1. Chapter 6 Structure and Economics of Community Health Services

2. Historical Influences
1500 BC: Hebrew hygienic code: personal and community sanitation
1000 to 400 BC: Athenian emphasis on personal hygiene, diet, and exercise
Romans: environmental sanitation laws, aqueducts, & sub-surface drainage
Middle Ages: body thought of as evil, leading to neglect of sanitation & development of epidemics; quarantine
1800s: in England, enforcement of laws for sanitation; development of view of public health responsibility at community level

3. Public Health Care System Development in the U.S.
Understanding of the relationship between living conditions and health (see Table 6.1)
Precursors to a health care system: need for systems to address community issues (see Table 6.2)
Calls for sanitary reforms (Shattuck Report)
Recent calls to action (Institute of Medicine)

4. Public Health Care System Development in the U.S. (cont.)
Official health agencies (government-funded; later called public health agencies)
Voluntary health agencies (private agencies or nongovernmental organizations [NGOs]; privately funded)
Health-related professional associations (NPHA, ASDTDN, ASTHO, ANA, ACHNE)

5. Health Organizations in the U.S.
Four levels: local, state, national, and international
Each level generally classified as public or private
Public sector health services (see Fig. 6.3)
Local: vary depending on needs, size, and resources of the community
State: vary in structure and how core functions are carried out; most pivotal role in health policy formation
National: Public Health Service; 8 functional branches: CDC, FDA, NIH, SAMSHA, HRSA, AHRQ, Indian Health Service, ATDSR

6. Question Is the following statement true or false?
Voluntary health agencies are typically funded by the government.

7. Answer
False
Official health agencies are government-funded; voluntary health agencies are privately funded.

8. Health Organizations in the U.S. (cont.)
Private sector health services
Proprietary health services: privately owned and managed
For-profit
Not-for-profit
Functions
Detecting unserved needs or exploring better methods for meeting needs already addressed
Piloting or subsidizing demonstration project
Promoting public knowledge
Promoting health legislation

9. Health Organizations in the U.S. (cont.)
Private-sector health agencies
Functions
Assisting official agencies with innovative programs not otherwise possible
Evaluating official programs; assuming public advocacy role
Planning and coordinating to promote collaboration among voluntary services and between voluntary and official agencies
Developing well-balanced community health programs for more relevant and comprehensive services

10. International Health Organizations
World Health Organization
Pan American Health Organization
UNICEF
UNESCO

11. Significant Legislation
Shepard-Towner Act of 1921
Social Security Act of 1935
Hill-Burton Act (Hospital Survey and Construction Act) of 1946
Maternal and Child Health and Mental Retardation Planning Amendments of 1963
Heart Disease, Cancer, and Stroke Amendments of 1965
Social Security Act Amendments of 1965

12. Significant Legislation (cont.)
Comprehensive Health Planning and Public Health Service Amendments Act (Partnership for Health Act) of 1966
Health Manpower Act of 1968
Occupational Safety and Health Act of 1970
Professional Standards Review Organization Amendment to the Social Security Act of 1972
Health Maintenance Organization Act of 1973
National Health Planning and Resource Development Act of 1974

13. Significant Legislation (cont.)
National Center for Health Statistics of 1974
Omnibus Budget Reconciliation Act of 1981
Social Security Amendments of 1983
Consolidated Omnibus Budget Reconciliation Act of 1985
Omnibus Budget Reconciliation Act Expansion of 1986
Medicare Catastrophic Coverage Act of 1988
Family Support Act of 1988

14. Question Is the following statement true or false?
Proprietary health services can be for-profit or not- for-profit.

15. Answer
True
Proprietary health services are privately owned and managed and can be nonprofit or for-profit.

16. Significant Legislation (cont.)
Health Objectives Planning Act of 1990
Preventive Health Amendments of 1992
Personal Responsibility and Work Opportunity Reconciliation Act of 1996
Health Insurance Portability & Accountability Act (HIPAA) of 1996
Nurse Reinvestment Act of 2002
Medicare Prescription Drug, Improvement, and Modernization Act of 2003

17. Economics of Health Care
Interaction of two basic theories
Microeconomics
Supply & demand
Allocation & distribution
Macroeconomics
Broad variables that affect the status of the total economy
Focus on employment, income, prices, and economic growth rates
Health insurance concepts

18. Health Care Financing Third-party payments
Private insurance companies (trend toward consumer-driven health plans and health savings accounts)
Independent or self-insured health plans
Government health programs
Medicare, Medicaid, Federal Employees Health Benefits Plan, CHAMPUS
SCHIP
Other government programs

19. Payment Concepts Prospective Retrospective
Fee established in advance
Reimbursed after service rendered
Abused through the requesting and ordering of unnecessary tests
Encouraged sickness rather than wellness
Prospective
External authority sets rates
Rates derived from predictions set in advance
Fixed rates rather than cost coverage
Imposes constraints on spending
Providers at risk for losses or surpluses

20. Trends and Issues Influencing Health Care Economics
High cost of health in America
Cost-control measures
Access to health services
Uninsured
Underinsured
Medical bankruptcies
Managed care

21. Question
Which of the following characterizes retrospective payment for health services?
External authority sets the rates.
Rates of reimbursement vary.
Wellness is encouraged.
Fee is set up in advance.

22. Answer d. Fee is set up in advance.
With retrospective reimbursement, the fee is established in advance and reimbursement occurs after the service is provided. This system also encouraged sickness rather than wellness. Prospective reimbursement involves rates that are set by an external authority, and rates are fixed.

23. Managed Care Types HMOs Preferred provider organizations (PPOs)
Point of service (POS) plans
Health care rationing
Competition and regulation

24. Health Care Rationing Cause Effect Limited resources
Need to establish eligibility for government health care programs
At-risk groups use inequitable amount of limited services
Effect
Restrict people’s choices
Deny access to beneficial services
Exclude enrollees at greatest risk

25. Health Care Reform Possibilities
Managed competition
Pros: Acceptance of all; competition on price; tax incentives; tight regulation; minimum benefits package; outcome management standards board; improved access; expenditure reduction
Cons: Untested; limits consumers’ choices; increased out-of-network costs; failure to provide equitable and universal coverage; opposed by many professional groups

26. Health Care Reform Possibilities (cont.)
Universal coverage and single-payer system
Pros: universal coverage; emphasis on prevention; control of costs; increased access; incentives for efficiency; administrative simplicity; combination of private/public; no tie to employment
Cons: removal of competition model, which ensures a free market, individualism, and the right to choose

27. Question Is the following statement true or false?
A major disadvantage of universal coverage involves tax incentives.

28. Answer
False
Universal coverage is disadvantageous because it removes the competition model, which ensures a free market, individualism, and the right to choose.

29. Effects of Health Economics on Community Health Practice
Disincentives for efficient use of resources
Incentives for illness care
Conflicts with public health issues

30. Implications for CHN Need to adapt to constantly changing system
Development of innovative modes of service delivery
Variety of practice settings
Development of skills in teamwork, leadership, and political activism
Recognition of importance of outcomes

31. Internet Resources
American Nurses Association:
CARE:
Center for Medicaid and Medicare Services:
Joint Commission on Accreditation of Healthcare Organizations:
National Center for Health Statistics:
National Committee for Quality Assurance:
Population Reference Bureau: