Health Care Financing

HCFA defines "physical restraints" under "Interpretive Guidance" in the State Operations Manual as: "any manual method or physical or mechanical device, material, or equipment attached or adjacent to the individual's body that the individual cannot remove easily which restricts freedom of movement or normal access to one's body."

From: Clinical Engineering Handbook , 2004

Health care financing and reimbursement

Tamara S. Ritsema PhD, MPH, MMSc, PA-C/R , in Ballweg's Physician Assistant: A Guide to Clinical Practice , 2022

Introduction

In the past, numerous legislative, public policy, and insurance company-driven initiatives were aimed at fundamentally altering the manner in which U.S. health care is financed and delivered. Although those initiatives may have appeared to be dramatic changes at the time—think back to managed care—the results turned out to be more comparable to marginal modifications to a health care system that seemed to be nearly unmanageable in terms of stemming the rapid increase in costs and an inability to deliver a uniformly high level of quality. In fact, the U.S. health care system remains on an unsustainable financial trajectory. The rate of spending continues to outpace inflation. Meanwhile, despite the amount of money expended, patient health outcomes in the United States often lag behind those of other countries that spend far less.

Comprehensive health care reform was enacted in March of 2010 when the Patient Protection and Affordable Care Act (PPACA) was signed into law. Depending on one's point of view, passage of the Affordable Care Act (ACA) placed the U.S. health care system on a markedly different path. One's political views may well determine whether that trajectory is considered positive or not. Either way, we appear to be entering an era of health system reform that attempts to usher in a structural change to health care financing unlike anything we've seen before.

The way in which physician assistants (PAs), physicians, and other health professionals will be reimbursed for the professional services they deliver is in the midst of unprecedented change. As practices, hospitals, and health systems begin to reinvent themselves and establish new practice and payment models, PAs must understand how they will adapt to a "new normal" in health care.

One of the essential concepts in health care today is value: value-based reimbursement, value-based purchasing, and a shift from fee-for-service to fee for value. Value in health care can have many different meanings depending on who and where you are in the health care system. In the reimbursement arena, value can be described as the health outcome achieved per the dollars allocated. 1 , 2

What is the concept behind value-based reimbursement or value-based payments? It deals with the providing of preventive care and intervention earlier in the disease process, delivering that care in lower cost settings (e.g., in the office or in the patient's home vs. in an acute or urgent care setting) and having health professionals focus on improving both individual and population health. All this has to occur while at the same time reducing the number of avoidable emergency department visits and hospitalizations and reducing hospital readmissions.

The transition toward more innovative health care delivery system concepts such as population health, value-based reimbursement, and bundled and episodic payments continues. The pace of that transformation, however, has been slower than many expected. In fact, despite the efforts of the Medicare program and numerous commercial insurers to move the needle forward, many health care professionals remain substantially entrenched in the world of fee-for-service reimbursement.

Measuring Costs

Theodore H. Tulchinsky MD, MPH , Elena A. Varavikova MD, MPH, PhD , in The New Public Health (Third Edition), 2014

Health Financing: The Macroeconomic Level

Financing health care has evolved from personal payment at the time of service delivery to financing through health insurance (prepayment) by the employer and employee at the workplace. This has progressed in most industrialized countries towards governmental financing through social security or general taxation, supplemented by private and non-governmental organizations (NGOs) (Table 11.3), and personal out-of-pocket expenditures. Ultimately, every country faces the need for governmental funding of health care either for the total population or at least for vulnerable groups such as the elderly and the poor, as in the USA, where governmental funding comes to nearly 50 percent of total health expenditures. Government funding is necessary also for services that insurance plans avoid or are inefficient in reaching, including as community-oriented services and groups at special risk, such as infants and women (see Chapter 13).

TABLE 11.3. Sources of Financing Health Services

Public Private International Aid
Federal, state and local government general revenues; mainly from taxes: income, excise, resources, business, inheritance, value added, capital gains, property, special taxes Private health insurance United Nations affiliates
Social security payroll tax Personal expenditures Foundations
Compulsory health insurance Private donations, bequests Religious organizations
Lotteries Private foundations Other non-governmental organizations
Dedicated taxes: cigarettes, alcohol, gambling Voluntary community service World Bank
User fees Government bilateral aid

Health financing involves not only methods of raising money for health care, but also allocation of those funds. National health expenditures are derived from government and non-government sources and are used to finance a wide array of programs and services. There is competition for funds in any system, and the way in which money is allocated affects not only the way the services are provided but also setting of priorities, as indicated in the "laws" of health economics in Box 11.7.

BOX 11.7

"Laws" of Health Resource Allocation

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Sutton's law – Willy Sutton was a bank robber and when asked by a reporter why he robbed banks, he replied: "Well, that's where the money is". This expression is used to indicate that health services emphasize those aspects which are better financed. If more funds are available for treatment services, and preventive care is relatively underfunded, then treatment will have greater emphasis than prevention.

•

Capone's law – Al Capone, a well-known gangster, planning the division of Chicago among his colleagues, said: "You take the north side and I'll take the south side", i.e., let's divide things up according to our mutual interest. This expression in the health context is taken to mean that planning may reflect interests of providers, as opposed to that of the general public. An alternative use of the concept is that macroeconomics planning may serve a general interest at the expense of the individual patient.

•

Roemer's law – "Hospital beds, once built and insured, will be filled". The supply of hospital beds is a key determinant of utilization, especially where the public has health insurance benefits covering hospitalization. This "law" was modified by the experience of changing payment systems with incentives to reduce utilization. Following the introduction of the diagnosis-related group (DRG) method of payment in the USA in the 1980s, there was a reduction in hospital bed supply and occupancy. Incentives to control both hospital bed supply and utilization are crucial elements of health planning in most industrialized countries.

•

Bunker's law – "More surgeons; more surgery". A greater supply of surgeons generates more surgery. This has also been modified as managed care and gatekeeper functions limit referrals and self-referral to specialists, and as professional organizations and governments limit training positions and licensing for such specialists.

The economic consequences of decisions made in resource allocation are major determinants of health care economics. Each country has to cope with similar issues in reforms to adjust for changing health needs and the economic results of previous decisions (see Chapter 13). A comparison of total national health expenditures is seen in Table 11.4. The USA has consistently been the highest spender on health care, but succeeded in reducing the rate of cost increase in the 1990s. Canada also experienced high rates of cost increase in health during the 1970s and 1980s, but managed to reduce the rate of increase and moved from the second leading country in per capita health expenditures to fourth place after the USA, Germany, and France.

TABLE 11.4. Total Health Expenditures as a Percentage of Gross Domestic Product and Per Capita Health Expenditures in Dollars, by Selected Countries: Selected Years, 1970–2011

Country 1970 1980 1990 2000 2005 2006 2007 2008 2009 2010 2011
USA 7.1 9.0 12.4 13.7 15.7 15.8 16.0 16.4 17.4 18 18
France 5.4 7.0 8.4 10.1 11.1 11.0 11.0 11.1 11.8 12 12
Germany 6.0 8.4 8.3 10.3 10.7 10.6 10.5 10.7 11.6 12 11
Canada 6.9 7.0 8.9 8.8 9.8 10.0 10.0 10.3 11.4 11 11
Sweden 6.8 8.9 8.2 8.2 9.1 8.9 8.9 9.2 10.0 10 9
Denmark – 8.9 8.3 8.7 9.8 9.9 10.0 10.3 11.5 11 11
UK 4.5 5.6 5.9 7.0 8.2 8.5 8.4 8.8 9.8 10 9
Japan 4.5 6.4 5.9 7.7 8.2 8.2 8.2 8.5 – 9 9

Note: Data for 2010 and 2011 are rounded as from WHO Global Health Expenditure Data. NHA Indicators. Available at: http://apps.who.int/nha/database/DataExplorer.aspx?ws=1&d=1 (accessed 2.1.2014)

Source: National Center for Health Statistics. Health, United States, 2011: with special feature on socioeconomic status and health. Hyattsville, MD: NCHS; 2012. Available at: http://www.cdc.gov/nchs/hus/contents2011.htm#124 [Accessed 7 November 2012].

Health care expenditure involves money spent from all sources for the entire health sector, regardless of who operates or provides the services. The methods of financing health care include tax supported, social security supported, employer–employee financed, charitable organizations, or consumer payment at the time of service. The total of expenditures for health care and how those funds are spent are the most fundamental issues in health economics and planning. Allocation of resources requires a skillful planning process to balance spending on different subsectors of the system and to ensure equity between regions and various socioeconomic groups in society.

What is the "right" amount of health care financing? This is a political decision which reflects the social and economic value placed on health by a nation. These attitudes affect such issues as how well medical and other health care staff are paid in comparison to other professions, and the supply of physical and human resources for health care in a given society. Virtually all developed countries have recognized the importance of national health and the role of financing systems to make health care universally available. Some basic principles and recommendations for successful health care financing policies are outlined in Box 11.8.

BOX 11.8

Health Care Financing

Note: GNP   =   gross national product.

•

Incentives for improving health performance measures, including:

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preventive health measures

–

health promotion

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Universal coverage through social security or tax-based system

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Financing within national means for social benefits

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Adequate overall financing (>   6 percent GNP)

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Shift from supply-side planning to costs per capita

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Performance or output measures

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Categorical grants to promote national objectives and specific health target programs

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Increase financing at national, state, and local government levels (7–10 percent GNP)

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Health insurance as a supplement

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Define "basket of services" and consumer rights

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Reduce acute care beds to <   3 per 1000 population

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District health authorities with capitation funding

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Disincentives for excess hospitalization, surgery

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Incentives for integration of services

These rules are not absolute and solutions vary from country to country, as discussed in Chapter 13, and they change as experience, technology, science, and resources change. But it is important to stress that the system of financing greatly affects the services provided. The UK continues to operate its NHS at a relatively low percentage of GDP, as does Japan (Table 11.4). There are large differences in levels of expenditure on health between countries. In the established market economies, on average 9.3 percent of GDP goes to health, while the former socialist economies expend 3.6 percent, and developing countries generally under 4.5 percent.

Per capita health expenditures also vary widely. The total per capita expenditure on health, whether as a percentage of GDP or as dollars per capita, does not reflect the efficiency with which the resources are used. Many countries not only have low overall levels of health expenditure but also allocate those meager resources inefficiently.

Regardless of how efficiently money is allocated, countries spending less than 4 percent of GNP on health will have poorly developed health care. Those spending between 4 and 5 percent of GNP may try to have universal coverage, but often achieve this through low staff salaries, inadequate equipment, and spreading limited resources too thinly. Problems are accentuated when a disproportionately large hospital system and excessive supply of physicians create a siphoning effect on health care spending, or when resources are concentrated in cities although most of the population is rural.

Developed countries that spend between 8 and 18 percent of GNP on health care have made a value judgment. They have placed health care among the vital priorities in their societies. In those countries with high health care expenditures, such as the USA, physicians' incomes are very high, even when compared with other highly paid professionals. Where financing is centralized in a single paying agency, administrative costs are less than in countries with multiple funding sources. Canada's provincial health insurance plans operate with administrative overheads of less than 5 percent, compared to some 30 percent in US private health insurance.

The WHO issued a Global Strategy for Health Development, which stressed the importance of efficiency in use of resources as a vital element of health development. The WHO recommends preferential allocation to primary and intermediate care services, especially for currently underserved rural populations. In most countries, reallocation of resources is necessary to strengthen primary care and to adopt new technology and health programs, shown to be cost-effective in terms of costs as well as anticipated benefits.

Where there are multiple sources of health financing, it is more difficult to develop effective national planning. Regulation and supplemental funding by government are needed and required to prevent inequity between socioeconomic groups and between urban and rural populations. When multiple agencies are involved in health insurance or direct government granting systems for specific services, there are gaps (inadequate coverage or access) in services, usually for politically, geographically, and socially disadvantaged sectors of the population, who may have the greatest needs. Under such circumstances, public health services very often become oriented to provision of basic services for people excluded from health benefits because of lack of health insurance. This places a great financial burden on public health services, which are generally underfunded in comparison to clinical services. Such countries often bring in national health insurance for the disadvantaged groups (e.g., the elderly and the poor). These insurance plans may pay less well than private insurance for the middle class and organized workers. This situation applies to the USA and to many mid-level developing countries (see Chapter 13). The USA addresses this issue by promotion of national (and state) health targets, guidelines, accreditation systems, and strong professional organizations and medical centers with high levels of research capacity, but still lacks universal coverage for health care. However, the USA provides some US$100 billion in "uncompensated care" for the poor and large families, and these costs are built into the budgets. Hence, this care is subsidized by the insured person.

Where financing of health care is centralized, a potential exists for rational allocation of resources. But this depends on adequacy of total financing and rational allocation policies to promote equitable access to services and a balance between one service sector and another. Allocation of monies within the total health expenditures means selection from many alternatives. Misallocation of resources between sectors within the health sector can lead to a wasteful and even counterproductive health system, such as excessive funding of tertiary care while primary care is lacking (Box 11.9).

BOX 11.9

Major Categories of Health Expenditures

Note: STI   =   sexually transmitted infection; HIV   =   human immunodeficiency virus.

Sources: Testimony of A. Bruce Steinwald before the Subcommittee on Health, Committee on Energy and Commerce, House of Representatives; 2006.

US Government Accountability Office. Medicare physician payments: trends in service utilization, spending, and fees prompt consideration of alternative payment approaches. Statement of Director, Health Care. Available at: http://www.gao.gov/new.items/d061008t.pdf [Accessed 7 November 2012].

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Institutional care – teaching hospitals, general hospitals, mental and other special hospitals, long-term nursing care, residential care, hospices

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Pharmaceuticals and vaccines

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Ambulatory care – primary care, family practice, pediatric, prenatal, and medical specialist; medical, diagnostic, and treatment; ambulatory and day hospital clinics; surgical, medical, geriatric, dialysis, mental, oncological, drug and alcohol treatment

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Home care

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Elderly support activity/service centers

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Categorical programs – immunization, maternal and child health, family planning, mental health, STIs, HIV, tuberculosis, screening for birth defects, cancer, diabetes, hypertension

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Dental health

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Community health activities – healthy communities, health promotion in the community for risk groups; smoking restriction, promotion of physical fitness and healthy diet; environmental and occupational health; nutrition and food safety, safe water supplies, special groups

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Research

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Professional education and training

Where funds are allocated to regional or local health authorities, the potential for shifting resources to meet local needs should be greater. But this may be limited by lack of data or lack of analysis on a local or district basis to highlight priority areas of need. Where there is a highly decentralized management system, some centralized functions are essential to promote national health needs and equity between regions of the country. These functions include setting policy and standards, monitoring health status indicators, and determining health targets with funding to promote national priorities.

The range of services or programs requiring funding for a population group is indicated in Box 11.9. Medicaid includes those enrolled in the State Children's Health Insurance Program (SCHIP). Medicaid and SCHIP covered 37.5 million low-income individuals (12.9 percent of the US population), primarily children, pregnant women, elderly, and disabled people. Medicare, which insures the elderly, the disabled, and patients with end-stage renal disease. Both Medicare and Medicaid are parts of the Social Security Act (SSA) Amendments of 1965, Medicare (SSA Title XVIII) is under federal administration, while Medicaid (SSA Title XIX) is shared among federal, state, and local administration. Figure 11.4 shows the breakdown of health insurance coverage in the USA. In 2010, Medicare covered 47.5 million Americans; in 2012, Medicare covered 16 percent of the US population. In 2011 more than 48.6 million Americans lack health insurance, and another 16 million have low insurance coverage.

FIGURE 11.4. Sources of insurance coverage in the USA, 2011.

 Source: ASPE Issue Brief. Overview of the uninsured in the United States: a summary of the 2012 current population survey report. Available at: http://aspe.hhs.gov/health/reports/2012/UninsuredInTheUS/ib.pdf [Accessed 7 November 2012].

The US Institute of Medicine reports that lack of adequate insurance is the cause of an estimated 20,000 excess deaths per year in the USA (IOM, 2008). The Commonwealth Fund reports that the USA is the highest spender on health care but ranks below many other nations in terms of health indicators (Commonwealth Fund, 2012; OECD, 2012, 2013).

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Financing health care for all: challenges and opportunities

Dr AK Shiva Kumar PhD , ... Prof Abhijit Sen PhD , in Lancet, The , 2011

Summary

India's health financing system is a cause of and an exacerbating factor in the challenges of health inequity, inadequate availability and reach, unequal access, and poor-quality and costly health-care services. Low per person spending on health and insufficient public expenditure result in one of the highest proportions of private out-of-pocket expenses in the world. Citizens receive low value for money in the public and the private sectors. Financial protection against medical expenditures is far from universal with only 10% of the population having medical insurance. The Government of India has made a commitment to increase public spending on health from less than 1% to 3% of the gross domestic product during the next few years. Increased public funding combined with flexibility of financial transfers from centre to state can greatly improve the performance of state-operated public systems. Enhanced public spending can be used to introduce universal medical insurance that can help to substantially reduce the burden of private out-of-pocket expenditures on health. Increased public spending can also contribute to quality assurance in the public and private sectors through effective regulation and oversight. In addition to an increase in public expenditures on health, the Government of India will, however, need to introduce specific methods to contain costs, improve the efficiency of spending, increase accountability, and monitor the effect of expenditures on health.

Governance Issues in Health Financing☆

Kai Hong. Phua , in Reference Module in Biomedical Sciences, 2018

Conclusion

Health-care financing is one of the core components of health systems. Most health sector reform measures attempt to address health financing issues such as mobilization of funds, distribution of financial risks, allocation and utilization of services, and provider payment incentives. However, comprehensive information on health financing such as costs, prices, and expenditure is not readily available. This limitation affects appropriate health policy analysis to strengthen health financing governance at all levels. Ultimately, the priorities for good governance are to determine the proper roles and functions of financing within health systems that are well integrated with the provision and regulation of quality health services; to provide a level playing field for the balanced share of the public, private, and voluntary sectors; to develop universal health coverage for all within an affordable and sustainable financing framework; and to strengthen health financing methods with improved financial management systems. Specific emphasis is placed on devising rules and norms, and the enforcement of regulations to implement more equitable and fair financing policies with integrity, that are based on accurate and reliable financial data and information. Therefore the focus on governance should be on financing functions in detail—collection of funds, pooling of resources, and purchasing or payment for health services. These financing and related payment mechanisms to providers must be regulated more effectively with a system of checks and balances without incurring high administrative and transaction acts, to attain the policy goals of effective and efficient allocation and proper utilization of scarce societal resources toward Health for All.

As WHO expresses it metaphorically, failure of stewardship can be identified with three kinds of visual limitations. Turning a blind eye to corruption is a clear example of bad governance, whereas myopia and tunnel vision, the other two failings, are not. Good governance requires oversight, clear standards, and the ability to hold providers and payers accountable. Where these do not exist, it is unlikely that health systems will work, services will be delivered, and health status will improve. Poor governance undermines the quality of services and the acquisition and spending of public funds. Corruption eats away at the foundation of health-care finance, diverting funds during collection of premiums, undermining procurement rules in the purchase of inputs, and allowing funds to disappear between the point of collection and points of delivery. Absent physicians effectively steal from the public sector; petty theft of drugs, light bulbs, or food is just as much robbery. Even absent such corruption, underperformance by health-care providers leads to spending that has no impact. Addressing these problems entails clear rules, oversight, and enforceable discipline for those who violate public trust.

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Equity in financing and use of health care in Ghana, South Africa, and Tanzania: implications for paths to universal coverage

Prof Anne Mills PhD , ... Prof Di McIntyre PhD , in Lancet, The , 2012

Summary

Background

Universal coverage of health care is now receiving substantial worldwide and national attention, but debate continues on the best mix of financing mechanisms, especially to protect people outside the formal employment sector. Crucial issues are the equity implications of different financing mechanisms, and patterns of service use. We report a whole-system analysis—integrating both public and private sectors—of the equity of health-system financing and service use in Ghana, South Africa, and Tanzania.

Methods

We used primary and secondary data to calculate the progressivity of each health-care financing mechanism, catastrophic spending on health care, and the distribution of health-care benefits. We collected qualitative data to inform interpretation.

Findings

Overall health-care financing was progressive in all three countries, as were direct taxes. Indirect taxes were regressive in South Africa but progressive in Ghana and Tanzania. Out-of-pocket payments were regressive in all three countries. Health-insurance contributions by those outside the formal sector were regressive in both Ghana and Tanzania. The overall distribution of service benefits in all three countries favoured richer people, although the burden of illness was greater for lower-income groups. Access to needed, appropriate services was the biggest challenge to universal coverage in all three countries.

Interpretation

Analyses of the equity of financing and service use provide guidance on which financing mechanisms to expand, and especially raise questions over the appropriate financing mechanism for the health care of people outside the formal sector. Physical and financial barriers to service access must be addressed if universal coverage is to become a reality.

Funding

European Union and International Development Research Centre.

Population Health Management

Monica J. Federico MD , Katherine Johnston MPH , in Personalizing Asthma Management for the Clinician, 2018

Summary

As healthcare financing moves away from a fee-for-service model toward innovative payment models, including capitation, a healthcare system's success will rest on its ability to proactively manage the health of its patient population. Coordinating with other local stakeholders by creating a pediatric care network is an effective way to address population health. In the example provided above from Denver, there were several keys to success. These include having (1) an organized asthma team with clear goals and defined program leadership roles; (2) regular and accurate data reports to review processes and health outcomes; (3) well-defined initiatives and goals; and (4) continuous funding from multiple sources. An active NOAC will enable care teams in multiple settings to provide coordinated, high-quality asthma care to their pediatric patients.

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The Executive Male

Sean Kesterson MD , Joel J. Heidelbaugh MD , in Clinical Men's Health, 2008

Frontiers and Opportunities in Executive Healthcare

Changes in healthcare financing, telecommunication, service orientation, and office efficiency are simultaneously creating a more conducive environment for EHPs to run well and thrive. A major stimulus in favor of EHPs is the movement toward consumer-driven healthcare. This will be a more common orientation as the financial transaction between physicians and patients becomes more direct. Patients will begin to have more choice and authority in spending for healthcare as rules for use common in managed care settings apply less and less, and restrictions are loosened as a result. The public will more actively participate in decision making with regard to the tests, treatment, medications, and other services they will have available to them. This trend has become even more prevalent and impending with changes in how businesses pay for their executive and employee healthcare.

The extreme burden for US businesses in financing healthcare has created a pressing need to create new ways for employees to obtain reasonable healthcare at a lower overall cost to their respective businesses. Simply stated, employee health benefits that require lower employer contributions drive down the cost of doing business. Before 2003, alternatives such as flexible spending accounts existed but were undesirable because of their inherent "use it or lose it" rules: tax-free dollars saved for allowable healthcare expenses had to be used within a 12–18-month period or be forfeited. When the Medicare Prescription Drug Improvement and Modernization Act was signed into law on December 8, 2003, the ability to create healthcare savings accounts (HSAs) became law. These accounts are effectively managed in a manner similar to individual retirement accounts. 14

A number of rules apply to the creation of HSAs. Maximum liabilities and contributions are set for individuals and families, contributions must be made while enrolled in a qualified high-deductible health insurance policy (but does not have to be in effect for a withdrawal from the HSA), and only certain types of medical expenses qualify for fund withdrawal and application. HSAs are quite different from flexible healthcare savings accounts in that the funds do not have to be used during a specific time period, and they can be kept in reserve for use in future years. Thus, the "use it or lose it" rule does not apply to HSAs. These funds can be used for Consolidated Omnibus Budget Reconciliation Act (COBRA) premiums, healthcare coverage while receiving unemployment compensation, and long-term care insurance premiums. 15 Thus, HSAs seem to be a very positive and attainable option for many patients and their employers. In this scenario, the employer ultimately pays lower premiums for higher-deductible catastrophic medical insurance, and the patient has a means to use tax-exempt dollars to directly purchase healthcare services, evaluations, tests, and treatment. Although lists of eligible expenses have been drafted, none are currently definitive. According to the IRS, "the expense has to be primarily for the prevention or alleviation of a physical or mental defect or illness." Virtually everything that is commonly provided in an EHP would therefore meet the definition of an allowable expense.

Although employers traditionally cover the costs for higher level executives to have executive physicals, HSAs make executive examinations more accessible to executives, managers, directors, and employees who are not generally eligible for a company-funded executive-level physical. EHP practices can take advantage of this by creating programs that emphasize patient choice and freedom created by HSAs, encouraging them to pursue this with their employer, and creating EHPs that efficiently address their needs and preferences. Competitive pricing of office visits and evaluations can be created in a way that permits additional time for the physician to spend consulting with patients, the limits of which are a major frustration in managed care and third-party fee-for-service insurance-financed healthcare.

The facile use of modern communication equipment also provides new opportunities to improve health outcomes with executives. As previously noted, the importance of efficiency and time savings are enormously important to executives. The use of cellular phones, wireless technology, the Internet, e-mail, text pagers, and video phones makes it possible for patients and their physicians to communicate with each other, virtually face to face, anywhere, at anytime. EHPs can therefore provide additional services and prompt follow-up that is not traditionally possible. Office-initiated contact can influence outcomes by ensuring adequate follow-up on important test abnormalities, behavior and lifestyle changes, exercise and stress management, medication options and management, and guidance on specialist referral, tests, and treatment. The array of information exchange seems almost limitless. It is almost certain that access to physician-patient communication of this sort is an untapped opportunity to revolutionize ideal preventive healthcare for everyone.

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Federal Reimbursement-Focused Statutes for Rehabilitation Providers

Corrine Propas Parver JD, PT , in Physical Rehabilitation's Role in Disability Management, 2005

HEALTH CARE QUALITY IMPROVEMENT PROGRAM

The then-HCFA and peer review organizations (PROs) initiated the Health Care Quality Improvement Program (HCQIP) in 1992. HCQIP looks to partner with practitioners, beneficiaries, providers, plans and other purchasers to improve Medicare beneficiaries' health. Through HCQIP, the Medicare agency will:

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Develop scientific quality indicators.

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Measure care patterns and identify opportunities to improve care.

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Communicate with professional and provider communities about these patterns of care.

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Foster quality improvement through system improvements.

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Measure again to evaluate success and redirect efforts.

The Cooperative Cardiovascular Project in 1992 was the first national quality improvement project under HCQIP. On the basis of public health importance and the feasibility of measuring and improving quality, HCQIP now covers seven clinical priority areas:

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Acute myocardial infarction

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Breast cancer

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Diabetes

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Heart failure

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Pneumonia

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Stroke

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Reducing health disparities within the Medicare population

HCQIP is carried out locally by PROs, which develop and implement cooperative projects with health care providers to improve the quality of care and to assist beneficiaries to make informed health care choices. The cooperative projects are expected to result in measurable improvement in the processes and outcomes of the clinical issues involved. Additionally, PROs are required to provide quality improvement consultation to providers, including data analysis, educational materials, quality improvement consulting, custom assistance with local quality improvement activities, the dissemination of quality indicators and data collection instruments, and provider collaboration opportunities to improve care and reduce expenditures.

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Ethics and Psychiatry

M.N. Miller , A.R. Dyer , in International Encyclopedia of the Social & Behavioral Sciences, 2001

7 The Ethics of Managed Care

The current revolution in healthcare financing challenges many traditional assumptions of medical ethics. The most fundamental change is the departure from a dyadic doctor–patient relationship. Doctors in the new environment are being transformed into 'providers,' patients into 'consumers,' and any number of 'third parties' claim an interest in what goes on in that relationship.

In the economic model of marketplace transactions, much more is at stake than how the payment is to be allotted. The metaphor of healthcare as an industry radically transforms the healing process to physiological interventions that take place in a delimited period of time. Physicians become technicians, and patients become recipients of technology, with both likely to be strangers to one another. Medicine is transformed from a human service into a commodity.

In the interest of efficiency or economy these transformations might seem warranted, but the practices we are currently witnessing in the name of managed care must themselves be subjected to ethical scrutiny. Certainly much of what is going on is not ethically justifiable, nor does it serve the ends it was purported to serve. The transformation of medicine from a profession to a trade by the Federal Trade Commission was justified as a cost-saving measure on the grounds that increasing consumer choice (through advertising) would lower costs. The value placed on autonomy set the stage for a transformation in which consumers have very little choice about the healthcare they receive. Healthcare has become an investment opportunity where vast amounts of money have been siphoned away from service delivery into the pockets of executives and shareholders of mega-corporations. The market solution has been a nonsolution to this point in that it has only succeeded in lowering costs without adequately addressing quality of service or the distribution and allocation of services.

The ethical physician is inevitably in tension with a system designed to limit or deny the care given to his or her patients. While recognizing that resources are finite, the ethical physician must struggle to do the best possible for individual patients without compromising integrity. Many of the practices of managed care are fraudulently unethical, such as gag rules prohibiting physicians from discussing treatment options with their patients. Such policies do not enhance consumer choice, but diminish patient autonomy and oppose informed consent, placing the physician in the position of a double agent without the possibility of disclosure. Many practices of managed care are more subtly unethical, such as misleading advertising or incomplete disclosure. Some practices, such as limiting who may serve on panels, may be in restraint of trade. They are certainly not pro-competitive. Managed care is an ethically unstable response to the healthcare financing dilemma and must be subjected to thoroughgoing ethical evaluation. A just society must demand accountability for its citizens.

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Health Policy: Overview

Calum Paton , in International Encyclopedia of Public Health (Second Edition), 2017

Financing Options

The main options for financing health care (ranged along a continuum from private to public) are as follows:

1.

private payment (out of pocket), including partial private payment, that is, co-payments (coinsurance or deductibles) (coinsurance means the consumer paying a proportion of the cost, e.g., 20%; a deductible means the consumer paying a fixed amount on each claim, e.g., £50);

2.

voluntary private insurance, including partial versions (e.g., supplementary and complementary insurance, to be discussed below);

3.

statutory private insurance regulated by the state (including partial versions such as substitutive insurance, meaning – in this option – mandatory private contributions by certain categories of citizen (generally the better-off) toward core rather than supplementary or optional health services. That is, everyone is covered, but the better-off pay a form of insurance that is obligatory;

4.

community pooling;

5.

public/social insurance;

6.

hypothecated (earmarked) health taxation;

7.

general taxation.

Assessment of Options Against Criteria

A specific policy analysis would assess options, one by one, against identified criteria and (perhaps) incorporate a weighting procedure to rank the options. From the viewpoint of understanding how policy is actually made, however, this would only be part of the picture.

It might constitute an attempt at rational policy making, that is, an attempt to provide a basis for scientific consensus among the key actors holding power in either the policy process generally or government in particular. Alternatively, it might seek to build in to the criteria for judging options (or even, to the options themselves) pragmatic or political factors (such as the political feasibility of an option in a particular political context).

Either way, it is important to be explicit about the range of factors likely to affect a policy's success as regards both enactment and implementation (i.e., outputs and outcome, respectively), as explored in the sections titled 'Explaining public policy' and 'Policy in practice'. Otherwise, there is a divorce in the policy dialogue between what might be termed technocrats (such as economists), on the one hand, and political scientists on the other. The divorce between such worlds is often responsible for extremes of optimism and disillusionment, respectively, in assessing policy ex ante and ex post, as with recent health reform programs in England, for example.

Governance

There are fundamentally three categories of system:

1.

statist systems;

2.

market systems (whether private, public, or mixed);

3.

self-governing systems (with varying degrees of state regulation) (Arts and Gelissen, 2002), in which either guilds or organized functional interests or networks (of providers, financiers, and employees) organize the delivery of care.

Statist systems have replaced the market with public planning, whether it is dominated by politics, the public, or experts. Market systems rely on either private markets that have evolved historically or on the creation of market structures and incentives within (formerly) publicly planned systems. Self-governing systems are systems where central state control is limited or weak or both, but where guild-like relationships rather than market relationships between key actors predominate. For example, physicians' associations, insurers' associations, and the state will thrash out deals in a corporatist manner, with corporatism meaning (in this context) the institutionalization of major social interests into a reasonably stable decision-making machinery overseen by – but not dominated by – the state.

Clearly most advanced health-care systems are hybrids in varying degrees. The question is whether the degree of hybridity is dysfunctional or not, that is, whether cultures and incentives are adequately aligned throughout the system.

Using the language of incentives, it is important to distinguish between macro and micro incentives. Statist systems, for example, are generally good (often too good!) at macro cost control; their record in terms of micro-level allocations (e.g., to providers or clinical teams) to achieve objectives is variable (a statement that should be taken at face-value; some are good at it; others are not). Those systems that allow meso-level planning authorities, such as regions, to avoid the excesses of both central control and local capture by unrepresentative interests, often have the capacity to square the circle in terms of incentives, as long as attention is paid to steering the system to achieve desired outcomes.

While all systems are likely to be hybrids, it is important to ensure that the dominant incentives, geared to achieving the most important objectives agreed by government on behalf of society, are not stymied by cross-cutting policies with separate incentives. This has been an occupational hazard of (for example) England in recent years, arguably, with four different policy streams vying for dominance: The purchaser/provider split inherited from the 1990s' old market and deepened by the creation of Primary Care Trusts; local collaboration as an alleged third-way alternative to state control and markets; central control through myriads of targets; and the new market of patient choice implemented alongside payment by results (Paton, 2005a,b).

In consequence, in considering structures, attention ought to be paid to the central structure, that is, how the political level is and is not distinguished in terms of governance from the top management, that is, health executive level. There is no one answer (again, as the United Kingdom and especially England's volte faces on whether or not health ought to be managed strategically at arm's length from government or not probably show). Nevertheless, the question ought to be considered in terms of roles and functions of the different levels within a coherent governance structure: Is the system capable of articulating consistent policy?

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https://www.sciencedirect.com/science/article/pii/B9780128036785001910