician may be covered at 100% after the deductible and co-payment. But services from a non-network physician may only be covered at 80% after the deductible and co-payment. This means that a person receiving care from a non-network physician must pay the remaining 20% of expenses out-of-pocket. Additionally, PPOs often have other fees, such as a co-payment for hospital stays. Another way that PPOs differ from HMOs is that PPOs do not require insured persons to select a primary care physician. Because there is no primary care physician, pre-approval for specialists is not required.

Point of Service Clients must pay a premium. Clients must chose a primary care physician. For in-network physicians, there is usually no deductible and co-payments are low. Specialists may be non-network physicians, but coverage may be limited. <LS.HS.Systems.Insurance.ManagedCare-P06-01.jpg> Point of Service Point of Service, or POS, plans are often considered a type of HMO. However, because of their increasing popularity in recent years, POS plans have developed into their own division of medical coverage. Insured persons must pay a monthly premium to purchase a POS plan. In addition, POS plans require insured persons to select a primary care physician. The physician must pre-approve visits to specialists. But specialists may be non-network physicians. Like a PPO, coverage may be limited for a non-network physician. Also, most POS plans require that a co-payment and a deductible are paid for non-network services. However for in-network services, there is no deductible and co-payments are low.

Socio-Economics Socio-economics is the study of how economics is affected by society, culture, and politics. Socio-economics has revealed the need for medical assistance for the elderly, disabled, and poor. <LS.HS.Systems.Insurance.Government-P01-01.jpg> Socio-Economics Socio-economics is the study of how economics is affected by society, culture, and politics. Socio-economics shows that there is a link between poverty and poor health. Those who cannot afford doctor visits, medicine, vaccinations, and other medical treatments are more likely to become sick than those who can afford these services. Many people purchase health insurance through their employer. The employer and the employee split the premium payment. This system makes the expense of health insurance more manageable. However, people who are not employed do not have these medical benefits. Likewise, not all employers offer health coverage for their employees. Individual insurance policies can be expensive, and many people cannot afford to purchase them. Socio-economics has revealed the need for medical assistance for the elderly, disabled, and poor.

Government Programs In the 20th century, the United States government began to realize the need for public medical assistance. In 1965, President Lyndon B. Johnson instituted two medical assistance programs to help those without health insurance. Medicaid Medicare <LS.HS.Systems.Insurance.Government-P03-01.jpg>. Government Programs In the 20th century, the United States government began to realize the need for public medical assistance. In 1965, President Lyndon B. Johnson instituted two medical assistance programs to help those without health insurance. These programs are called Medicaid and Medicare.

Medicaid Need-based program Designed by the federal government, but administered by state governments Provides medical assistance to individuals and families who are determined by the state to be “needy.” Each state must determine its own definition of “needy.” <LS.HS.Systems.Insurance.Government-P04-01.jpg> Medicaid Medicaid is a need-based program that was designed by the federal government. However, it is administered by state governments. Medicaid is a voluntary program, which states may or may not choose to participate in. Medicaid provides medical assistance to individuals and families who are “needy.” Each state must determine its own definition of “needy.” Typically, needy individuals include: Low-income families with young children Pregnant women in low-income families Families with adopted or foster children Blind or disabled adults Adults with certain chronic or debilitating diseases Adults who receive social security benefits

Medicaid Service Services typically include: Hospital services Prenatal care Child vaccines Pediatric services Physician services Diagnostic testing and X-rays Rehabilitation and physical therapy Prescription drugs Home health care <LS.HS.Systems.Insurance.Government-P05-01.jpg> Medicaid Services In addition to deciding who qualifies for Medicaid, states must also define the type, amount, duration, and scope of the services. Services vary from state to state, but they typically include: Inpatient and outpatient hospital services Prenatal care Child vaccines Pediatric services Physician services Diagnostic testing and X-rays Rehabilitation and physical therapy Prescription drug coverage Home health care

Medicaid Limits Medicaid is not guaranteed to every low-income individual. If a low-income individual does not have children or is not disabled, this person may be unable to receive any medical insurance. <LS.HS.Systems.Insurance.Government-P06-01.jpg> Medicaid Limits It is important to know that Medicaid is not guaranteed to every low-income individual. In fact, studies show that 40% to 60% of the poor do not qualify for Medicaid. If a low-income individual does not have children or is not disabled, this person may be unable to receive any medical insurance.

Medicare Entitlement program for any citizen age 65 or older Administered by the federal government After an individual pays a deductible, Medicare will cover 80% of all medical expenses. <LS.HS.Systems.Insurance.Government-P08-01.jpg> Medicare Medicare is a program that is administered by the federal government. Unlike Medicaid, which is a needs-based program, Medicare is an entitlement program. This means everyone age 65 or older is entitled to Medicare insurance. Medicare is also available to some people under the age of 65 with certain disabilities. Medicare will not cover all of an individual’s health care expenses. The insured persons are required to pay a yearly deductible. After the deductible, Medicare will cover 80% of all expenses. This means that insured persons must pay the remaining 20%. Many people cannot afford to pay the 20% charge. An additional form of insurance called Medigap may be purchased to help cover the remaining expenses.

Medicare Services Part A: Hospital Care Part B: Outpatient Services Hospitalization Skilled nursing facilities Home health care Hospice care Long-term care facilities Part B: Outpatient Services Medical expenses, including therapy, medical equipment, and testing Preventive Care <LS.HS.Systems.Insurance.Government-P09-01.jpg> Medicare Services Medicare is divided into Part A and Part B. The following services are provided by these parts: Part A: Hospital Care Hospitalization Skilled nursing facilities Home health care Hospice care Long-term care facilities Part B: Outpatient Services Medical expenses, including physician services, physical therapy, occupational therapy, speech therapy, medical equipment, and diagnostic testing Preventive care