HLTH-4700 Lecture Notes - Lecture 1: Socialized Medicine, Preventive Healthcare, Otto Von Bismarck

26 views6 pages

silverprairie-dog245

19 Nov 2017

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

Document Summary

The united kingdom"s type of model of health care is called socialized medicine. This is providing medical and hospital care for all by public funds. The characteristics of this model is the health service are no co-pay, have insurance premium, and no fee at all. In this health care system of united kingdom, the hospitals compete with each other. However, they do not compete each other for profit. The nhs and the us"s healthcare system are similar when it comes to the quality of the medical help. Nhs is different from the u. s. since the united states views healthcare as a privilege not a right. Additionally, the u. s. individuals pay a portion of the cost while brits. Pay through taxes in which everyone has coverage. The strengths of this county"s health care system is there are no medical bills nor medical bankruptcy, a strong preventive care, and has excellent preventive medicine.

Related Questions

The CEO of St. Sebastian Health System, a moderate-sized hospital system in a mid-sized, Midwest city has hired you to help turn things around. The CFO is projecting a $3.7 million operating loss this year, which will be more than offset by non-operating income. However, the board has made it clear that the situation must improve. If the system cannot produce a positive operating margin in 2017, someone else is going to be the CEO. The CEO and CFO have asked you to recommend strategic approaches to sell their services in the community that will help turn the financial ship around.

Your Health System

St. Sebastian is a community-based health system. The senior management team has an average tenure of 17 years. The exception is the Chief Medical Officer (CMO). She has been in her position for two years and is the fourth CMO in that role in the past ten years. The CEO and COO have each been in their current roles for ten years. The system is comprised of the following:

Two large, acute care hospitals

Two long term care facilities

Two skilled nursing facilities

One long-term acute-care hospital (LTAC)

Four geographically distributed outpatient centers

Four Urgent Care Centers

Two free-standing ambulatory surgery centers (ASCs)

A 400 member employed physician group that includes 180 Primary Care Providers (PCPs). All 28

PCP practices are certified Level III Patient-Centered Medical Homes by NCQA.

The remainder of the 1,000 members medical staff is generally comprised of large, independent groups who have varying degrees of loyalty to the system. The Radiology and Emergency groups, for example, do 100% of their work at St. Sebastian and have no ownership of any outside facilities. The Gastroenterology Group, on the other hand, does work at the hospital but also owns its own, freestanding endoscopy center. The orthopedic group does 75% of their work at St. Sebastian but maintains privileges at other facilities. They do not own their own ASC.

In the current year, St. Sebastian is projecting 220,000 patient visits (combined IP and OP) with an average cost per visit of $1,727. They have an average charge per visit of $4,545.

Over the past ten years, St. Sebastian has been active in pursuing many different strategic projects including:

They have established clinical institutes in cardiovascular, orthopedic, oncology, maternity, and neurologic care. Each of these has been built through a co-management agreement between the system and the internal or external physician group who would be most logical. Each institute is led by a dyad of an administrator and medical director.

Five years ago, they consolidated maternity programs to one facility, a move that justified investing in a Level III Neonatal Intensive Care Unit (NICU)

They have established a research division in the hopes of working with national pharmaceutical companies and/or tertiary care hospitals in the Midwest.

They have established a Physician Hospital Organization (PHO) and intend to become an Accountable Care Organization (ACO) that can participate in the Medicare Shared Savings

Program (MSSP) and/or enter into global risk contracts with third-party payers. The PHO is currently evaluating whether or not they should purchase an insurance license so that they could offer commercial, Medicare Advantage, and Managed Medicaid insurance products.

5. They have established a Business Health division to service the corporate health needs of the employers in the region. This would include things like EAP programs, on-site wellness, drug screening, on-site clinics, etc. This division also recently built two large, full-service fitness centers.

The competition The community is currently served by three other major health providers:

Mercy is the competitor acute care system in town and has two hospitals and various outpatient centers. They have not been active in physician employment they employ a group of 60 PCPs, but no specialists. Similarly, they have not been engaged in branching out with different strategic initiatives, preferring instead to focus on cost-efficient care. They do not have clinical institutes, research divisions, a PHO, or a Business Health division. They have 230,000 visits per year, with an average cost of $1,435 per visit and an average charge of $4,348.

General Pediatric is a pediatric teaching hospital. Five years ago, they signed an affiliation agreement with Johns Hopkins to gain access to clinical and research capabilities that would have been beyond their reach, given their size. The employee essentially all of the pediatric subspecialists and have a PHO, which includes 75% of the region's primary care pediatricians. They will have 200,000 visits this year, with an average cost of $2,100 per visit and an average charge of $5,000 per visit.

General University is an adult teaching hospital affiliated with the local university's medical school. They staff the region's free-care clinics and historically, have been the region's hospital for indigent/uninsured patients. They are the region's Level I trauma center and are well regarded for intensive services like trauma, stroke, and cancer care. However, their location and reputation for taking indigent patients mean that they are not preferred for normal medical care by commercially insured or Medicare patients. Besides the community health centers, they own an inpatient rehab hospital, but no other facilities. They have explored affiliations with national leaders in academic medicine, but so far have not signed any such agreements. They see 180,000 visits per year with an average cost of $1,833 and an average charge of $5,556 per visit.

There are no other hospitals currently operating, though there are 23 skilled nursing facilities (SNFs) and 3 inpatient rehab facilities throughout the region. They are independent actors and for the most part, are struggling to stay profitable. Several single-specialty physician groups operate ambulatory surgery centers and one chain of independent diagnostic treatment facilities (IDTFs). Three years ago, there was a significant change in the state government, and that resulted in the long-time Certificate of Need (CON) program is all but scrapped (Skilled Nursing Facilities are still heavily regulated). Several for-profit hospital companies have recently done some analysis around entering your market, but have not done so yet.

The community is a Midwest city and surrounding suburbs in the midst of a transition from a manufacturing employment base, which unfortunately accelerated with the 2008 economic downturn. The hospitals have seen this over the past several years in a tightening of benefits offered by local employers. Benefits continue to be offered, but increasingly are likely to have a significant deductible associated with them. Unemployment has been above the national average and is projected

to remain that way. This means that the average wage in the region is actually below where it was in 2008 when the last recession hit. The number of Medicare-age residents is projected to rise over the next 10-20 years while working-age patients are projected to stay flat or fall slightly. Similarly, birth rates are expected to fall slightly over the coming decade.

The community is 60 miles south, 45 miles east, and 50 miles north of other, similarly-sized cities. Until 20 years ago, that made this city effectively an island unto itself. Increasingly, however, the suburbs of each of these communities have become very close to each other. As that has happened, providers in each community have followed and established practice sites and free-standing outpatient centers.

The community has a normal looking mix of Commercial, Medicare, and Medicaid patients. Because the state's governor was fiercely against the Affordable Care Act, the Medicaid expansion that happened in other states hasn't happened here. Thus, the community also has a sizable population without insurance today. As you'd expect, different hospitals see a different mix of these patients. The local health council was able to provide you with the most recent years payer mix by hospital below:

Patient visits	Commercial	Medicare	Medicaid	Uninsured/Self-pay
Mercy	80,500	105,800	23,000	20,700
St. Sebastian	99,000	101,200	11,000	8,800
Gen. Pediatric	70,000	4,000	110,000	16,000
Gen. University	63,000	45,000	45,000	27,000
Community Total	312,500	256,000	189,000	72,500

Reimbursement the CFO was able to supply you with their best estimate for what various payers are reimbursing for services. In general, the commercial plans are paying 50% of charges, regardless of location, except at General Pediatric. There, the monopoly on pediatric services has allowed them to negotiate rates of 80% of charge, but only for the commercial plans. Medicare currently pays 30% of charges at all hospitals, and Medicaid pays 25% of charges everywhere. Uninsured patients are generally paying 2% of charges.

refer back to St. Sebastian and the facts laid out in the background reading and Case #1and consider:

What products are in this industry vs. part of another distinct group?

What is the geographic scope of competition?

Identify the participants and segment them. Who are,

The buyers and buyer groups?

Suppliers and supplier groups?

The competitors?

The substitutes?

The potential entrants?

Which of these forces is strong/weak and why?

If possible, analyze the industry structure.

Why is the level of profitability what it is?

Which are the controlling forces for profitability?

What are the recent and likely future changes in each force, both positive and negative?

amaranthsnail375

PROVIDE A RESPONSE OR STATEMENT TO THIS STUDENTS DISCUSSION:

1 - Please share your experience on selecting a managed care plan. Please discuss the advantages and disadvantages of your MCO plan.

Up until about ten years ago my company offered an HMO MCO plan option managed by Kaiser Permanente. This plan was less expensive in my paycheck deduction and offered $10 co-pays for every office visit and 100% hospitalization. In 1992 as a single young man in my twenties I found this option very attractive. I ended up getting married early that year, had a flu episode and a bout of food poisoning. My wife ended up with a hospitalization as well. What looked good on paper ended up being a very restricted healthcare experience. My office visits were restricted to only one clinic where the health care professional point of contact were physicians assistants under the supervision of an MD which we never saw. All of the prescriptions were for generic medicines and when my wife was hospitalized she was not allowed branded medicines either. We also thought she was discharged too early. The advantages of this type of plan are costs and simplicity. If we had not been sick that year we probably would have signed back up for it. The disadvantages were that our level of care was reduced to a less skilled health care professional and the attending physician who cared for my wife in the hospital discharged my wife early due to a time limit the HMO had placed on the length of stay for her illness code. That was the first and last year I chose an MCO plan for my health coverage.

2 - Many argue that there is no consistent, direct correlation between the cost of care and its quality in a managed care program. Do you agree or disagree?

In my personal experience managed care plans attempt to lower the primary care contact to non MD health care professionals such as Nurse Practioners and Physicians Assistants. While these clinicians are well trained and certainly have their appropriate place in medicine, they do not have the extensive medical training that MDs and DOs spend a minimum of 8 years mastering. These clinicians cost less than MDs and are very attractive way to reduce staffing costs. As a patient however I prefer the highest skilled level clinician caring for me and my family and am willing to pay more for this higher level of care. In my opinion Kaiser Permanente may have saved money but I was not happy with the level of care and medicines provided. They may have saved money that year but they lost me as a customer. Epstein et al, (2014) compared Accountable Care Organization (ACO) patients with non ACO patients and while they found that there were many differences in spending, age, and severity of illness, there was no difference in quality metrics despite non ACO members costing more overall. It would seem that in this example costs can be lowered without affecting quality outcomes. However ACO participants had access to significantly more participating clinicians and hospitals. What is missing from this study is a patient survey comparing the satisfaction of ACO and non-ACO patients.

3 - Do you think patients' choice of provider and access to care will be limited under ACOs?

In my personal experience and through observations of managed care offices and hospitals as a pharmaceutical representative, ACOs not only restrict the choice of provider and access to hospitals they utilize lesser trained medical professionals in Primary Care, Specialty and Hospitals in addition to restricting access to branded medications. This observation is in agreement with Epstein et al, (2014) in which ACO members cost less but had less access and choice of participating access points and clinicians.

4 - In what ways can an ACO succeed in both delivering high-quality care and spending health care dollars more wisely?

ACOs can be very useful in curbing costs. For those with limited health care budgets or those patients who receive public assistance an ACO model whether public or private. However Lewis et al, (2014) found that even though there was an almost even split between ACOs contracting for private and public contracts in the U.S.A., public contracts were less profitable than private ones due to public patients costing more to manage per capita than private ones. Quality was not examined. It would seem that an ACO would be ideal when faced with limited resources but ACOs may be reluctant to engage in contracts that are less profitable.

Question 11 One potential remedy to the tragedy of the commons is to: never allow a single individual to consume more than one percent of the common resource. criminalize the usage of common resources. allow individuals to use a common resource as long as they receive some benefit from doing so. place a common resource under private ownership. 4 points Question 12 As a result of a positional externality: contestants have a tendency to invest in a series of mutually offsetting investments in performance enhancement. there is generally an underinvestment in performance enhancement. the market price of performance enhancement materials is too high. the quality of performance in competitive situations is lower than the socially optimal level. 4 points Question 13 Which of the following statements is true regarding health insurance? Economics shows that all health related procedures should be free to individuals because the health of an individual is priceless. Total economic surplus would be larger if individuals faced an incentive to only use services when the benefit exceeds their costs. Health maintenance organizations provide an incentive for doctors to prescribe expensive nonessential services. First dollar insurance coverage has likely had very little to do with rising healthcare expenditures since World War II. 4 points Question 14 A strategy that yields a higher payoff no matter what the other players in the game choose is known as a: prisoner's strategy. dominated strategy. dominant strategy. Nash strategy. 4 points Question 15 Based on the diagram below, if the costs of hospital care are constant at $200 per day, and the individual does not incur any cost for each day for hospital care, then: the individual will stay 7 days and there will be no loss in economic surplus. the individual will stay 3 days and there will be no loss in economic surplus. the individual will stay 7 days and there will be lost economic surplus. the individual will stay 3 days and there will be lost economic surplus. 4 points Question 16 Economic research by Manning and colleagues suggests that people with deductible health insurance policies: spend substantially less on health care and have substantially worse health outcomes compared to people with first-dollar insurance coverage. spend substantially more on health care and have substantially better health outcomes compared to people with first-dollar insurance coverage. spend basically the same amount on health care and have substantially worse health outcomes compared to people with first-dollar insurance coverage. spend substantially less on health care and have no measurable difference in health outcomes compared to people with first-dollar insurance coverage. 4 points Question 17 An efficient program for reducing pollution is one for which: all polluters incur the same total costs of abatement. all polluters pay the same amount in taxes to the government. all polluters have the same marginal costs of abatement. all polluters reduce their emissions by the same amount. 4 points Question 18 Given the information on pollution abatement costs of the two firms shown below, which of the following is an efficient combination of pollution reduction? Quantity of pollution abatement Firm A's MC of abatement Firm B's MC of abatement 1 $30 $25 2 $35 $30 3 $40 $35 4 $45 $40 Firm A reduces by 1 ton and Firm B reduces by 1 ton. Firm A reduces by 2 tons and Firm B reduces by 3 tons. Firm A reduces by 4 tons and Firm B reduces by 1 ton. Firm A reduces by 3 tons and Firm B reduces by 2 tons. 4 points Question 19 All of the following are characteristics of perfectly competitive markets except: there are a large number of firms. productive resources are mobile. all firms produce a differentiated product. buyers and sellers are well informed. 4 points Question 20 An advantage of the auction method to pollution abatement is that: it is very expensive to firms. regulators can achieve a desired abatement target without having detailed knowledge of the abatement technologies available to polluters. it requires all firms to reduce by exactly the same amount. it assures that eventually society will reach a level of zero pollution emissions. 4 points Question 21 There are 2 firms each emitting 200 tons of a pollutant. Firm A's abatement costs are constant at $20/ton, and Firm B's abatement costs are constant at $40/ton. The government's goal is to reduce pollution by half. If the government auctions 200 one ton permits to the highest bidder: Firm A will purchase all 200 permits. Firm B will purchase all 200 permits. each firm will buy 100 tons. there is no way to know who the highest bidder for any permit would equal. 4 points Question 22 As a result of economies of scale, as output expands: fixed costs are decreasing. average total costs are decreasing. marginal costs are increasing. total costs are decreasing. 4 points Question 23 Generally, when countries open their borders to free trade: both domestic producers and consumers of imported goods gain. both domestic producers and consumers of exported goods gain. domestic producers of imported goods and domestic consumers of exported goods gain. domestic producers of exported goods and domestic consumers of imported goods gain. 4 points Question 24 Which of the following is the best example of a tariff? South Korea bans imports of U.S. beef because of safety concerns. The U.S. requires toys imported from China to undergo testing for lead content. The U.S. imposes a tax on sugar imported from Brazil. The U.S. restricts the quantity of cars imported from Japan. 4 points Question 25 A means-tested program is a benefit program: in which benefits decline as a recipient's earned income increases. in which all individuals must undergo health screening to be eligible for benefits. in which all recipients exclusively receive benefits through in-kind transfers. that only affects the average income of a specific segment of the population. 4 points Save and Submit Click Save and Submit to save and submit. Click Save All Answers to save all answers.

HLTH-4700 Lecture Notes - Lecture 1: Socialized Medicine, Preventive Healthcare, Otto Von Bismarck

Document Summary

Get access

Related Documents

SOCI 181 Lecture Notes - Lecture 2: Infant Mortality, Preventive Healthcare, Topnotch

HSC 2000 Lecture Notes - Lecture 2: Variable Cost

ECON 1201 Chapter Notes - Chapter 7: Health Insurance Mandate, Externality, Patient Protection And Affordable Care Act

Related Questions