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SP1 > Chapter 5 Healthcare > Flashcards

Chapter 5 Healthcare Flashcards

-Explain components of a well-functioning healthcare. -Analyse the mechanics between the funding and supply of healthcare.

1
Q

What does Healthcare refer to ?

A

-This refers to the diagnosis, treatment and prevention of disease, illness, injury and other physical and mental impairments in humans.

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2
Q

What does a well-functioning healthcare system require?

A
  • robust financing mechanisms
  • a well-trained and adequately-paid workforce
  • reliable information on which to base decisions and policies.
  • well-maintained health facilities and logistics to deliver quality technologies.
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3
Q

Classification of care

A
  • Primary
  • Secondary
  • Tertiary
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4
Q

What is Primary Care?

A
  • Primary care refers to the work of all healthcare professionals who acts as a point of first contact for all patients in the healthcare system.
  • Eg one of the following: physiotherapist, general practitioner, non-physician primary care provider like nurse practitioner.

-This refers to services that are offered in local community.

  • Primary care involves widest scope of healthcare:
  • all ages of patients
  • patients of all socioeconomic and geographic origins
  • patients seeking to maintain optimal health
  • patients with all manner of acute and chronic physical, mental issues.
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5
Q

What is secondary care?

A
  • This refers to the healthcare services provided by medical specialists that don’t have first contact with the patients eg dermatologists, cardiologists & urologists.
  • Sometimes called ‘hospital care’.
  • Patients are usually referred to medical specialists by primary healthcare practitioners. Self-referrals are rare.
  • Secondary healthcare specialists like speech therapists, dietitians, occupational therapists are usually done by self-referrals.
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6
Q

What is tertiary care?

A
  • Tertiary care is a specialist consultative healthcare,
  • usually for in-patients referred by primary or secondary health professional
  • in a facility with personnel and facilities for advanced medical treatment and investigations, such as a tertiary hospital referral.

-examples of tertiary care services are: cancer management, neurosurgery, plastic surgery, surgical investigations, treatment of severe burns, etc.

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7
Q

Healthcare may be supplied by (2)?

A
  • Public sector healthcare

- Private healthcare

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8
Q

What is Public sector Healthcare?

A
  • Healthcare services that are heavily subsidized or provided for free
  • Generally administered by the government.
  • These services are used by individuals without any medical aid.

(Associated with:

  • significant queues
  • prescribed protocols
  • limited alternatives)
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9
Q

What is Private sector Healthcare?

A
  • Healthcare administered by private institutions.
  • Consist of listed and unlisted companies.
  • Any member of the public can use these providers as long as they can fund the cost or are covered by a funding structure such as a medical aid scheme.
  • where insurance does not pay full cost patient liable for difference.
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10
Q

Who are the supply-side key providers?

A
  • doctors
  • nurses
  • support medical personnel and clinical associates
  • hospitals
  • upstream service providers
    1. pharmaceutical manfacturers
    2. medicine distributers
    3. suppliers of medical equipment
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11
Q

Structure and ownership of private hospitals (2):

A
  1. Not-for-profit: Faith based hospitals
    - These hospitals and small hospitals played large role in providing hospitals to the rural poor.
  2. Not-for-profit: Mining hospitals
    - Geographically remote mining companies provide a range of healthcare services to their staff and sometimes families of staff.
  3. For-profit private hospitals
    - These hospitals are either privately owned or listed companies with a direct profit motive.
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12
Q

Upstream service providers

A

-The provision of healthcare sector services is only possible because various other industries supply the necessary goods and services

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13
Q

Funders of Healthcare (4):

A
  • the government
  • non-government organisations and donors : May include foreign governments.
  • out-of-pocket expenditure by the users themselves
  • trade-related employer groups
  • commercial insurance products
  • employers
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14
Q

Funders: Government

A
  • The largest funders of healthcare in a country

- In some instances gov may fund private healthcare to alleviate the public sector demand.

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15
Q

Funders: Out-of-pockets expenditure

A

There are 3 forms of out-of-pocket medical expenditure.

  1. Payment of invoiced medical services by users of commercial health insurance products who are required to:
    - make co-payments
    - fund diff between actual and covered price of service
    - pay for services if threshold payments have been met.
  2. Payments by those that don’t have commercial health insurance products. May include:
    - young & healthy ppl who elected not to take any insurance
    - wealthy ppl who choose to self-insure.
    - lower income ppl
  3. Payments for medical services not invoiced. eg surgeons and midwives.
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16
Q

Funders: Trade-related employer groups

A
  • Trade-related employer or groups often join to form bargaining councils.
  • Bargaining councils are established to manage schemes to benefit their parties or members.
  • These are generally low-income schemes with benefits to primary healthcare and managed care options.
17
Q

Funders: Commercial insurance products (CIP)

A
  • These are various products in the insurance industry that contribute to healthcare costs. Insurance policies designed to fund healthcare can be divided into four groups:
    1. Optimal healthcare
    2. Optimal complement
    3. Compulsory alternative
    4. Compulsory complement
18
Q

Commercial insurance products: Optimal alternative

A

-This would be for a person who uses the public health sector and took insurance to cover expenses in the private sector.

19
Q

CIP : Optimal complement

A
  • a person who took out a waiting policy designed to pay for elective procedures sooner than the state would provide.
  • eg Gap cover
20
Q

CIP: Compulsory alternative

A

-this may be used in an environment in which there are people that government considers can afford to buy comprehensive cover.

21
Q

CIP: Compulsory complement

A

-compulsory top-up plans would be used in an environment where individuals are compelled to buy policies to pay for dental plans and other services not provided by the State.

22
Q

Funders : Employers

A

Employers contribute to financing employee health in various different ways:

  1. full or part payment of commercial insurance products such as medical aid contributions.
  2. full or part payment of bargaining council premiums.
  3. payment for off- and on-site health services.
  4. wellness programmes
  5. payments to healthcare providers for acute medical treatment.
  6. payment towards social security funds as UIF
23
Q

Mechanics between the funding and supply of healthcare

A
  • There is a significant number of funders of healthcare.
  • In most cases, the patient or user is not paying for the service which results in additional risks.
  • The provider has an incentive to provide more expensive or comprehensive treatment than is actually require or the healthcare users abuse the “free” service. This is called “3rd party payer” problem.
  • One way to address this is by using administrators/managed care who are profit organisations.
  • Insurers may use underwriting principles to avoid and exclude risk.
24
Q

Reasons why healthcare cost increases (4)

A
  • fraud
  • static population (aging)
  • medical advances in technology
  • misalignment of incentives between the provider and the payer.
25
Q

Managed care interventions have a number of objectives (5)

A
  • reducing cost of medical events
  • improving the quality of care provided
  • ensuring that medical services are delivered in an appropriate setting
  • ensuring that high-risk members are managed and receive appropriate care.
  • reducing the number of unnecessary medical services.
26
Q

Risks in managed care (5)

A
  • price risk: fee received by provider does not cover expenses.
  • intensity risk: more services are needed than anticipated.
  • severity risk: cases are more severe than anticipated.
  • frequency risk: more people need treatment than anticipated.
  • actuarial and marketing risk: demographics are not as anticipated, thus pricing is incorrect.
27
Q

Strategies used by managed care organisations to meet objectives and minimise risk (5).

A
  • Provider networks
  • Reimbursment methods
  • Risk sharing
  • Risk adjustment
  • Formularies and protocol in managed care
28
Q

Provider networks

A
  • Members may be required to obtain healthcare services from a restricted network of participating providers.
  • Such restrictions are used to manage costs in low-income benefit options.
  • Costs managed either through volume discounts or defined set of clinical protocols and cost benchmarks
29
Q

Reimbursement methods

A
  • The intention is move away from a fee-for-service environment to structure payments to providers in way that encourages them to provide high quality but cost effective healthcare (transfer risk through means of reimbursement)
  • Success operation of reimbursement methods requires:
    1. availability of adequate and reliable clinical data to allow risk taker to ensure treatment complies with the specified clinica protocols and cost benchmarks.
    2. control cycle to ensure clinical protocols are modified based on feedback following an analysis of the outcomes acheived.
30
Q

Risk sharing

A
  • It is not sufficient to designe reimbursement arrangements in isolation as this only involves a transfer to the healthcare providers. Risk sharing is the solution. (give providers sense of security)
  • One should develop sustainable contracts where all parties accept the risks and share in benefits.
31
Q

Axene & Lucas: The principles of designing provider incentives in an optimally-managed delivery system

A
  • natural vs desired objectives
  • provider control
  • equitable risk sharing and sense of partnership with the funder.
  • simplicity
  • provider involvement
  • realistic goals
  • education & suport
32
Q

Axene & Lucas: Incentive structures

A
  • Negative incentives (e.g. Withhold arrangements)

- Positive incentives (e.g. Bonus/surplus sharing)

33
Q

What are negative incentives?

A
  • A fee schedule or other payment rate is negotiated with providers.
  • The initial provider payment is then set at a lesser amount, such as 85% of fee schedule.
  • Some or all of the withheld amounts will be paid if funds exist at the end of an accounting period.
34
Q

What are positive incentives?

A
  • Surplus under this arrange is shared between funders and providers. Surplus = contributions > costs.
  • This surplus is generated by costs being reduced due to cost being reduced below target levels.
35
Q

Risk adjustment

A
  • An alternative reimbursement arrangement.
  • Providers are reimbursed or remunerated based on health risk of their patients.
  • Instead of encouraging providres to compete based on health status of patients they’re incentivised based on efficiency and quality of care provided.
36
Q

Formularies and protocols in managed care

A
  • A formulary is a list of medicines.
  • Managed care organisations use prescribed or constructed formularies and protocols to ensure that appropriate and cost effective drugs are prescribed.
37
Q

Patient concerns with managed care (5)

A
  • provider networks may restrict access to care
  • providers may resent external parties imposing clinic protocols on them and influencing the way in which they practice medicine.
  • managed care may compromise the quality of care provided to patients.
  • the use of formularies and other financial-based managed care initiatives may result in the additional cost being transferred from the scheme to the member with no overall cost reduction.
38
Q

Ensuring quality of care (6)

A
  • Managed care contract needs to ensure that the users of healthcare receive good quality care.
  • The following may be used to assess the quality of care:
    1. patient mortality rate
    2. specialist referral rate
    3. hospital admission rate
    4. procedure complication rate
    5. chronic medication adherence
    6. patient questionnaires

it is critical to standardise the rates for age, ethnicity and other multiple factors that may affect the outcome.

39
Q

Barriers to optimal and equitable healthcare

A
  • Critical shortages
  • Inadequate skill mix
  • Uneven geographical distribution of workforce

SP1 (34 decks)

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