© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 1

2 10 C H A P T E R THE FINANCIAL HEALTH CARE ENVIRONMENT

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 3 Key Terms  Bundled Charges  Capitation  Diagnosis Related Groups (DRG)  Fee for Service  Fiscal Intermediary

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 4 Key Terms  Managed Care  Resource Based Relative Value Scale  Self Insured Plans  Third Party Administrator

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 Primary Sources of Reimbursement  Patient  Private insurance  Government

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 6 Supply and Demand  Health care responds to demand.  Also creates demand through marketing  Marketing targets providers and patients (Figure 10-3).  Many regulations also affect care (Table 10-1).

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 7 Growth in Promotional Spending Source: Kaiser Foundation, 2004 Supply and Demand (cont.)

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 8 Pricing and Cost  Pricing is very complex.  Costs are rising rapidly (Figure 10-5).  Managed care is a response to high costs.  Prospective payment systems also contain costs.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 9 Source: California Health Care Foundation, 2005 Pricing and Cost (cont.)

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 10 Cost, Quality, and Access  U.S. spends more money on health care than other countries.  Health care quality is not the best.  High numbers of uninsured are a problem.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 Pay for Performance  Paying for quality and efficiency  Shifts financial risk to provider  Providers may focus on patients that meet the outcome.  Different payers may have different expectations.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 12 Consumer Directed Health Plans  Shifts risk to patients (Figure 10-8)  High Deductible Plans  Tiered Benefit Plans  Health Reimbursement Accounts  Health Savings Accounts

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 13 Providers Joining Forces  Specialty Hospitals/Outpatient Surgery Centers  Emphasis on service and outcomes  Joint Ventures  Creating strategic and efficient alliances

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 14 Other Health Care Trends  Care or disease management  Regional Health Information Organizations (Figure 10-7)  Price Transparency  Charity Care  Changing Population Demographics

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 15 An example of a Regional Health Information Organization Other Health Care Trends (cont.)

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 16 Nursing Implications  Increasing demand for nurses  Advancing technologies  Emphasis on care management  Focus on prevention  More care provided outside of the hospital