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Chapter 1
Health Care Systems and Reimbursement
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Overview
• Health Care Facilities in the U.S.Preventive & Primary Health Care ServicesSecondary & Tertiary CareRestorative CareLong-Term Care
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Overview continued
• Financing the Health Care IndustryPrivate Insurance• Traditional Fee-for-Service Plans• Group Contract Insurance
Public Insurance• The Medicare Program
– Medicare Part A– Medicare Part B– Coverage Gaps
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Overview continued
The UninsuredDemographic Trends in Health CareThe Need for Health Care Reform• The High Cost of Health Care• Efforts at Cost Containment• Equity & Access as Issues in Health Care• Racial & Ethnic Disparities in Health
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Overview continued
Health Care Reform in the United States• Nutrition as a Component of Health Care
Reform• The Cost-Effectiveness of Nutrition
Services
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Preventive & Primary Health Care Services
• Prevention of illness & chronic disease
• Nutrition• Facilities
Health departmentsClinics & physician’s officesSchoolsProfessional, nonprofit & volunteer organizations
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Secondary & Tertiary Care
• Diagnosis & treatment of illness
• Acute care• Tertiary care
ExpertTechnicalHighly specialized
• FacilitiesTraditionally hospitalsPhysicians’ officesOutpatient facilitiesUrgent careSurgical unitsEmergency rooms
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Hospital Classifications
• See Box 1-2• Public not-for-profit• Private not-for-profit• Private profit• Veterans’ and military
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Nutrition in Secondary & Tertiary Care
• Examples:Celiac diseaseHypertensionArtherosclerosisMyocardial infarctionCongestive heart failure
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Restorative Care
• Care for recovery from acute or chronic illness
• Nutrition• Facilities
Long-term careRehabilitation facilitiesOutpatient clinicsHome health services
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Long-Term Care
• Maintenance, custodial & health services for the chronically ill or disabled
• Nutrition
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Health Insurance
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Private Insurance
• Traditional fee-for-serviceFee per service rendered10% of insurance coverage today
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Private Insurance continued
• Group contract insuranceManaged care system• Health maintenance organizations
(HMOs)– Capitation– General HMO models
» Staff model» Group model» Network model» Independent practice association
• Preferred provide organizations (PPOs)
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Public Insurance
• Medicare• Medicaid• SCHIP• HIPAA• Workers’ compensation
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Providers of Public Insurance
• Centers of Medicare & Medicaid Services• Department of Veterans Affairs• Public Health Services
Indian Health Service• Department of Defense
Civilian Health & Medical Program of the Uniformed ServicesCHAMPUS
• Public hospitals & community health centers• State & local public health programs
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Medicare
• 1965 Title XVIII of Social Security Act
• Administered by CMS of Department of Health & Human Services
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Eligibility
• 65 years of age or older• Any age with end-stage renal disease• Eligible for Social Security or Railroad
Retirement Board disability benefits up to 24 months
• Medicare-covered government employment prior to retirement
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Medicare Part A
• Hospital InsuranceInpatient hospital, skilled nursing facility, & some home healthDeductibles & coinsurance feesHospital inpatient charges reimbursed according to prospective payment system (PPS)• Diagnosis-related groups (DRGs)
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Medicare Part B
• Medical insurance• Optional program• Provides benefits for
Eligible physician servicesOutpatient hospital servicesCertain home health servicesDurable medical equipment
• NutritionMedical Nutrition TherapyCurrent procedural terminology (CMT)Enrolled Medicare MNT providers bill for
• Diabetes mellitus• Nondialysis kidney
disease• Post-kidney
transplant
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Medicare savings after 3 years of reimbursement of nutrition services
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Coverage Gaps
• Prescription drug coverage• Skilled nursing & long-term institutional
care > 100 days• Medicare Modernization Act of 2003
Optional coverageDrug discount cards/prescription drug plansAdditional preventive benefits
• Medigap PolicySupplemental policy from private insurance companies
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Medicaid
• Entitlement program• Joint state & federal program• 1965 Title XIX of the Social Security
Act
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Eligibility
• Low incomes• Certain pregnant women & children
with low incomes• Older adults, the blind & people with
disabilities• Members of families with dependent
children in which one parent is absent, incapacitated or unemployed
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Eligibility continued
• Determined by states• Three criteria
Income• Below federal poverty guidelines
Categorical• Member of family with dependent children• Older adult• Blind• Disability
Resource
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Coverage
• Inpatient & outpatient hospital services• Physician, pediatric/family nurse practitioner• Nurse-midwife services• Selected health center & rural health clinic services• Prenatal care & family planning• Child vaccination & services for those under 21 years
of age• Laboratory & X-ray services• Skilled nursing home & home health services
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• State Children’s Health Insurance Program
• Title XXI in the Balanced Budget Act of 1997
• Children of working families with incomes too high to qualify for Medicaid but too low to afford private health insurance
SCHIP
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SCHIP Enrollment
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Coverage
• Inpatient & outpatient hospital services
• Physicians’ surgical & medical services
• Laboratory • X-ray services• Well baby/child care services
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The Uninsured
• Employed uninsured• Nonworking uninsured• Emergency room• Resulting cost shift to the insured by
the increase in overall medical costs
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Percentage of Uninsured in U.S.
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Demographic trends in health care
• Aging population of baby boomersRequire care for greater number of yearsRise in amount of medical care required
• Increase in Hispanic population
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Elderly needing long-term care
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Health Care Reform
• Success of health care systemCostQualityAccess
• ChallengesAccessible to allContain costsProvide nursing home careEnsure that Medicare & Medicaid can serve eligible people
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High costs of health care
• Aging population• Increased demand• Medical advances• Administrative costs of insurance
process• Professional liability costs
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National health expenditures in billions of dollars, 1960-2002
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Cost Containment Efforts
• Slowing hospital construction• Modifying reimbursement • Reducing length of stays• Increasing co-payments &
deductibles• Challenging eligibility requirements
for Medicaid
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Cost Containment Efforts
• Requiring second opinions to reduce unnecessary surgery
• Restricting access to new technology• Encouraging alternative delivery
systems• Emphasizing prevention• Generic drugs
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Resulting Trends
• Movement away from traditional fee-for-service
• Companies choosing self-insured health plans to avoid cost shifting
• Payers setting reimbursement restrictions & limitations
Prospective payment system (PPS)• Diagnosis Related Groups (DRGs)• ICD-9-CM
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Racial & Ethnic Disparities in Health
• Healthy People Initiative
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Health Care Reform in the U.S.
• Health insurance reform• Physician malpractice reform• Incentives to induce businesses to
include health promotion initiatives in their insurance plans
• Preventive component vs. chronic disease as typical focus of allopathic medicine
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Nutrition in Health Care Reform
• Good health does not exist without proper nutrition.
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Cost Effectiveness of Nutrition Services
• Well documented• Develop guidelines or protocols that
specify appropriate care for conditions or diseases
• Measure outcomes• Documentation
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