PUBHLTH 122 Lecture Notes - Lecture 11: Patient Protection And Affordable Care Act, Deficit Reduction Act Of 2005, Poverty In The United States

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1 Oct 2016

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Government health insurance programs: medicaid, chip, and medicare. Provides a basic overview of the major public health insurance programs in the us, including changes to the programs under the affordable care act (aca) Focuses on: medicaid, children"s health insurance program (chip, medicare. Entitlement everyone who is eligible for and enrolled in the program is legally entitles to receive benefits from the program: beneficiaries may not be refused service for lack of funds or other reasons. Overview: a federal-state public health insurance program for the indigent. Program administration: federal: center for medicare and medicaid services (cms) outlines mandatory and optional populations and benefits covered under medicaid, state: state medicaid agencies run programs, select which optimal populations and benefits to cover in the state program. Medicaid generally covers low-income: pregnant women, children, adults in families with dependent children, individuals with disabilities, elderly. Must meet 5 eligibility requirements: categorical, income level, resources, residency, and immigration status.

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Case Study: Price Discrimination in Practice

What do American Airlines, Walgreens, Staples, Stanford University, AT&T, the Mayo Clinic, and Safeway have in com-mon? They all price discriminate (Valentino-Devries, Singer-Vine, and Soltani 2012). They charge different customers different amounts for the same product.Pharmaceutical discounts are the clearest examples of healthcare price discrimination because the products are identical. Only the prices differ. A cash customer (e.g., someone without insurance coverage) would pay the highest price, the list price. Most customers pay much less than list price. Insurers negotiate discounts with manufacturers and pharmacies. These discounts are typically about 30 percent (Herper 2012). Some hospitals and HMOs have their own pharmacies and can negotiate even better deals with manufacturers. These organizations sometimes pay as little as 40 per-cent of list price. Most discounts come in the form of rebates, meaning that a purchaser pays the list price up front but gets a payment from the seller later. This process makes resale more difficult and limits price transparency (Morgan, Daw, and Thomson 2013). The federal government has multiple discount programs. The larg-est is the Medicaid rebate program, which requires manufacturers to pay a rebate that varies by the type of drug. Prices, formularies, and copayments vary from state to state, so whether the Medicaid rebate program covers the most effective medications or gets the best prices is not clear (Millar et al. 2011). Many federally funded clinics and hospitals are eligible for the Medicaid discount. However, these agencies can often negotiate better deals because they can buy wholesale and because they can choose drugs for their formularies. Tribal and territorial governments can use the prices on the Federal Supply Schedule, which federal agencies use to buy common supplies and services. The Department of Defense, the Department of Veterans Affairs (VA), the Public Health Service, and the Coast Guard may get prices that are slightly lower than the Federal Supply Schedule because of a provision called the federal ceiling price . This provision caps the price using a formula based on private-sector transactions. Finally, these agencies can try to negotiate prices below the federal ceiling price. The VA, which uses a national formulary, has used its bar-gaining power to get substantially better prices. Frakt, Pizer, and Feld-man (2012) report that the VAâs prices are 37 to 44 percent lower than Medicare prices.

Discussion questions:

â¢ Why do drug firms give discounts voluntarily?

â¢ Do other healthcare providers routinely give discounts to some customers?

â¢ Why do the uninsured typically pay the highest prices?

â¢ Why would a hospital usually get a better price for a drug than an insurance company?

â¢ Why does the VA get such low prices?

â¢ Suppose a law was enacted that required drug manufacturers to give state Medicaid agencies the same price they negotiated with the VA. How would Medicaid and VA prices change?

â¢ Should Medicare adopt the VA formulary?

Dems, GOP talk up deficit reduction, but don't act

WASHINGTON (AP) â Liberals' loud objections to White House proposals for slowing the growth of huge social programs make it clear that neither political party puts a high priority on reducing the deficit, despite much talk to the contrary.

For years, House Republicans have adamantly refused to raise income taxes, even though U.S. taxes are historically low, and the Bush-era tax cuts were a major cause of the current deficit.

And now, top Democrats are staunchly opposing changes to Medicare and Social Security benefits, despite studies showing the programs' financial paths are unsustainable.

Unless something gives, it's hard to see what will produce the significant compromises needed to tame the federal debt, which is nearing $17 trillion.

"There's not much of an appetite for deficit reduction," said Bob Bixby of the Concord Coalition, which pushes for "responsible fiscal policy."

There might be a few small steps this year, he said, when the government again needs to raise its borrowing limit. But a "grand bargain" involving significant spending cuts and revenue increases seems unlikely, Bixby said.

He added, "It's a little depressing to hear the reactions to the president's budget, from both sides."

There was nothing surprising about Republican denunciations of Obama's proposed tax increases, which he wants to combine with spending cuts to reduce the deficit.

The newer wrinkle was the left's sharp criticism of his proposals to slow the growth in Medicare and Social Security benefits, provided Republicans agree to new revenues. Obama has offered Republicans such a deal before. But this month's budget proposal gave it a new imprimatur.

The group MoveOn.org said Wednesday that supporters "who are outraged at President Obama's proposal to cut Social Security benefits will protest and deliver petitions" this week.

Sen. Bernie Sanders, a liberal independent from Vermont, is leading a similar petition drive, opposing "any benefit cuts to Social Security, Medicare or Medicaid." The deficit, his letter says, "was primarily caused during the Bush years by two unpaid-for wars, huge tax breaks for the rich and a prescription drug program" for Medicare, funded through borrowing. He suggests that higher taxes on the wealthy are the fairest way to tackle the deficit.

Democrats cite several reasons to raise taxes on high-income households. Obama campaigned for such tax increases in 2008 and 2012 but accomplished them only partially with the "fiscal cliff" resolution of Jan. 1.

Major tax cuts in 2001 and 2003 played big roles in turning a federal budget surplus into soaring deficits, according to research by the Congressional Budget Office and others. And by many measures, the U.S. tax burden in near historic lows.

Households earning roughly the national median income paid, on average, 11.1 percent of their income in total federal taxes in 2009, the most recent year for such data. That's the lowest level in more than 30 years, the CBO says.

Nonetheless, House Republicans have placed their highest priority on refusing to raise income tax rates, effectively ranking it above all other goals.

"The president got his tax hikes on Jan. 1," House Speaker John Boehner, R-Ohio, is fond of saying. It's a reference to the $620 billion in new revenues, over 10 years, that Republicans were unable to stop because of the "fiscal cliff" law, resolved on New Year's Day.

If it's easy to make a case for higher revenues, the same is true for slowing the growth of Social Security and Medicare benefits. For decades, studies have warned of approaching trouble in these popular but costly programs, as health care costs rise and baby boomers begin to retire.

"Both Medicare and Social Security cannot sustain projected long-run program costs under currently scheduled financing, and legislative modifications are necessary to avoid disruptive consequences for beneficiaries and taxpayers," the Social Security Administration says, summarizing findings by the two programs' trustees.

"The early detection light has been going on for a while, and there has been a failure to act," Social Security trustee Charles P. Blahous recently told a House panel. If lawmakers are to preserve the programs for future retirees, he said, they will have to accept much more "political pain" than officials endured during a 1983 overhaul that included "several extremely controversial measures."

Obama has proposed an often-discussed step, which deals with government accounting in general, not just entitlement programs. If Congress agrees to higher tax revenues, the president said, he would back a slower growth calculation for cost-of-living increases for Social Security benefits, plus higher Medicare premiums for higher-income seniors.

Interest groups have criticized both ideas. AARP calls the slower cost-of-living formula a "harmful change," and urges seniors to oppose it.

American voters can largely blame themselves when Congress is more talk than action on deficit reduction. Americans routinely say they want a smaller federal debt, but not at the cost of programs they hold dear â including Social Security and Medicare.

A CBS News poll in March found that most Americans want to cut spending and raise taxes to reduce the deficit. But 4 in 5 oppose cuts to Social Security or Medicare. And two-thirds are unwilling to have their own taxes raised in the name of deficit reduction.

When Pew Research asked which was more important â reducing the national debt or keeping Social Security and Medicare benefits as they are now â the public sided with safeguarding the benefits programs, 53 percent to 36 percent.

The deficit-spending partisanship continued Wednesday. On a party-line vote, House Ways and Means Committee Republicans passed a bill to protect Social Security recipients and investors in Treasury bonds if the government hits its borrowing limit and can't pay all its bills later this year. Democrats say if the federal government starts reneging on any obligations â even if it pays bondholders â financial markets will lose faith and the economy will tank.

Some Democrats fear a lose-lose situation if they support Obama's proposals. First, they could be attacked from the left for tweaking the programs that many Democrats see as their party's greatest legacy. And second, Republicans might accuse them of "raiding Medicare" in next year's congressional elections. That battle cry proved effective in 2010 after Obama's health care overhaul bill was passed.

Democrats call such tactics shamelessly hypocritical. Republicans, they note, have long called for reining in entitlement spending.

Boehner rebuked a top GOP campaign figure for hinting at a renewal of the "raiding Medicare" attacks. But Reince Priebus, the national Republican Party chairman, seemed eager to revive the question of whether Democratic trims to Medicare's costs amount to an unfair cut in benefits.

9. Read the AP article âDems, GOP talk up deficit reduction, but don't act (Links to an external site.)â by C. Babington (Apr25â13).

a. What are the two basic ways of shrinking a budget deficit?

b. Which of your answers above are Republicans vehemently against? What are the potential negative economic effects of implementing this basic policy?

c. Which of your answers above are Democrats strongly opposed to? What are the potential negative economic effects of implementing this basic policy?

lavenderpug75


(Please Summerize the work down below, thank you)

Political	Economic
Growing political influences on healthcare advances	Cost of living increases
Global government influence on healthcare cost	Cost of insurance prices
Government control of Medicaid, Medicare funding	Rise of forecasted interest rates
Social/Cultural	Technical or Technology
Increase average age of population	Demand on new medical treatments
Patient expectations increase	Customize treatments
Demographics are in constant change	More advance service facilities
Environmental	Legal
Growing need for green business	Constant change of government drug Regulations
Environmental agenda and community awareness	Consumer laws
	Health and safety regulations



Porters 5 forces of business model

Competitive Rivalry
Growth opportunity for healthcare companies are expected to growing the next few years
Increase in new revolutionary drugs both in and outside of the US

Threat if New Entrants
Strict government regulations
Difficult to keep up due to constant change
Huge startup cost

Substitute Products
Threat of other substituting product and service at lower cost



Bargaining Power of Customers
Generic drugs offered at large discount to consumer
Larger less customized healthcare facility with lower housing costs
Several facilities offering similar services.

Bargaining power of supplier
Medical suppliers have a large pricing power
Bargaining power of physicians and nurses is huge because of large hospital benefits

Swot Analysis

Strengths

Highly trained and capable employees

Market experience

Strong leadership

High level of organizational efficiency

Excellent facilities

Strong commitment to bettering the community

Weaknesses

Increased cost of healthcare could lower our clientele

Limited staff resources

Limited cash flow to hire and train new employees

Lack of resources

Opportunities

Fast growing technology opens new doors for using state of the art equipment to better serve the patients.

Nursing and residential care is one of the fastest growing industries

Aging population

Threats

Uncertainty in political and economic climate causes hesitation for receiving new patients.

Funding constraints

Highly competitive market

Product or Service Analysis

Our services will be used by patients who cannot afford experimental treatments and patients who have been abandoned by the system because hospitals can no longer provide medical assistance. At our facility, we will be able to work with the families and provide them with different payments options, such as low monthly payment plans. Our main goal is to be able to treat the patient at a very affordable cost; however, if any patient does not possess the means to pay for treatment, he or she would not be turned away; our facility will tap into government and private funding to cover treatment cost.

The beauty of this service is that there isnât a charge of any kind to take part in our program because it is completely funded by government grants. Individuals that would take part would more than likely not have the means to pay a monthly deductible. Due to the nature of the business listed as a non-profit agency, there is no way to make a profit of any kind, as it would jeopardize the business in its entirety.

Some of the market factors that create a demand for our services include the need of medical care after having maximized all resources, the number of low income families, and the number of patients facing health issues needed extended medical care.

Opportunities that may derive from this business is the opportunity to expand and open multiple facilities, while extending a helping hand to many more in need. The risk, however, is the unstable funds deriving from grants. This can pose a huge treat to the business, as grants often times come and go and cannot be counted on as a constant income.

After studying the healthcare system and current policies in place, data shows many individuals facing severe health issues usually go untreated and uncared for due to the outrageous cost of medical care. It is devastating to see how often people, especially the elderly, are sent home and forgotten for the mere reason that hospitals and doctors are not willing to care for patients without financial means. In fact, in 2009 Harvard news reported 45,000 annual deaths due to lack of health coverage in the U.S. alone, which is significantly higher than the 18,000 reported by USA Today in 2002.

Financial Analysis

Clermont will be a nonprofit organization, dedicated to help the most needed. To open the facility fully operational we must take in consideration some fixed expenses like the land acquisition, permits, interest, brokers, administration fees, professionals (facility setup), staff, reports (environmental, occupational, fire, FDA), electricity, water, phone, water & sewer , connections, taxes, insurance, management, security, advertising, accountants, food, lawn mowers, bank fees, etc.

The facility will need have a total value of approximately three million dollars, but if we break the price of the land acquisition in to a thirty (30) year mortgage we can star up the business with an investment of approximately $ 233,944.61 USD to cover the first month of operation including all the startup permits and connections. After the first month the fixed expenses will be $184,444.00 USD with the exception of the months were taxes are due; taxes are around $ 43,000.00 USD paid quarterly will increase the tax month (depending on the facility fiscal year) for $ 10,750.00 USD approximately. We will fund all the costs with private and public funding, fundraiser, events, raffles, and most important with the help of the community.

As we mentioned before, Clermont is a nonprofit organization and we will do everything in our power to give the relief to the families in need. No one will be rejected because they do not have the money or the insurance cannot help. No money will be required from patient and every single dollar received will be spent in the patients, and in improving our facility and our service every day.

We believe our financial even breaking point will be a year after we begin operations, and be profitable soon after. There are many patients in need, and with the government and public grants each person will receive the treatment they need, and we will become the hope of many.

PUBHLTH 122 Lecture Notes - Lecture 11: Patient Protection And Affordable Care Act, Deficit Reduction Act Of 2005, Poverty In The United States

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