Management & Health Delivery Systems (MGMS-101) By Dr. Hoda Zaki Prof. Hospital Administration Chair Department of Health Administration &Behavioral Sciences High Institute of Public Health University of Alexandria 1 Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration

Intended Learning Outcomes (ILOs) By the end of this lecture the student will be able to : 1.Define the paying system for individual providers: A.Fee for services reimbursement B.Capitation C.Salaried reimbursement 2.Understand hospital prospective payment. 3.Identify the principles of health insurance. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 2

Paying System for Individual Providers A.Fee for services reimbursement B.Capitation C.Salaried reimbursement Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 3

Fee for Services R eimbursement  Health providers are paid a discrete fee for each specific service that is provided to patient.  Services may be : A.office visit or procedure B.A set of procedures such as delivery ( procedure, pre- operative & post-operative care) Relative value scales are used to weigh the time & complexity for each services, for example : coronary artery bypass procedure might be equivalent to 5 appendectomies. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 4

Cont., Fee for Services Reimbursement  The main problem of fee for services is the provision of more services to increase the total amount of fee received. ( more lab. Tests, visits, procedures, etc..)  Hybrid reimbursement is used to ovoid unnecessary services.  Hybrid reimbursement include the combination of fee for services with contractual agreements defining the level of reimbursement. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 5

Capitation  GP is paid a set fee,usually monthly, for each patient on his "list", capitation can be adjusted for patient characteristics such as age and gender.  Gp’s fee is not related to the volume of services provided.  GP may register too many patients and under-serve them, and select the better risks.  Capitation may lead to the reluctance of providers to offer patients the required care,so patient satisfaction survey & quality control is important. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 6

Salaried Reimbursement  A provider is paid a set monthly or annual salary, usually in governmental organization.  The salary is not dependent on the number of patients seen, the quantity of services provided or the number of procedures performed.  Salary is adjusted for number of working hours, experiences, specialties and administrative duties. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 7

Cont., Salaried Reimbursement  The problems of salary reimbursement are:  low productivity  excessive referrals to secondary providers  lack of attention to the preferences of patients  Monitoring measures are necessary to ensure an adequate level of effort. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 8

Hospital Prospective Payment  Hospitals are paid a set of pre-established fee for each patient admitted to the hospital. The fee depends on the diagnosis.  The advantage of prospective payment :  no unnecessary services,  hospitals are cost conscious so may discharge patient too early ‼.  The problem of prospective payment:  hospitals are cost conscious so may discharge patient too early ‼.  Hospital may assigning more expensive diagnosis too increase profitability Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 9

The Principles of Health Insurance  Insurance is designed to spread risk among a large number of people.  Insurance is designed to protect against unwanted, unexpected events.  Health insurance is a contractual agreement between insured people & insurer company, all aspects of insurance coverage (benefits) are defined by contract.  Insured people pay a premium which is the fee paid by enrollee & receive benefits defined by contract.  The premium may be paid monthly, quarterly or annually directly by an individual or by an employer on behalf of employee. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 10

Cont., The Principles of Health Insurance  Health insurance plans are offered to individuals who meet specific criteria such as national health insurance in Egypt which is offered to civil employees. Now it covers retired people, students & family of employees. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 11

Cont., The Principles of Health Insurance  Insurance companies can offer group plans or individual plans.  Group plans are offered under master contacts to a group of people such as employees.  Individual plans are offered to an individual not associated with group.  Insurance companies are concerned about selection of risk for individual plans, so the company exclude any one with a history of cancer or serious cardiovascular disease.  In group,risk is spread across many more people. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 12

Cont., The Principles of Health Insurance  Each employee paid a monthly premium & he receive benefits specified in the contract.  Some Health Insurance plans cover hospital, ancillary services & ambulatory services and medication.  Some Health Insurance plans cover accident.  Benefits can be restricted to protect the insurance company against excess utilization or high cost of some services such as cosmetic surgery, some dental procedures, etc. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 13

Cont., The Principles of Health Insurance  Benefits can be limited in dollar or a number of services such as 10 physician visits per year, 1000 LE for medications.  Copayments for some services limits over-utilization of such services.  The premium is the fee paid by enrollee.  The premium may be paid monthly, quarterly or annually directly by an individual or by an employer on behalf of employee. Prof.Dr.Hoda Zaki (MD PHD) Prof. Hospital Administration 14

Thank you