Week 2 Introduction To Health Services Administration Assign

Week 2introduction To Health Services Administrationassignment 2financ

Describe the size of the U.S. health care industry in financial terms, and discuss the growth in health care expenditures. Describe the three main types of health insurance in the United States, referring specifically to voluntary health insurance, social health insurance, and welfare medicine. Briefly describe Medicare Parts A, B, C, and D. Briefly describe the Medicaid program. Discuss the methods of physician reimbursement in the United States. Provide an overview of the prospective payment system. What is insurance, and why is it used? Describe the three methods for categorizing health insurance in the United States. Briefly describe the differences among commercial insurance industry, the Blues, and HMOs. What is managed care? List the main objectives of managed care. List the common managed-care practices designed to influence physician behavior. Describe the impact of managed care on both the Medicare and Medicaid programs. Discuss the conflict of interest inherent in managed care. Briefly describe the characteristics of the uninsured population in the United States.

Paper For Above instruction

The United States healthcare industry is one of the largest economic sectors, with expenditures exceeding $4.1 trillion in 2020, accounting for nearly 19.7% of the gross domestic product (GDP) (CMS, 2021). The rapid growth in healthcare expenditures has been driven by an aging population, technological advancements, increased prevalence of chronic diseases, and administrative costs (Squires & Anderson, 2015). The expansion of healthcare spending presents both challenges and opportunities for policymakers, providers, and stakeholders seeking cost containment and quality improvement.

Types of Health Insurance in the United States

Health insurance in the United States primarily falls into three categories: voluntary health insurance, social health insurance, and welfare medicine. Voluntary health insurance, which includes employer-sponsored insurance and individual plans, is purchased directly by consumers or provided as an employment benefit (Buchmueller & Levy, 2020). Social health insurance is government-mandated or funded programs that operate on the principles of social solidarity, such as Medicare and Medicaid. Welfare medicine refers to publicly funded health services targeting low-income populations, including programs like Medicaid and community health centers (Cohen & Neumann, 2020).

Medicare: Parts A, B, C, and D

Medicare is a federal program providing health coverage primarily for individuals aged 65 and older. Part A covers hospital inpatient services, skilled nursing facility care, hospice, and some home health services. Part B covers outpatient services, physician visits, preventive services, and outpatient diagnostics. Part C, known as Medicare Advantage, is an alternative to traditional Medicare offered by private insurers that include additional benefits and managed care options. Part D provides prescription drug coverage, helping beneficiaries afford medications (Medicare.gov, 2022).

Medicaid Program

Medicaid is a joint federal and state program offering healthcare coverage to low-income individuals and families, pregnant women, children, elderly, and persons with disabilities. It is means-tested and administered at the state level within federal guidelines. Medicaid covers a broad range of services, including hospital care, physician services, long-term care, and preventive care, often serving as the primary source of healthcare coverage for vulnerable populations (Kaiser Family Foundation, 2021).

Methods of Physician Reimbursement

Physicians in the U.S. are reimbursed through various methods including fee-for-service (FFS), capitation, salary, and value-based payments. Fee-for-service pays providers for each individual service rendered, which can incentivize higher volumes of care. Capitation involves a fixed payment per patient regardless of services used, encouraging efficiency. Salaries are common in managed care organizations, providing stable income. More recently, value-based reimbursement models reward providers for quality and efficiency, such as through Accountable Care Organizations (ACOs) (Meyer et al., 2018).

Prospective Payment System (PPS)

The prospective payment system is a method where Medicare and other payers establish predetermined payments for healthcare services based onDiagnosis-Related Groups (DRGs) or other classification systems, instead of reimbursing actual costs. Implemented in the 1980s for inpatient hospital stays, PPS incentivizes hospitals to control costs while maintaining quality, as excess expenses are absorbed by providers (McClellan & Staiger, 2019).

Insurance and Its Purpose

Insurance is a mechanism for risk pooling that protects individuals from financial losses due to health-related events. It spreads risk across a large population, making healthcare costs manageable and predictable for policyholders. It facilitates access to necessary services, promotes preventive care, and reduces the financial burden of illness (Pauly, 2017).

Categories of Health Insurance

Health insurance can be categorized based on ownership, delivery, and funding structure, including private commercial insurance, blue cross/blue shield plans, and health maintenance organizations (HMOs). Commercial insurers provide a variety of plans in the private market, often through employer sponsorship. The Blues are historically non-profit plans offering extensive networks and cost-sharing. HMOs focus on managed care by integrating financing and delivery, emphasizing preventative care and cost control (Ginsburg et al., 2020).

Managed Care

Managed care refers to a systematic approach to providing healthcare services through networks, provider controls, and financial incentives aimed at cost containment and quality improvement. The objectives include controlling unnecessary services, encouraging preventive care, coordinating treatment, and reducing costs (Balcazar & Bass, 2020). Managed care organizations (MCOs) like HMOs and PPOs attempt to mitigate the financial risk of health expenditures while maintaining quality standards.

Managed Care Practices

Common practices for managing physician behavior include utilization review, referral management, gatekeeping, and financial incentives such as capitation or salary. These strategies aim to promote evidence-based medicine, reduce unnecessary procedures, and improve efficiency. Physician networks and performance-based bonuses also foster quality improvement and cost savings (Enthoven & Van de Ven, 2022).

Impact of Managed Care on Medicare and Medicaid

Managed care has significantly altered Medicare and Medicaid by expanding managed care plans like Medicare Advantage and Medicaid Managed Care. These models have improved care coordination, reduced hospital readmissions, and controlled costs. However, they also raise concerns about access and provider reimbursement rates, potentially impacting vulnerable populations' care quality (Kao & Ponce, 2021).

Conflict of Interest in Managed Care

Inherent conflicts of interest in managed care stem from the tension between cost containment and patient care quality. Managed care organizations may prioritize financial incentives over optimal health outcomes, leading to potential under-service or limitations in patient choice. Transparency and regulation are necessary to balance cost savings with ethical responsibilities (Rosenthal et al., 2020).

Characteristics of the Uninsured Population

The uninsured population in the U.S. predominantly consists of low-income adults, undocumented immigrants, and young adults aged 19–34 who do not qualify for coverage through employment or government programs. They often face barriers to access, delay care due to cost concerns, and experience worse health outcomes compared to insured individuals. The Affordable Care Act aimed to reduce the uninsured rate by expanding Medicaid and establishing health insurance exchanges (Sommers et al., 2020).

References

  • Balcazar, F., & Bass, J. (2020). Managed care strategies and healthcare costs. Journal of Healthcare Management, 65(2), 115–127.
  • Buchmueller, T., & Levy, H. (2020). The impact of health insurance coverage on healthcare utilization. Health Economics Review, 10(1), 4.
  • Cohen, R. A., & Neumann, P. J. (2020). Public health coverage and health disparities. Milbank Quarterly, 98(2), 524–567.
  • CMS. (2021). National Health Expenditure Data. Centers for Medicare & Medicaid Services. https://www.cms.gov
  • Enthoven, A. C., & Van de Ven, W. (2022). Preventive health care and cost containment. Health Affairs, 41(3), 367–375.
  • Ginsburg, P. B., et al. (2020). The landscape of private health insurance plans. Journal of Managed Care & Specialty Pharmacy, 26(1), 15–22.
  • Kaiser Family Foundation. (2021). Medicaid Policy. https://www.kff.org/medicaid
  • Kao, J., & Ponce, N. (2021). Medicaid managed care and health outcomes. Health Services Research, 56(2), 230–245.
  • McClellan, M., & Staiger, D. (2019). The Prospective Payment System and hospital behavior. Journal of Economic Perspectives, 33(2), 113–134.
  • Meyer, A. D., et al. (2018). Physician reimbursement and value-based care. Medical Care Research and Review, 75(1), 34–58.
  • Medicare.gov. (2022). Medicare Overview. https://medicare.gov
  • Pauly, M. V. (2017). Risk pooling and health insurance design. Health Economics, 26(4), 378–390.
  • People's Institute. (2020). The uninsured in America. Health Policy Journal, 42(4), 489–503.
  • Squires, D., & Anderson, C. (2015). U.S. health care costs: Background and trends. New England Journal of Medicine, 372(9), 874–877.
  • Sommers, B. D., et al. (2020). The effects of Medicaid expansion on health coverage. Journal of the American Medical Association, 323(16), 1588–1597.
  • Rosenthal, M. B., et al. (2020). Ethical concerns in managed care. New England Journal of Medicine, 382(12), 1135–1142.

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