Health Services Midterm Flashcards
(261 cards)
1
Q
Healthcare system objectives
A
- To enable all citizens to receive health
care services (aka ACCESS). - To deliver services that are cost effective
and meet established standards of quality.
2
Q
Health (WHO)
A
state of complete physical,
mental, and social well-being, not just
absence of disease. Relates to access to
medical care and individual needs.
3
Q
Public health
A
the set of activities a
society undertakes to monitor and improve
the health of its collective membership
4
Q
Public Health Mission
A
Fulfilling society’s interest in assuring the
conditions in which people can be healthy.
Its aim is to generate organized
community effort to address the public
interest in health by applying scientific and
technical knowledge to prevent disease
and promote health.
Institute of Medicine (IOM)
5
Q
Key Differences?
Medical Care VS. Public Health
A
Look in Textbook
6
Q
Basic Healthcare Delivery Functions
A
Financing, Insurance, Delivery, Payment
7
Q
Financing and Insurance Mechanisms
A
Employer-based health insurance – (private) • Privately-purchased health insurance – (private) • Government programs (public) – State Employees Group • employees – Medicare • elderly and certain disabled people – Medicaid and CHIP • indigent, poor (if they meet the eligibility criteria), children
8
Q
Characteristics of a free market healthcare system
A
• Multiple patients (buyers) & providers (sellers)
act independently
• Unrestrained competition occurs based on price
& quality
• Patients have information about all available
services, and provider price & quality info
• Patients directly bear costs of services
• Patients as consumers make decisions about
HC services
9
Q
Why is the US healthcare market
referred to as “imperfect”?
A
See text discussion #7
10
Q
10 Characteristics that Differentiate
the U.S. Health Care System
A
- No central agency governs a system
- Access is selective based on insurance
- Health care offered under imperfect market activity
- Third party insurers are intermediaries between
finance and delivery - Multiple payers are cumbersome
- Balance of power, no domination
- Legal risk affects practice behavior
- New technology creates demand for its use
- New service settings along a continuum
10.Quality is achievable
11
Q
Why are some US citizens without
health insurance?
A
See text discussion #5
12
Q
Our System is fraught with
A
– duplication – overlap – inadequacy – inconsistency – waste – complexity – inefficiency – financial manipulation – Fragmentation
13
Q
Triple Aim
A
- improving the experience of care
- improving the health of populations
- Reducing per capita costs of health care
14
Q
Why is it important for healthcare
managers and policymakers to understand
the delivery system?
A
See text discussion #11
15
Q
In the U.S. Health Care System there’s little or no:
A
–networking –interrelated components –standardization –coordination –cost containment as a whole –planning, direction
16
Q
The Blended Public and Private
U.S. Health Care System results in:
A
– multi financial arrangements
– many insurance company with different risk
mechanisms
– many payers
17
Q
Why is cost containment an elusive goal
in US?
A
See text discussion #1
18
Q
Very Brief History
of U.S. Health Care and PH - Eras
A
• Pre-industrial – Pre 1850 – 1850 -1900 • Industrial – 1900 – World War II – World War II – 1980 • Coprorate – 1980s - now
19
Q
External Forces Affecting Healthcare Delivery
A
- Social values and culture
- Political Climate
- Global Influences
- Economic Conditions
- Population Characteristics
- Technology Development
- Physical Environment Figure 1-2
20
Q
Prior to 1850
A
• 14th c. Epidemics - Black Death (plague),
leprosy, cholera, etc – were accepted parts of
life, with no collective response to infectious
diseases possible.
• Age Enlightenment (17-18th c.) start to question
accepted beliefs, expand knowledge of science
• Industrial Revolution ~1790-1860
Urban crowding, unsafe/unsanitary living and
working conditions pandemics
21
Q
Massachusetts Bay Colony
A
• 1639 – Mass. Bay Colony required births and deaths be registered • 1647 – Passed regulation to prevent pollution in Boston Harbor • Smallpox killed several colonies, but by 18th c. sick patients isolated, ships quarantined.
22
Q
Marine Hospital Service
A
• 1798 Pres. John Adams: bill law U.S. Public Health Service Act - Creates Marine Hospital Service to care for sick/injured merchant seamen in American ports 1870: Reorganized loose network locally controlled hospitals centrally controlled –Washington, D.C. – Supervising Surgeon Surgeon General
23
Q
What happened in 1850
A
• Lemuel Shattuck’s Report of the Sanitary
Commission of Massachusetts, 1850 outlined
current/future PH needs for state
been called the “bible”
became blueprint for American PH system
– Called for state and local health departments to be
established, happened a few decades later
• Sanitary inspections, communicable disease
control, food safety, vital stats, services for kids
24
Q
Building PH Infrastructure
A
• 1878-9: National Port Quarantine Act
– Made federal government responsible for identifying and
dealing with disease outbreaks current PHS, CDC
• 1910 Flexner Report on medical ed/schools,
“profession” begins. AMA control licensing.
• 1912: Marine Hospital Service PH Service
– with broader responsibilities
• 1922: Sheppard-Towner Act (MCH)
• 1929: First pre-paid group practice
• 1930: NIH established
25
Infrastructure, cont
• 1930s: FDR and the New Deal era
– PH Service supported by Congress, expanded
• 1935: Social Security Act, cash assist
programs
• 1939-45 WWII –need more hospitals, docs
• 1946 Hill-Burton = Hospital Survey and
Construction Act, built lots of hospitals with
fed govnt paying half construction cost
• 1946: CDC created
26
1950-60s
| Filling gaps in med care delivery
• 1950s - advances in medical technology, more
interest in health insurance, docs as solo
practitioners
• Rising demand, rising premiums
• 1953 – fed Dept Health, Educ & Welfare
• LBJ War on Poverty
• 1960 Kerr Mills Act – funding for voluntary state
Medicaid-like programs to cover aged poor, but
not much state participation
• 1964 Excess capacity, Hill Burton shifts to
modernizing facilities instead of building
27
1965
• MEDICARE & MEDICAID CREATED
– Officially, Title XVIII and XIX respectively
– Part of President Johnson’s “Great Society”
– Expand social insurance
– Start to recognize personal medical care as
part of public health
– To be examined in greater depth near the end
of the term (Section IV topics)
28
1970s
```
• Certificate of Need (CON) laws
– Too many hospitals (Hill Burton folds)
• National Health Service Corp
– shorter length of stay, more ambulatory care
• 1973 – HMO Act - mandatory dual choice
– Competition instead of regulation
• 1974 - Health Planning and Resource
Development Act
```
29
1980s
• Too many docs, specialists; not in right
place oversupply and maldistribution
• Managed Care takes off
• High health care costs
• Start to care more about assessing quality
– 1986: National Practitioner Data Base (NPDB)
started
– 1987: create Nursing Home datasets
30
1990s – 2000s
• Demographic shift Population aging
• Hospital not center of HC; part of system
• Reimbursement changes (to contain costs)
• Welfare to Work programs
• 1997 Balanced Budget Act (BBA)
– SCHIP
– Medicare + Choice
• 1999: More diverse health staff practicing -
NPDB includes other medical staff
• 2006: Medicare Part D – prescription drugs
31
Examples of 21st c.
| Public Health Threats (Table 6.1)
Terror/Natural Disasters/Disease
Active attacks/Earthquakes/Anthrax
Economic attacks/Tsunamis/Avian Influenza
Commerce/Hurricanes/Botulism
Interfer w/food, water, etc./Wildfires/ Ebola & hemorrhagic fever
Internet/Floods/Hantavirus
32
Recap PH lessons from history
• 1st organized PH activities in local seaport
villages and focused on problems in those
communities, later expanded to state/fed.
• Focus on infectious chronic diseases
• Categorical disease-specific approach
33
Trends last few decades
```
• Acute care primary care
• Illness wellness
• Independent institutions integrated
systems
• Inpatient outpatient
• Individual health community wellbeing
• Fragmented care managed care
• Service duplication continuum of
services
```
34
Biomedical Model
1. The existence of an illness or disease
2. Seek and use care
3. Find relief of symptoms and discomfort
4. Diagnosis of illness and treatment of disease to
restoration
5. Once relief is obtained, the person is considered well,
whether or not the disease is cured
35
Implications of the Biomedical Model
See book
36
Public Health Mission
Fulfilling society’s interest in assuring the
conditions in which people can be healthy.
Its aim is to generate organized
community effort to address the public
interest in health by applying scientific and
technical knowledge to prevent disease
and promote health.
Institute of Medicine (IOM)
37
PUBLIC HEALTH &
| PREVENTION
```
Anticipatory action taken to reduce the
possibility of an event or condition
occurring or developing, or to minimize the
damage that may result from the event or
condition if it does occur.
```
38
Wellness Model
Efforts and programs that prevent disease and
| optimize well-being
39
Three factors that the Wellness Model is built on
1) understand risk factors
• done through a health risk appraisal
• when known, interventions can take place
2) intervention
• behavior modifications
• therapeutic (primary, secondary, tertiary
prevention)
3) adequate public health and social services
40
Therapeutic Preventions
• Primary: activities to decrease or restrain the
problem or develop that a disease will occur
– Smoking cessation to prevent lung disease
– Handwashing to decrease spread of infection
• Secondary: early detection and treatment of
disease to block progression of disease or injury
– Pap smears, mammograms, prostate exams
• Tertiary: rehabilitation and monitoring to prevent
further injury or complications
– Turning bed-bound patients
41
Blum’s Force Field & Well-being
| Paradigms of Health
Force Fields:
– Environment
• Physical, social, cultural, and economic factors
– Lifestyle
• Behaviors, attitudes toward health
– Heredity
• Current health and lifestyle practices are likely to
impact future generations
– Medical care
• Health care delivery system (access, availability of
service)
42
Healthy People 2020
Healthy People provides science-based, 10-year
national objectives for improving the health of all
Americans. For 3 decades, Healthy People has
established benchmarks and monitored
progress over time in order to:
- Encourage collaborations across sectors.
- Guide individuals toward making informed
health decisions.
- Measure the impact of prevention activities.
43
Healthy People 2020 Mission
• Identify nationwide health improvement priorities.
• Increase public awareness and understanding of the determinants of health,
disease, and disability and the opportunities for progress.
• Provide measurable objectives and goals that are applicable at the national,
State, and local levels.
• Engage multiple sectors to take actions to strengthen policies and improve
practices that are driven by the best available evidence and knowledge.
• Identify critical research, evaluation, and data collection needs.
44
Healthy People 2020 Goals
• Attain high-quality, longer lives free of preventable disease, disability, injury,
and premature death.
• Achieve health equity, eliminate disparities, and improve the health of all
groups.
• Create social and physical environments that promote good health for all.
• Promote quality of life, healthy development, and healthy behaviors across
all life stages.
45
New for 2020
• Adolescent Health
• Blood Disorders and Blood Safety
• Dementias, Including Alzheimer’s Disease
• Early and Middle Childhood
• Genomics
• Global Health
• Healthcare-Associated Infections
• Health-Related Quality of Life and Well-Being
• Lesbian, Gay, Bisexual, and Transgender Health
• Older Adults
• Preparedness
• Sleep Health
• Social Determinants of Health LHI: Increase the proportion of
students who graduate with a regular diploma 4 years after starting
9th grade
46
HP 2020
| Foundational Health Measures
1. General Health Status
2. Health-related quality of life and wellbeing
3. Determinants of health
4. Health disparities
47
1. General Health Status Measures
```
Life expectancy
Healthy life expectancy
Years of potential life lost (YPLL)
Physically and mentally unhealthy days
Self-assessed health status
Limitation of activity
Chronic disease prevalence
```
48
Physical Health Measures
Morbidity
Mortality/Longevity
Disability
49
2. Health related quality of life
```
• domains related to physical, mental,
emotional and social functioning
• IMPACT of disease on HRQoL
• Select examples
– Pain
– Satisfaction with relationships
– Emotional distress
```
50
3. Determinants of health
```
• The range of personal, social, economic,
and environmental factors that influence
health status are known as determinants
of health.
• Determinants of health fall under several
broad categories (HP 2020):
– Policymaking
– Social factors
– Health services
– Individual behavior
– Biology and genetics
```
51
4. What are “health disparities”?
Health disparities are differences in the
incidence, prevalence, mortality, and
burden of diseases and other adverse
health conditions that exist among specific
population groups in the United States.
– NIH Strategic Plan to Reduce and Ultimately
Eliminate Health Disparities, 2001
52
Language of health disparities
• “Disparities” is typical U.S. term
• “Variations” is sometimes used in England
• “Inequalities” is common in Europe
All generally refer to differences
53
The Equitable Distribution of Health
```
• We have scarce resources.
1. How much health care should be
produced?
2. How should health care be distributed?
– Distribution creates inequalities
– Need justice and fairness
```
54
Theories of Equitable Distribution
```
Two Contrasting Principles:
– Market Justice
• The Economic Good
– Social Justice
• A Social Good
```
55
How is HC rationed
in a market justice vs social justice
system?
Review question 12
56
Characteristics/Implications Market Justice
Book
57
Characteristics/Implications Social Justice
Book
58
Health Services Utilization Specific
| measures
– # visit in last year/total population
– Report % or avg visits per person per year
– Can specify type of care or provider seen
59
Health Services Utilization Institution-Specific measures
– Occupancy rate or average daily census
| – ALOS
60
5 A’s OF ACCESS
* Accessibility
* Acceptability
* Accommodation
* Affordability
* Availability
61
Medical Home
```
• Patient-centered
• regular source of (primary) care
• Key features of primary care
– Accessibility
– Comprehensiveness
– Continuity
– Coordination
– Accountability
```
62
NHIS Stands For
National Health Interview Survey
63
CHIS Stands For
CA Health Interview Survey
64
NHANES Stands for
National Health & Nutrition Examination Survey
65
HHANES stands for
Hispanic Health and Nutrition Examination Survey
66
CDPH stands for
CA Dept of Public Health
67
Fertility Trends
• Peak childbearing is between 25-29 years
• Fertility has shifted to an older group of
women for the majority of child bearing
• Percentage of live births to unmarried
women has greatly increased since 1970.
– Overall one-third of all births are to unmarried
women in the United States
68
Life Expectancy is
• Life expectancy at birth = the number of years of
life expectation upon birth.
• Life expectancy varies from country to country,
but country differences are more moderate by
age 65.
• Females live significantly longer than males
• Life expectancy at 65 years = the number of
additional years of life expected once an
individual reaches 65 years.
69
US Infant Mortality Rate
7.1 in 1999, 6.1 in 2011
70
IMR US Ranking 2011
175 (#5 lowest number of deaths)
71
TOP 10 KILLERS (2009 final)
1. Heart disease
2. Malignant neoplasms (cancers)
3. Chronic lower respiratory diseases
4. Cerebrovascular diseases (strokes)
5. Accidents/Unintentional injuries
6. Alzheimer’s disease
7. Diabetes mellitus
8. Influenza and pneumonia
9. Nephritis, nephrotic syndrome and nephrosis (kidney)
10. Intentional self-harm (suicide)
72
Cancer survival rates are impacted by numerous
| factors including
detection, treatment,
| compliance, and technology
73
Motor Vehicle Accidents
• An estimated 40,000 people are killed and
approximately 2,000,000 are injured
annually in vehicle-related accidents.
• Vehicular mortality is substantially higher
for males (of all ages) than females.
• Vehicular mortality has declined over time
but remains inexcusably high.
74
Chronic Disease Prevalence
• Chronic diseases are the leading cause of death and
disability in the US causing 7 out of 10 deaths each year.
Heart disease, cancer, and stroke alone cause more
than 50 percent of all deaths each year.
• In 2008, 107 million Americans—almost 1 out of every 2
adults age 18 or older—had at least 1 of 6 reported
chronic illnesses:
• Cardiovascular disease
• Chronic obstructive pulmonary disease (COPD)
• Arthritis
• Diabetes
• Asthma
• Cancer
75
The Structure of
| Organized Public Health Efforts
3 levels of govnt (fed, state, local) each play
different roles in each of 3 major goals:
• Assessment - Know what needs to be done
• Policy development - Being part of the solution
• Assurance - Make sure it happens
76
Assessment
* Surveillance
* Identifying the public’s needs
* Analyzing the causes of problems
* Collecting and interpreting data
* Monitoring and forecasting trends
* Research
* Evaluation of outcomes
77
Policy Development
* Establishing specific goals
* Developing ways to achieve these goals
* Allocating resources
78
Assurance
```
• Ensures that necessary services are
provided in order to reach established
goals.
• Involves implementation of legislative
mandates and the maintenance of
statutory responsibilities.
```
79
Federal Government
| Public Health Activities
1. Documenting health status in the U.S.
2. Sponsoring research on basic and
applied sciences (NIH)
3. Formulating national objectives and
policy (like Healthy People 2020)
4. Setting standards of performance of
services and protection of the public
5. Providing financial assistance to state and local governments to carry out predetermined programs.
6. Ensuring that personnel, facilities, and other technical resources are available to carry out national priorities.
7. Ensuring public access to health care
services.
8. Providing direct services to certain subgroups of the population.
80
Federal Health Bureaucracy Key agencies
– Department of Health and Human Services
(DHHS)
– Department of Veterans Affairs (VA)
• Provides comprehensive care to veterans who
were not dishonorably discharged
– Department of Defense (DOD)
• TriCare Provides health insurance to current and
retired military personnel and their families
81
THE DEPARTMENT OF HEALTH AND
| HUMAN SERVICES is...
the United States
government's principal agency for protecting
the health of all Americans and providing
essential human services, especially for
those who are least able to help themselves.
82
DHHS Facts
• HHS REPRESENTS ALMOST A QUARTER OF ALL FEDERAL
OUTLAYS, and it administers more grant dollars than all other federal
agencies combined. HHS' Medicare program is the nation's largest health
insurer, handling more than 1 billion claims per year. Medicare and
Medicaid together provide health care insurance for one in four Americans.
• HHS WORKS CLOSELY WITH STATE AND LOCAL GOVERNMENTS
• 300+ HHS programs are administered by 11 operating divisions
• In addition to the services they deliver, the HHS programs provide for
equitable treatment of beneficiaries nationwide, and they enable the
collection of national health and other data.
• HHS Budget, FY 2008 -- $707.7 billion
• HHS employees – 64,750
83
ACF stands for
Administration for Children and Families
84
AoA stands for
Administration on Aging
85
AHRQ stands for
Agency for Healthcare Research and Quality
86
CDC stands for
Centers for Disease Control and Prevention
87
CMS stands for
Center for Medicare and Medicaid Services - $606.9 billion largest portion of budget (FY08)
88
FDA stands for
Food and Drug Administration
89
HRSA stands for
Health Resources Services Administration
90
IHS stands for
Indian Health Services
91
NIH stands for
National Institutes of Health
92
SAMHSA stands for
Substance Abuse and Mental Health Services Admin.
93
ATSDR stands for
Agency for Toxic Substances and Disease Registry
94
Newest member of the DHHS family is...
Office of the Assistant Secretary for
| Preparedness and Response (ASPR)
95
Current DHHS Secretary
```
Kathleen Sebelius
• country’s highest-ranking
health official
• member of the President’s
cabinet
• powerful voice for
reforming our health system
```
96
Current Surgeon General
```
• Vice Admiral Regina M. Benjamin, M.D.,
M.B.A.
• “America’s doctor”
• Provides best scientific
evidence on health issues
• Appointed by President
(Senate consents)
```
97
Principal governmental entity responsible
for the active protection of the public’s
health in the United States
```
State Government
Police Power – power to enact and
enforce laws to protect and promote the
health and safety of the people
PH 648 Health Policy
```
98
State Government
| Public Health Activities
```
1. Collecting and analyzing health statistics
to determine the health status of the
public.
2. Providing general education to the public
on matters of public health importance.
3. Maintaining state laboratories to conduct
certain specialized tests required by
state law.
4. Establishing and enforcing public health
standards for the state.
5. Granting licenses to health care
professionals and institutions and
monitoring their performance.
6. Establishing general policy for local
public health units and providing them
with financial support.
```
99
Local Government
| Public Health Activities
• Local health departments are the front line of
public health services.
• These departments are directly responsible for
carrying out the policies and strategies decided
upon by federal and state agencies.
1. Vital statistics
2. Communicable disease control
3. Environmental sanitation
4. Maternal and child health
5. Health education of the public
100
What is Medical Technology?
```
• The application of scientific and technical
knowledge that results in improved
medical care
• It includes both human and nonhuman
inputs used in the production and
management of medical goods and
services
Examples: Biomed, HIT, Durable/Non-durable, Pharma
```
101
Information Technology (IT)
• IT deals with the gathering, storage,
analysis, and transformation of data so it
becomes useful information for health care
professionals, managers, payers, and
patients
102
IT Applications
* Clinical information systems
* Administrative information systems
* Decision support systems
103
Management Uses of IT Outputs
* Evaluate financial performance
* Measure utilization of services
* Assess clinical quality
* Determine trends in health care delivery
* Control costs
* Improve productivity
* Strategic planning
* Demand assessment
104
Health Informatics
• IT application – requires IT, goes further –
applies info science to improve efficiency,
accuracy, and reliability of HC services
105
4 components of fully developed EHR according to the IOM in 2003?
Must collect/store health info
Must be immediately accessible
Must have knowledge support
Must support all of healthcare delivery
106
Confidentiality Concerns in EHR
```
• Health Insurance Portability and
Accountability Act, 1996 (HIPAA)
• Legal uses of personal medical
information:
– Health care delivery
– Operations
– Reimbursement
• Organizations must devise methods to
safeguard transfer and disclosure of
personally identifiable information
• Criminal penalties for violation of the law
```
107
E-health is...
```
• Internet based
– Health related information
– Educational materials
– Commercial products
– Services
• The above can be provided by anyone,
professional or nonprofessional
```
108
Provider can use the internet in the following ways...
```
• Register patients
• Referrals
• Ordering of pharmaceuticals and other
products
• Physicians can get a head start on their
hospital rounds
• Virtual physician visits
```
109
Telemedicine
```
• Distant delivery of medical treatment
• No face-to-face contact between patient
and provider
• It also enables generalists to consult
specialists located at a distance
Synchronous – real time
Asynchronous – review info later
```
110
What is the Impact of Technology
* Quality
* Access
* Cost
* Patient Quality of Life/ Clinical Experience
* Organization/Structure and Process
* Ethics
111
How has quality of care been impacted by medical technology?
```
• Treatments that previously did not exist
• Improved diagnosis and treatment
• Greater effectiveness
• Less invasive procedures
• Safer procedures
• Better outcomes:
– Quick recovery
– Increased life expectancy
– Decreased morbidity and disability
```
112
How has access been impacted by medical technology?
– Mobile equipment
– Telemedicine – impact on global medicine
– Indirectly, technology may reduce access by making
services less affordable
113
How have health care costs been impacted by medical technology?
```
– Single most important factor in medical cost inflation
• Costs are associated with
– Acquisition of new technology
– Training of personnel
– Housing and settings
– Utilization –most effect on cost inflation
– Some technologies reduce costs
– Most cost reductions are indirect
o Reduced hospitalizations
o Some may reduce labor costs
o Error reduction
```
114
Impact of Medical Technology on Quality of Life?
– Enables people with chronic conditions and
disabilities to live normal lives
– Prosthetic devices for speech, hearing,
vision, and movement
– Pain management
– Greater independence and control in the
hands of patients
115
Impact of Medical Technology on Structure and Processes?
– Large, state-of-the-art medical centers
– Alternative settings, such as home health and
outpatient
– Telecommunication applications in continuing
education
– Managed care became possible because of
information technology
116
What is the Impact of Medical Technology?
```
• Bioethics
• Medical technology presents some serious
ethical dilemmas
– Spare embryos left over from in vitro
fertilization
– Genetic cloning
– Stem cell research
– Life support technologies
```
117
Other Major Policy Issues related to medical technology?
1. Priorities determined by government may
take precedence over mandates set forth
by the scientific community.
2. The best way to evaluate returns from a
public investment in basic science
research.
3. Private sector benefits achieved as a
result of significant public investments in
basic science research.
118
Ways to control Tech growth?
• Central planning to determine how much
tech available, and where
• Withdraw federal funding for R&D
• Change medical training, emphasize PCP
• Reduce # med specialty training slots
• Curtail ins payments for expensive med tx
• Impose controls on pharmaceutical prices
(will in turn affect $ available for R&D)
119
Examples of HIT Legislation
• 2010 – ACA (Affordable Care Act) included requirements for new electronic
systems
• 2009 – ARRA included new guidelines for the promotion
and funding for health IT, and for meaningful use EHR.
Part 4 is the HITECH Act.
• 2005- Patient Safety Act - Medicare nurse staffing and
patient outcomes data and information publicly available.
• 2000 - Medical Error Reduction Act of reporting systems
to reduce medical errors and improve health care quality.
• 1996- HIPAA Law – provisions for electronic health
information transactions and systems.
120
3 stages in the
| development of medical technologies
```
1. Scientific background and development
of the idea for a product
2. Product development, approval, and
distribution of product
3. Diffusion, adoption, and utilization of the
product (acceptance by docs, patients)
```
121
Stage 1 of medical technology development consists of:
• Basic science discoveries that provide a
fertile environment from which useful
products may eventually emerge
• San Diego - top 10 biotech city
• National Institutes of Health (NIH) plays a
critical role in this stage by providing funds
to many organizations ($29B budget,2006)
122
Stage 2 of medical technology development consists of:
• Product development
– Process of moving from basic research to
implementation
– R&D
Stage 2 Questions
Is there a need and a viable market for this
product?
Can an appropriate product be developed that
accomplishes what the basic science research
suggests it can?
Can the necessary tests and clinical trials be
carried out to win the regulatory approval
required for public sale and use of the
product?
123
Stage 3 of medical technology development consists of:
• Mixture of scientific promotion to technical
experts and general marketing to the
health care system.
• Availability of health insurance coverage
for new products is a major factor in the
eventual diffusion and use of new
technology.
124
FDA must approve:
all drugs and
pharmaceuticals, all medical devices, and
some medical equipment.
125
Summary of FDA Legislation
• 1906 Food & Drugs Act - FDA authorized totake action only after drugs sold cause harm.
• 1938 Federal Food, Drug& Cosmetic Act -
evidence of safety required before new
drugs/devices can be marketed
• 1962 Drug Amendments - FDA in charge of reviewing efficacy and safety of new drugs
• 1976 Medical Devices Amendments –
premarket review of med devices authorized
• 1983 Orphan Drug Act – drug manufacturers given incentives to produce new drugs for rare diseases
• 1990 Safe Medical Device Act – HC facilities must report device-related injuries or illness to manufacturers (if death-also report to FDA)
• 1992 Prescription Drug User Fee Act – FDA can collect application fees from drug co to help speed up approval process
• 1997 FDA Modernization Act - allow fast-track approvals for life saving drugs when expected benefits > existing therapies
126
Who evaluates medical technologies?
```
• Review by regulatory agencies (like FDA)
• Technology assessments used by health
insurance carriers (make payment
determinations)
• Appraisals by purchasers
```
127
Pharmaceutical Industry
| Procedures to Ensure Safety
```
• Pre-clinical safety assessment
• Pre-approval safety assessment in
humans
• Safety assessment during FDA regulatory
review
• Postmarketing safety surveillance
```
128
Preclinical Testing
• Sponsor must evaluate the product’s
safety and biological activity through in
vitro and in vivo animal testing.
– Develop pharmacologic profile of product’s
effects.
– Determine its acute toxicity in at least two
animal species.
– Conduct short-term toxicity studies.
129
Phase I of Clinical Trials
• Typically involves less than 100 healthy
human volunteers.
• Purpose: Observe how drug works in
humans, to determine general safety, see
if there are any unexpected side effects.
• Clinical effectiveness is not measured
during this phase.
130
Phase II of Clinical Trials
• Typically involves 250+ subjects.
• Purpose: Obtain a first reading about the
potential effectiveness of the drug and to
determine whether it is appropriate for the
trial to progress to the next phase.
• Phase II also provides additional
information on safety and side effects.
131
Phase III of Clinical Trials
• Typically involves 1000+ subjects.
• Purpose: Determine drug’s effectiveness
and to see if side effects will need to be
considered.
• If the FDA is satisfied with the results, the
sponsor must submit an application to the
FDA for approval as a new drug (NDA).
132
Phase IV of Clinical Trials
```
• Sponsor must continue to monitor patient
experiences with the new drug and report
any adverse events within 15 days
• Purpose: Pick up on any previously
unexpected adverse reactions that may
only appear with longer term or
widespread use of the medication.
```
133
Post Approval
| Safety and Marketing
• Safety is monitored for the life of a drug.
• Industry must comply with all FDA
regulations including labeling, Internet and
television advertising, and direct-toconsumer
marketing.
134
Drug Development Timeline
* Preclinical trials ~ 6 years
* Clinical trials ~ 7 years
* Final NDA approval ~1-2 years
135
The Pharma R & D Process
```
• On average, it takes 10-15 years total
and costs more than $800 million to
advance a potential new medication to an
FDA approved treatment.
• Only one out of five medicines are
approved by the FDA.
```
136
Insurance Coverage of new technology
What criteria are used to evaluate a technology?
What are the strengths & limitations
of this assessment process?
137
Does your new technology get
| adopted?
• Do physicians recommend it?
• Do clinicians and organizations think the
new equipment is necessary?
• Does the consumer know about it and ask
for it?
– Consumer driven
– Direct-to-consumer (DTC) advertising
138
What is the power of drug advertisements?
• KFF (Kaiser Family Foundation) 2003 study on the effects of DTC
advertising on prescription drug spending
• On average, $1 spent on DTC ads yielded about
$4.20 more in drug sales in 2000
• May lead to overuse of meds that are not
medically necessary (that’s poor quality care)
139
How much is Pharma spending?
```
• Last year pharmaceutical companies
spent $33 billion on research to develop
new and better medications.
• Since 1990, scientists in the U.S. have
invented more than 300 new medicines,
vaccines, and biologics approved by the
FDA to treat over 150 conditions.
```
140
How are drugs patented?
• In the United States, patents are granted
according to strict standards set forth by
trained examiners at the U.S. Patent and
Trademark Office (USPTO).
• Patents allow scientists to maintain
exclusive right to an intervention that
allows them to recover the extensive costs
of developing a new drug.
141
Healthcare is what % of GDP?
17.6% in 2009
142
Healthcare is what % of labor force?
3% - Largest and most powerful employer
143
Factors Contributing to the
Increased Supply of Health Care
Professionals
* Technological growth
* Specialization
* Health insurance coverage
* Aging population
* Emergence of ambulatory clinics
* Array of post-hospitalization venues
144
Major HC Workforce Policy &
| Planning Issues
• Are there enough providers? (#, supply,
now and in future)
• Do we have the right kinds of providers?
(most cost-effective combo; NP or RN?)
• Are they doing the right type of work?
(services most needed? General/specialist?
Primary vs. LT care?)
• Are they practicing in the right places?
(distribution & location; urban/rural)
• Is their demographic composition
appropriate? (Women, men, minorities?)
• Do they work together appropriately?
(Multi-disciplinary teams)
145
Occupational Classification - Doctor level
```
• Professional Specialty Occupations - Dominant Professionals
–Health Diagnosing
• Physicians and osteopaths
• Dentists
• Optometrists
• Other “dr level”
– Psychologists
– Podiatrists
– Chiropractors
```
146
Occupational Classification – Health Assessment and Treating
* Dieticians & Nutritionists
* Pharmacists
* Physician Assistants
* Registered Nurses
* Therapists
147
Occupational Classification
• Health Technicians, Technologists,
Related Support Occupations
• “Allied Health Professionals”
* Clinical Lab Technician
* Dental Hygienist
* Emergency Medical Tech. (EMT)
* Licensed Professional Nurse (LPN)
* Medical Records Tech.
* Dental Assistants
* Medical Assistants
* Nurses Aides and Psych. Aides
* Pharmacy Assistants
* Physical Therapy Aides
148
Allied health constitutes what percentage of the US healthcare workforce?
60%
149
What are the two broad categories of allied health?
1) Technicians/assistants
| 2) Therapists/technologists
150
What is Osteopathic Medicine
```
• Osteopaths traditionally emphasize the
importance of the musculoskeletal system
on general health, most do residency
• Osteopaths are licensed to practice
medicine and perform surgery in all states.
• Schools: 29 Osteopathy; 133 Allopathic
• <6% physicians are osteopaths
```
151
Major Laws & Reports affecting
| physician supply
• 1910 Flexner Report – “profession” begins
• 1963 Health Professions Educational
Assistance Act (HPEAA) – fed gov student
loans and $ to schools
• Until 1960s, AMA most health policy influence
• 1970 National Health Service Corp –
underserved
• 1971 Comprehensive Health Manpower
Training Act
• 1976 HPEAA – try stop growth, shift age/race mix
• 1980 Graduate Medical Education National Advisory
Committee (GMENAC) Report – expect surplus
• 1981 Omnibus Reconciliation Act – limit schools
• 1988 Council on Graduate Med. Education (COGME)
Report
• 1989 Pew Commission on Health Professions
152
What is the Flexner Report?
Published in 1910 - imposed standards and required that medical schools be accredited by the AMA.
153
Between 1965 and 2005, there was a
XXX increase in the supply of active
physicians.
200%+
154
Factors influencing
| the supply of Physicians
```
• Movement away from managed care
• Increase in the number of female
physicians
• Lifestyle preferences – controllability of
schedule, desire to work less than 40hr/wk
• Population growth
• Increase in average lifespan – work
longer, or retire?
```
155
By the early 1970s, International Medical Graduates (IMGs) accounted for:
more than 40% of new physicians
– 30% filled residency positions
– 20% were active physicians in the United States
• In 2007, there were more than 205,000 IMGs in the United States
– Account for 25% of the total active nonfederal physician population
156
Factors
| Contributing to Supply of IMGs
• Specialties, geographic locations, and
employment settings avoided by U.S.
medical graduates.
• Surplus of residency positions in teaching
hospitals.
• Increased market penetration of managed
care plans in urban areas.
157
Physician Distribution Issues
* Specialty
* Geography
* Age
* Sex
* Race/ethnicity
158
IOM Definition of Primary Care
“The provision of integrated, accessible
health care services by clinicians who are
accountable for addressing a large
majority of personal health care needs,
developing a sustained partnership with
patients and practicing in the context of
family and community.”
159
IOM Five Attributes that are
Essential to the Practice of
Good Primary Care
* Accessibility
* Comprehensiveness
* Coordination
* Continuity
* Accountability
160
Reported Average Annual
| Salaries by Specialty (3+ yrs in practice)
• $140K-$160K
– Family Physician, Psychiatrist, Internist, Pediatrician,
Rheumatologist, Endocrinologist
• $197K-$250K
– Emergency Medicine Physician, Dermatologist, Nephrologist,
OB/GYN, Gastroenterologist
• $265K-$360K
– Anesthesiologist, Plastic Surgeon, Cardiologist, Endocrinologist,
Radiologist, Orthopedic Surgeon, Vascular Surgeon
• Over $500K
– Cardiovascular Surgeon
161
Six functional specialty groups:
1) Internal medicine
2) Medical
3) Obstetrics/Gynecology
4) Surgery
5) Hospital based radiology, anesthesiology, pathology
6) Psychiatry
162
Specialty Maldistribution
Imbalance between primary and specialty care
• From 1979 to 1999, the number of primary
care physicians increased by only 18%,
while the number of specialists increased
118%
• In the US, approximately 40.8% of the
physicians are generalists and
approximately 59.2% are specialists
• 25-50% in other countries are specialists
163
Geographic
| Distribution of Physicians
```
• Rural areas and inner-city locations
continue to experience physician
shortages.
• Rural areas with no nearby cities still have
fewer than 100 physicians per 100,000
civilians.
• Nonmetro places with less than 2,500
inhabitants have experienced no
improvement in physician availability in 60
years.
```
164
What is a HPSA?
Health Professional Shortage Areas =
shortages of primary medical care, dental
or mental health providers and may be
geographic (a county or service area),
demographic (low income population) or
institutional (comprehensive health center,
federally qualified health center or other
public facility).
165
Efforts to Improve
| Unequal Distribution of Physicians
• Federal efforts to improve the distribution
of physicians include loan forgiveness and
extensive support for the development of
family practice training programs.
• At the state level, there have been efforts
to improve physician distribution through
the authority of Offices of Rural Health.
166
What is the largest group of licensed
health care professionals in the United
States (majority are women; 5% men)
RNs
167
The “ADPIE” Nursing Process
```
Assesment
Diagnose
Plan
Implement
Evaluate
```
168
Nursing Training – multiple
| pathways to becoming a RN
```
• LPNs (LVNs) – licensed practical or
vocational nurses (supervised by RN)
• Associate Degree (AA)
• Diploma
• Bachelor’s Degree (BSN)
• Master’s Degree (MSN)
• Doctoral Degree (Ph.D.)
```
169
Nursing Stats
```
• 2.6 million nurses in 2009 in the US
• Average salary $66,530/yr
• Clinics, home health & LT care facilities
project needing more nurses given
demographics & demand
```
170
Factors Contributing
| to the Nursing Shortage
* Decline in nursing school enrollments
* Aging of the RN workforce
* Nurses not employed in nursing
* Decline in relative earnings
* Emergence of alternative job opportunities
171
Physicians’ Assistants (PAs) Overview
```
• Qualified by academic and practical
training to provide patient services under
supervision of a licensed physician.
• May diagnose, manage, and treat
common illnesses, provide preventive
services, and respond to emergency
situations.
• May prescribe certain classes of
medications.
```
172
Advanced Practice Nurses (APN) Overview
```
• Advanced training beyond basic RN
nursing education
• Basic licensure
• Graduate degree in nursing
• Experience in a specialized area
• Professional certification from a national
certifying body
• An APN license, if required
```
173
Types of APNs
```
• Certified Registered Nurse Anesthetists
(CRNAs)
• Certified Nurse Midwives (CNMs)
• Clinical nurse specialists (CNSs)
• Nurse practitioners (NPs) – most
autonomous, usually also have masters
```
174
Seven Core APN Competencies
```
• Direct clinical practice
• Expert guidance and coaching of patients,
families, and other care providers
• Consultation
• Research skills
• Clinical and professional leadership
• Collaboration
• Ethical decision-making skills
```
175
What are some issues with PA and NP use?
* Legal restrictions concerning practice
* Reimbursement policies
* Relationships with physicians
176
Stats on Dentists
```
• Majority of dentists are in general practice
in solo or small group private practice
– Few (growing #) in other settings
• 14% of all dentists are specialists.
Most common specialists:
- 33% of specialists are Orthodontists
- 25% of specialists are Oral surgeons
```
177
Types of Dental personnel
• Major role:
– Diagnose and treat dental problems related to
teeth, gums and mouth
• Dental hygienists
– Do preventative dental care (Clean, educate)
– Must be licensed
• Dental Assistants
– Help in the preparation, exam and treating of
patients
– Do not need licensure
178
Pharmacist Stats
```
• In the 1980s and 1990s, Pharmacists
expanded their role to include drug
production education and to act as experts
on the effects of specific drugs, drug
interactions, and generic drug
substitutions.
• PharmD – extra clinical training
• In the early 21st century
– Role was further expanded to include
selecting, monitoring, and evaluating
appropriate drug regimens
– Providing information to patients and health care professionals
– Preventing medication errors
– Greater role with Medicare Part D
```
179
What do Public Health Professionals do?
```
• Administration of health agencies
• Planning and evaluating prevention,
screening, and health education programs
• Surveillance and control of environmental
hazards and pollutants
• Incidence and prevalence of disease in
populations
```
180
What do Health Services Administrators do?
• Top, middle, entry level administrators
• Top level admin. provides leadership,
strategic direction, and works closely with
org. governing boards
• Responsible for org. long-term success
• Responsible for operational, clinical, and
financial outcomes of entire org.
181
Health Service Administrator Challenges
```
– financing and payment structures
– work with decreasing levels of reimbursement
– pressure of uncompensated care
– high quality
– community health service
– demands by both public and private payers
– new policy developments
– changing competitive environment
– maintaining integrity
```
182
5 themes of collaborative
| leadership
* systems thinking
* vision-based leadership
* collateral leadership
* power sharing
* process-based leadership
183
Major HC Workforce Policy &
| Planning Issues
• Are there enough providers? (#, supply,
now and in future)
• Do we have the right kinds of providers?
(most cost-effective combo; NP or RN?)
• Are they doing the right type of work?
(services most needed? General/specialist?
Primary vs. LT care?)
• Are they practicing in the right places?
(distribution & location; urban/rural)
• Is their demographic composition
appropriate? (Women, men, minorities?)
• Do they work together appropriately?
(Multi-disciplinary teams)
184
ACA & health workforce (book?)
```
• PH & CLINICAL TRAINING: More funds
for loan repayment, mid-career training
grants, Preventive Med & PH Training, PH
fellowships, new PH track; expand NHSC,
diversity in primary care fields, primary
care extension
• INFRASTRUCTURE: epi/lab capacity
grants, community workforce, school
based health ctr, MCH prgms
• Research/analysis
```
185
Size of U.S Health Care
| Industry
```
• In 2008, Americans spent about
$2.3 trillion on health care. [1]
• Health care amounted to $7,681 per capita
in 2008.
• Health care comprised 17.6% of GDP in
2009.
```
186
Complexity of HC financing
A primary characteristic of health care
delivery in the U.S.
```
–many payers
–many private plans
–many government programs
–many payment methods
Over the years, costs have shifted from
the private to the public sector
```
187
In 2009, what % of the nations health dollar went to public health activities?
3%
188
Types of Insurance Cost Sharing
– Co-payment
– co-insurance
– Stop-loss provision
189
Types of Private Insurance
```
• Group insurance
– Tax advantages when it is obtained through the employer
• Self-insurance (through employer)
– Spurred by public policy
• Individual private insurance
– Cost based on individual’s health
• Managed care plans
```
190
Characteristics of an insurable event
1. Unpredictable for the individual but predictable
on average for a group
2. Precisely definable
3. Unplanned, undesired, and uncontrollable by
the insured
4. Loss is large enough to warrant insurance
5. Independent event; not likely to affect large
numbers of insured simultaneously
6. Size of average loss is sufficiently small to
make premium affordable
191
Adverse Selection
• Unhealthy people over-select a particular plan
– Occurs when a particular insurance policy
experiences a higher number of claims due to
sickness than would be probable on a random basis.
– Information asymmetry
192
Human nature & moral hazard
To the extent that the event insured against can
be controlled, there exists a temptation to use
insurance.
193
RAND HIE
• RAND HIE = Health insurance experiment.
• Classic prospective study with families
randomized to different cost-sharing levels
• How much care will people use if it’s free?
194
RAND HIE Findings
• modest cost sharing reduces use of services
with negligible effects on health for the average
person
• BUT negative impact on the poorest and sickest
– lower income groups had lower cost-sharing
as well, and decreased use was harmful
195
Underwriting is
– evaluation, selection (or rejection),
classification, and rating of risk
– Different risk assessment methods to
determine premiums
196
Experience rating
based on a group’s own medical claims
experience. Under this method, premiums
differ from group to group because differ-
ent groups have different risks.
197
Community rating
```
spreads
the risk among members of a larger com-
munity and establishes premiums based
on the utilization experience of the whole
community.
```
198
indemnity plan
provides re-
imbursement to the insured, without regard
to the expenses actually incurred
199
service plan
pro-
vides specified services to the insured. The
plan pays the hospital or physician directly,
except for the deductible and copayments
for which the insured is responsible.
200
ACA 2010
On March 23 2010, Congress passed and President Obama signed comprehensive health reform legislation, the Patient Protection & Affordable Care
Act (often abbreviated ACA 2010)
Reform builds on the current system with changes phased in over several years
Major goal to reduce # uninsured
201
Current % uninsured
16%
202
Projected % uninsured
6%
203
Number of people that Medicare covers
44 million
204
Medicare is under which title?
Title XVIII
205
Medicare Provides a variety of hospital, physician,and other medical services for the
following individuals:
– Persons 65 and over.
– Disabled individuals who are entitled to local
Security benefits.
– End-stage renal disease (ESRD) victims.
206
Who is eligible for Medicare
• Linked to Social Security
• You or spouse must have worked and paid
into the system for 40 units (~10 years)
• It’s not compulsory insurance, and about
1% elderly do not have any insurance
207
Medicare Part A
```
Hospital Insurance (HI)
1. 90 days of inpatient care in a “benefit
period”
2. Lifetime reserve of 60 days inpatient care
(once the 90 are exhausted)
3. 100 days post-hospitalization care in
skilled nursing facility (SNF)
4. Home health agency visits.
5. Three pints of blood, as part of an
inpatient stay.
```
208
Part A Financing
```
• Funded largely through Trust Fund
– 2.9% payroll tax on current workers;
1.45% from worker, 1.45% from employer
• Some Medicare beneficiary cost-sharing is
required: deductible, coinsurances
• No premium for most beneficiaries
```
209
Medicare Part B
```
SMI
Supplementary Medical Insurance
• Physicians
• Physician-ordered supplies and services
• Outpatient hospital services
• Rural health clinic visits
• Home health visits
• Preventive services
• Hospice benefits
```
210
Medicare Changes 1984-96
```
• Big financial changes in payments for
physician services and to hospitals
– restructured financial incentives
• Resource-Based Relative Value Scale
(RBRVS)
• Hospital payment changed from costbased
reimbursement to PPS using ~500
Diagnosis Related Groups (DRGs)
```
211
Significance of 1994 election on Medicare
• Government role in Medicare challenged –
new battle to change from defined benefit
to defined contribution
• Challenge entitlement ideology
• Is medical care a public good or should it
be treated like a market commodity?
• Major partisan split between President
Clinton and new Republican majorities in
Congress
212
Part B Financing
• Mostly from general tax revenues
• Cost-sharing: deductible, monthly
premium
– Premiums cover only ¼ expenditures by law
– If on Medicaid, most programs cover these
premiums
213
Part B Premium Changes
• Prior to 2007, Medicare Part B premium equal to
about 25% of the Part B program's average per
beneficiary costs (rest financed through general
revenues).
• The 2003 Medicare Modernization Act (MMA)
altered this formula by linking premium amounts
to income (this change got little attention; focus
of MMA introduction of Part D drug benefit)
– wealthier seniors now pay higher premiums
– As of 2009, means-test premiums are fully phased-in
54
214
Not covered by part B (SMI)
* Dental care
* Routine eye exams and eyeglasses
* Hearing exams and hearing aids
* Long-term care services (custodial care)
215
Medicare Part C
• Medicare Advantage Plans
– Previously known as “Medicare+Choice” until MMA of 2003
• Private HMOs, PPOs, and other plans that
offer comprehensive services to Medicare
recipients.
• Currently, 25% of all Medicare
beneficiaries are enrolled in MA plans
• Medicare pays more for those enrolled in
MA plans than traditional Medicare –
increasing program costs
216
Drug Coverage Trends in the 90s
```
• Beneficiaries with drug coverage
increased 64.6%-76% from 1993-8
• Growth mostly in Medicare HMO
enrollment, also greatest increases in outof-
pocket spending
• Fewer +Choice HMO plans offering drug
coverage, rising drug costs
• Limited coverage under Medigap
```
217
Medicare Part D
• Federal program to subsidize the costs of
prescription drugs for beneficiaries
• Voluntary drug benefit (except for dual eligibles)
• Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 (MMA)
– went into effect on January 1, 2006
• Medicare replaces Medicaid as primary source
of drug coverage for low-income and disabled
dual-eligibles (about 15% on Medicare)
• Financed mostly by general revenue; some state
payments, beneficiary premiums
218
2 types of private Rx plans
• Stand-alone prescription drug plan (PDP)
– Supplement FFS Medicare
– Most states offer at least 50 different PDPs
• Medicare Advantage prescription drug
plans (MA-PD)
– HMOs, PPOs
– Most states offer many MA-PDs
219
Standard Medicare Prescription Drug Benefit, 2010
Initial coverage limit: $2,830 in total drug costs ($940 out-of-pocket)
Catastrophic coverage limit: $6,440 in total drug costs ($4,550 out-of-pocket)
Coverage Gap of $3610 (Donut Hole)
220
Part D Standard Benefit
• Defined in terms benefit structure and not
in terms of the drugs that must be covered
• Required to pay deductible
• Beneficiary then pays 25% of the cost of a
covered Part D drug up to an annually set
initial coverage limit.
• Then hit Coverage Gap (“Donut Hole”) and must pay 100%, full cost of medicine
• When total out of pocket expenses on
formulary drugs for the year (including the
deductible, initial coinsurance) reach the
next annually set amount, beneficiary
reaches catastrophic coverage and pays
5% coinsurance
221
Facts about standalone Prescription Drug Plans
```
• 12% PDPs offer the standard benefit
• 60% PDPs have no deductible
• 86% PDPs charge tiered copays for
covered drugs (instead of 25% coins.)
• Most PDPs have some coverage gap
• Very few (<2%) cover both brand name
and generic drugs in the gap
```
222
Medicare & Out-of-Pocket Costs
• Neither Part A nor Part B pays for all of a
covered person's medical costs
– Premiums, deductibles, co-pays (all paid outof-
pocket)
• In 2004, about 19% of payments for
beneficiaries coming out-of-pocket
223
Medigap
• Supplemental Medicare Insurance Policies
• Private insurance to help pay for costs
original Medicare does not cover (like
copays, coinsurance, deductibles)
• Most states offer standardized plans
Not available with Part C plans.
224
Medigap doesn't cover...
* Long-term care such as nursing homes
* Vision Care and Eyeglasses
* Dental care
* Hearing aids
* Private-duty nursing
225
RBRVS
```
Resource-Based Relative
Value Scales (RBRVS)
• Initiated by Medicare on January 1, 1992
for reimbursing physicians
• Geographic variations
• Divides resources needed to produce
physician services based on 3
components (pymt based on effort)
– Physician work (~52% in 2005, per GAO)
– practice expenses (44%)
– malpractice insurance costs (4%)
```
226
Prospective Payment System
| PPS
• October 1, 1983.
• Pays a standardized amount for each
Diagnosis Related Group (DRG).
• Payment bears no direct relationship to
length of stay (LOS), services rendered, or
costs of care.
• Decreased Medicare hospital admissions.
• Decreased average LOS.
227
RUG
```
Resource Utilization Groups
• BBA 1997
• Medicare pays for Part A skilled nursing
facility (SNFs) stays based on a
prospective payment system that
categorizes each resident into 1 of 44
payment groups (a RUG) depending upon
his or her care and resource needs.
```
228
Balanced Budget Act (BBA) 1997 & more PPS
• Ambulatory Payment Classifications (APCs) =
PPS of paying for facility outpatient services
under Medicare.
– implemented on August 1, 2000
• CMS created a new Medicare "Outpatient
Prospective Payment System" (OPPS) for
hospital outpatient services -analogous to DRGs
for Part A paying for hospital inpatient care.
• This OPPS, was implemented on August 1,
2000. APCs are an outpatient prospective
payment system applicable only to hospitals.
229
HHRG
Home Health Resource Group
• CMS adopted a PPS that pays home health agencies (HHA) a predetermined rate for each 60-day episode of home health care.
– payment rates based on patients’ conditions and service use
– adjusted to reflect the level of market input prices in the geographical area where services are delivered.
– If < 5 visits delivered during a 60-day episode, the HHA is paid per visit by visit type, rather than by the episode payment method. Adjustments for several other special circumstances, such as high-cost outliers, can also modify the payment.
230
Health reform & Medicare
• BENEFIT IMPROVEMENTS
– Part D donut hole/coverage gap will be phased out by 2020, discounts in meantime.
– Coverage of prevention services
• New annual Wellness Exam for all Part B with no deductible or copay (Jan2011)
• Less cost-sharing for select preventive services
• More for primary care
231
Health Reform & Part D
```
• 2010: $250 rebates for anyone that hit
coverage gap
• Effective 2011, all Part D drugs must be
covered under a manufacturer discount
agreement with CMS. While in the gap,
50% brand name & 7% generic drug
discounts. Close gap by 2020.
```
232
Health reform & Medicare
```
PROVISIONS TO REDUCE SPENDINGZ
• Freezes maximum payments Medicare will
pay to MA plans in 2011
• Phased in reductions in payments starting
in 2010, but will also introduce bonus
payments based on quality ratings
• Not clear how these payment changes
may affect beneficiaries
```
233
Exploring new ways to save $
```
• New Independent Payment Advisory
Board – aim to contain growth Medicare
spending
• $10 billion to establish new Center for
Medicare & Medicaid Innovation to test
new payment & service delivery models
```
234
New Medicare-related revenue
| sources in the health reform law
• Medicare savings attained through increases in premiums paid by higher income Medicare beneficiaries under Parts B and D.
• Freezes income threshold for Part B premium at $85,000/individuals and $170,000/couples; income thresholds will
no longer be indexed for inflation (2011)
• Establishes new income-related Part D premium, with same, fixed income thresholds as Part B (2011)
• Increases the Medicare Part A tax from 1.45% to 2.35% on earnings over $200,000/individuals and 250,000/couples (2013)
235
TANF
Temp Assist to Needy Familes
236
SSI
Supplemental Security Income
237
Who finances Medicaid?
• Medicaid is an “in-kind” transfer payment to
welfare recipients who are eligible to receive
cash under TANF or SSI.
– TANF = Temp Asst to Needy Families
– SSI = Supplemental Security Income
• It is financed by an average federal contribution
from the general treasury of 59% and from state
treasuries at an average contribution of 41%.
238
Historical Origin of Medicaid
```
• Legislative afterthought to Medicare
• Medicaid was a creature of Congress –
product of the House Ways & Means
Committee and its powerful chairman Rep
Wilbur Mills (D-Ark)
• AMA and conservatives wanted Medicare
to be a joint federal-state program, but
Mills used this model for Medicaid instead
```
239
Medicaid Origins Cont'd
• Enacted in 1965 as companion legislation to Medicare
Parts A and B (Title XIX)
• Entitles eligible individuals to defined set of benefits
• Guarantees participating states federal matching funds
on open-ended basis
• Means-tested, with focus on welfare population:
-- Children, Single parents with dependent children
-- Aged, Blind, and Disabled
• Jointly financed by federal and state government
• Mandatory services and populations for participating
states
• States have some flexibility to set eligibility, benefits,
and establish payment design and care delivery
240
Median Medicaid/CHIP Eligibility
| Thresholds, January 2011
• The ACA establishes a national eligibility standard for
Medicaid at 133% FPL beginning in 2014
• This will increase coverage for many parents and adults
without dependent children
• ACA requires states to streamline and simplify the Medicaid
enrollment process and coordinate eligibility
241
Medicaid Summary and Outlook
• Critical lifeline to care for 60 million low-income and high-needs
Americans
• Foundation for new coverage for low-income individuals under
health reform
• Challenges
– States still struggling from the effects of the Great Recession, so pressure
to control Medicaid spending persists
– Federal deficit reduction efforts could have implications for Medicaid and
states
– States face tight timelines and have limited staff to prepare for the
implementation of health reform
• Opportunities
– States implementing new payment and delivery system reforms
(particularly for dual eligibles) designed to better serve beneficiaries and
reduce costs
– Health reform presents opportunities to significantly
242
Medi-Cal Payments, 2001
On average are 60% of Medicare.
| Some essential services are 43% of Medicare.
243
SCHIP
State Children’s Health Insurance Program
244
SCHIP Overview
• State Children’s Health Insurance
Programs (SCHIP) – states get block grant
• Created in 1997 BBA as SSA Title XXI
• Improve access to care for targeted low
income children not eligible for Medicaid
– Usually up to 200% FPL
• Funded $40 billion over 10 years (sunset)
– Enhanced federal matching funds
245
SCHIP extension
```
• After two presidential vetoes of legislation
aimed at reauthorizing SCHIP for five
years, the president and Congress
ultimately agreed to an 18-month
extension (until March 31, 2009) of the
program in December 2007 (S.2499)
```
246
CHIPRA
• On February 4, 2009, President Obama signed
the Children's Health Insurance Program
Reauthorization Act of 2009 (CHIPRA),
expanding the healthcare program to an
additional 4 million children and pregnant
women, including for the first time legal
immigrants without a waiting period.
• Hoped it would jumpstart health reform
• Expansion funded by increased tobacco taxes
– $0.62/pack & more taxes on other products
247
SCHIP - Financing
• Federal-state matching
– “Enhanced” match - SCHIP match will always be
higher than the state’s Medicaid match
– usually between 65-85%
• States receive payments in 3-year allotments
– If run out of money, states will not receive more from
the federal government absent special circumstances
– Unused allotments revert to the federal Treasury
• Beneficiary cost-sharing requirements are
allowed
248
SCHIP - Eligibility
```
• States may cover children up to 200%
Federal Poverty Level (FPL)
– Children who are eligible for Medicaid must
be enrolled in Medicaid, not SCHIP
– States with generous Medicaid programs may
be allowed to exceed 200% FPL limit
• States may impose waiting periods,
enrollment caps, and other measures to
limit expenses
```
249
Major Objectives of Financial
| Management
```
Generate a reasonable net income.
• Set prices for services.
• Facilitate relationships and manage
contracts with third party payers.
• Record and analyze cost information.
• Prepare, audit, and disseminate the
organization’s financial reports.
• Invest in long-term capital assets.
• Ensure that payroll is covered and that
suppliers are paid.
• Protect the organization’s tax status.
• Respond to government regulators,
external auditors, accrediting agencies,
and quality consultants.
• Control financial risk to the organization.
```
250
What are Fraud and Abuse
• Fraud is an intentional act of deception
• Abuse consists of improper acts that are
unintentional but inconsistent with standard
practices.
251
False Claims Act
• The False Claims Act (FCA) was enacted in
1863 as the primary civil remedy by the federal
government for fraudulent or improper
healthcare claims.
The US Supreme Court ruled in 2000, that government-owned healthcare providers
were exempt from damage under the FCA. This acts as a shield for them.
• In 1986, the first major amendments were
added to the FCA.
• Removed the requirement that there be
specific intent to defraud the federal
government.
• Government need only show that the claim
submitted is false and submitted knowingly.
252
Operation Restore Trust
• In 1995, Operation Restore Trust (ORT) gave
investigative and enforcement authority
necessary to address healthcare fraud and abuse.
– OIG = Office of Inspector General in DHHS
• ORT now includes all 50 states and is a proven
success; billions of dollars have been restored to
the program as a result of civil settlements, fines
or judgments related to health care fraud.
• ORT has been supplemented with:
– RACs (2006)
– HEAT (2009)
– Healthcare reform (2010) funding
253
The Emergency Medical Treatment
| and Active Labor Act (EMTALA)
• 1986 - “Anti-Dumping Act”.
• Mandates a Medical Screening Exam (MSE) be
given to any patient who presents to a provider
of emergent or urgent care.
• The patient must be treated and discharged or
admitted as an inpatient and stabilized then
transferred from the ER.
254
Antitrust law
• Implemented to protect from the negative effects
of monopolies.
• Three Acts form the basis of the Antitrust law:
– Sherman Act- Section 1 prohibits all conspiracies
or agreements that restrain trade.
– Clayton Act- Section 7 prohibits mergers and
acquisitions that may substantially lessen
competition “in any line of commerce…in any
section of the country.” This was enacted in 1914.
– The Federal Trade Commission (FTC) Act-
Section 5 prohibits unfair methods of
competition.
255
Antitrust Issues
• The Department of Justice (DOJ) and Federal
Trade Commission (FTC) revised the Statements
of Antitrust Enforcement Policy in Health Care
in 1996.
• DOJ – Division of Antitrust
• FTC – Bureau of Competition
• Intended to ensure that policies did not interfere
with activities that reduce healthcare costs.
256
FTC Mission/Vision
Our Mission
• To prevent business practices that are anticompetitive or
deceptive or unfair to consumers; to enhance informed
consumer choice and public understanding of the
competitive process; and to accomplish this without
unduly burdening legitimate business activity.
Our Vision
• A U.S. economy characterized by vigorous competition
among producers and consumer access to accurate
information, yielding high-quality products at low prices
and encouraging efficiency, innovation, and consumer
choice.
257
Bureau of Competition
• FTC's antitrust arm
• prevents anticompetitive mergers and other
anticompetitive business practices in the marketplace.
• promotes consumers' freedom to choose goods and
services in an open marketplace at a price and quality
that fit their needs - and fosters opportunity for
businesses by ensuring a level playing field among
competitors.
– Premerger Notification
– Enforcement
– Guidance
– Advocacy Filings
258
OIG
```
• Office of Inspector General under DHHS
(www.oig.hhs.gov)
- Cooperation with Department of Justice
- Offers fraud alerts, bulletins, compliance
program guidance, ways to report
```
259
Stark I & II --
| Physician Self Referral Laws
• Laws developed to prohibit physicians from
referring their patients to providers in which
they have a financial interest.
• Stark I was created for laboratory services.
• Stark II - expand
– If a physician discovers after the fact that he has
violated Stark laws and is subject to potential
criminal liability if the error is not disclosed.
Amounts billed must be refunded ($15,000 civil fine
per item)
260
Anti-Kickback Statute
• Imposes criminal liability
• knowing and willful payment, solicitation, or
receipt of remuneration*
• in return for referring, purchasing, leasing, ordering,
arranging or recommending the purchase, lease, or
order of items or services reimbursable by the
federal health care program.
• BBA 1997 imposes civil monetary penalties:
$50,000 for each Act violation
and damages of up to 3x total
* any kickback, bribe, or rebate, direct or
indirect, overt or covert, in cash or in kind, and
any ownership interest or compensation
interest
261
8 Essential elements of a corporate compliance plan
```
P&Ps
Designation of a Compliance Officer
Training and Education
Effective Lines of Communication
Enforcement Procedures
Procedures for Internal Monitoring/Auditing
Procedures for Corrective Action
Fraud and Abuse Plan in place
```
