© 2007 Thomson - Wadsworth Chapter 1 Health Care Systems and Reimbursement

© 2007 Thomson - Wadsworth Overview Health Care Facilities in the U.S. Preventive & Primary Health Care Services Secondary & Tertiary Care Restorative Care Long-Term Care

© 2007 Thomson - Wadsworth Overview continued Financing the Health Care Industry Private Insurance Traditional Fee-for-Service Plans Group Contract Insurance Public Insurance The Medicare Program –Medicare Part A –Medicare Part B –Coverage Gaps

© 2007 Thomson - Wadsworth Overview continued The Uninsured Demographic Trends in Health Care The Need for Health Care Reform The High Cost of Health Care Efforts at Cost Containment Equity & Access as Issues in Health Care Racial & Ethnic Disparities in Health

© 2007 Thomson - Wadsworth Overview continued Health Care Reform in the United States Nutrition as a Component of Health Care Reform The Cost-Effectiveness of Nutrition Services

© 2007 Thomson - Wadsworth

Preventive & Primary Health Care Services Prevention of illness & chronic disease Nutrition Facilities Health departments Clinics & physician’s offices Schools Professional, nonprofit & volunteer organizations

© 2007 Thomson - Wadsworth Secondary & Tertiary Care Diagnosis & treatment of illness Acute care Tertiary care Expert Technical Highly specialized Facilities Traditionally hospitals Physicians’ offices Outpatient facilities Urgent care Surgical units Emergency rooms

© 2007 Thomson - Wadsworth Hospital Classifications See Box 1-2 Public not-for-profit Private not-for-profit Private profit Veterans’ and military

© 2007 Thomson - Wadsworth Nutrition in Secondary & Tertiary Care Examples: Celiac disease Hypertension Artherosclerosis Myocardial infarction Congestive heart failure

© 2007 Thomson - Wadsworth Restorative Care Care for recovery from acute or chronic illness Nutrition Facilities Long-term care Rehabilitation facilities Outpatient clinics Home health services

© 2007 Thomson - Wadsworth Long-Term Care Maintenance, custodial & health services for the chronically ill or disabled Nutrition

© 2007 Thomson - Wadsworth Health Insurance

© 2007 Thomson - Wadsworth Private Insurance Traditional fee-for-service Fee per service rendered 10% of insurance coverage today

© 2007 Thomson - Wadsworth Private Insurance continued Group contract insurance Managed care system Health maintenance organizations (HMOs) –Capitation –General HMO models »Staff model »Group model »Network model »Independent practice association Preferred provide organizations (PPOs)

© 2007 Thomson - Wadsworth

Public Insurance Medicare Medicaid SCHIP HIPAA Workers’ compensation

© 2007 Thomson - Wadsworth

Providers of Public Insurance Centers of Medicare & Medicaid Services Department of Veterans Affairs Public Health Services Indian Health Service Department of Defense Civilian Health & Medical Program of the Uniformed Services CHAMPUS Public hospitals & community health centers State & local public health programs

© 2007 Thomson - Wadsworth Medicare 1965 Title XVIII of Social Security Act Administered by CMS of Department of Health & Human Services

© 2007 Thomson - Wadsworth Eligibility 65 years of age or older Any age with end-stage renal disease Eligible for Social Security or Railroad Retirement Board disability benefits up to 24 months Medicare-covered government employment prior to retirement

© 2007 Thomson - Wadsworth Medicare Part A Hospital Insurance Inpatient hospital, skilled nursing facility, & some home health Deductibles & coinsurance fees Hospital inpatient charges reimbursed according to prospective payment system (PPS) Diagnosis-related groups (DRGs)

© 2007 Thomson - Wadsworth Medicare Part B Medical insurance Optional program Provides benefits for Eligible physician services Outpatient hospital services Certain home health services Durable medical equipment Nutrition Medical Nutrition Therapy Current procedural terminology (CMT) Enrolled Medicare MNT providers bill for Diabetes mellitus Nondialysis kidney disease Post-kidney transplant

© 2007 Thomson - Wadsworth Medicare savings after 3 years of reimbursement of nutrition services

© 2007 Thomson - Wadsworth Coverage Gaps Prescription drug coverage Skilled nursing & long-term institutional care > 100 days Medicare Modernization Act of 2003 Optional coverage Drug discount cards/prescription drug plans Additional preventive benefits Medigap Policy Supplemental policy from private insurance companies

© 2007 Thomson - Wadsworth Medicaid Entitlement program Joint state & federal program 1965 Title XIX of the Social Security Act

© 2007 Thomson - Wadsworth Eligibility Low incomes Certain pregnant women & children with low incomes Older adults, the blind & people with disabilities Members of families with dependent children in which one parent is absent, incapacitated or unemployed

© 2007 Thomson - Wadsworth Eligibility continued Determined by states Three criteria Income Below federal poverty guidelines Categorical Member of family with dependent children Older adult Blind Disability Resource

© 2007 Thomson - Wadsworth Coverage Inpatient & outpatient hospital services Physician, pediatric/family nurse practitioner Nurse-midwife services Selected health center & rural health clinic services Prenatal care & family planning Child vaccination & services for those under 21 years of age Laboratory & X-ray services Skilled nursing home & home health services

© 2007 Thomson - Wadsworth State Children’s Health Insurance Program Title XXI in the Balanced Budget Act of 1997 Children of working families with incomes too high to qualify for Medicaid but too low to afford private health insurance SCHIP

© 2007 Thomson - Wadsworth SCHIP Enrollment

© 2007 Thomson - Wadsworth Coverage Inpatient & outpatient hospital services Physicians’ surgical & medical services Laboratory X-ray services Well baby/child care services

© 2007 Thomson - Wadsworth The Uninsured Employed uninsured Nonworking uninsured Emergency room Resulting cost shift to the insured by the increase in overall medical costs

© 2007 Thomson - Wadsworth Percentage of Uninsured in U.S.

© 2007 Thomson - Wadsworth Demographic trends in health care Aging population of baby boomers Require care for greater number of years Rise in amount of medical care required Increase in Hispanic population

© 2007 Thomson - Wadsworth Elderly needing long- term care

© 2007 Thomson - Wadsworth Health Care Reform Success of health care system Cost Quality Access Challenges Accessible to all Contain costs Provide nursing home care Ensure that Medicare & Medicaid can serve eligible people

© 2007 Thomson - Wadsworth High costs of health care Aging population Increased demand Medical advances Administrative costs of insurance process Professional liability costs

© 2007 Thomson - Wadsworth

National health expenditures in billions of dollars,

© 2007 Thomson - Wadsworth Cost Containment Efforts Slowing hospital construction Modifying reimbursement Reducing length of stays Increasing co-payments & deductibles Challenging eligibility requirements for Medicaid

© 2007 Thomson - Wadsworth Cost Containment Efforts Requiring second opinions to reduce unnecessary surgery Restricting access to new technology Encouraging alternative delivery systems Emphasizing prevention Generic drugs

© 2007 Thomson - Wadsworth

Resulting Trends Movement away from traditional fee-for-service Companies choosing self-insured health plans to avoid cost shifting Payers setting reimbursement restrictions & limitations Prospective payment system (PPS) Diagnosis Related Groups (DRGs) ICD-9-CM

© 2007 Thomson - Wadsworth

Racial & Ethnic Disparities in Health Healthy People Initiative

© 2007 Thomson - Wadsworth Health Care Reform in the U.S. Health insurance reform Physician malpractice reform Incentives to induce businesses to include health promotion initiatives in their insurance plans Preventive component vs. chronic disease as typical focus of allopathic medicine

© 2007 Thomson - Wadsworth Nutrition in Health Care Reform Good health does not exist without proper nutrition.

© 2007 Thomson - Wadsworth Cost Effectiveness of Nutrition Services Well documented Develop guidelines or protocols that specify appropriate care for conditions or diseases Measure outcomes Documentation

© 2007 Thomson - Wadsworth