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Readings 1 & 2 Week 10 Notes

by: rkl130030

Readings 1 & 2 Week 10 Notes HLTH 3305

GPA 3.0

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About this Document

These are the materials that your professor requires you to understand for the first two journal readings you will do in the semester.
US Healthcare Systems
Kathleen Byrnes
Class Notes
Healthcare, Reading, us
25 ?




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This 5 page Class Notes was uploaded by rkl130030 on Sunday April 10, 2016. The Class Notes belongs to HLTH 3305 at University of Texas at Dallas taught by Kathleen Byrnes in Spring 2016. Since its upload, it has received 16 views. For similar materials see US Healthcare Systems in Nursing and Health Sciences at University of Texas at Dallas.

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Date Created: 04/10/16
Ruth Lichtenberg HLTH 3305.002 01/25/2016 Readings 1 - 2 Q&A's Reading 1: 1) Two conflicting goals of the American healthcare system are providing health care to the sick and generating income for the persons and organizations that assume the financial risk. 2) The magnitude of public expenditure is important because it reveals the amount of attention that's being paid to the system from the government and public alike. This in turn displays the influence that government has over the details and inner workings of the health care system. 3) A market-based system is a collection of decision-making units called households and businesses along with other large organizations. 4) Three basic sources for funding are employers, governments, and individuals. 5) Private employers and employees are the most important purchasers of health care. 6) Premium- amount paid periodically to the insurer by the insured for covering his risk. 7) Employees are responsible for part of the permiums (around 20%) through weekly or monthly deductions of regular amounts from their gross-wage paychecks. Employers are responsible for the remaining 80% not deducted from the employee's checks. 8) Most employers believe that their premium portion responsibilities are deducted from their overall profits when, in fact, it's actually shifted back on to the employees in the form of lower take-home pay. 9) The cost of health care is higher in the U.S. due to three main reasons; physicians are paid more than those in other countries for their services, one day in the hospital is more expensive than other countries, medical technology is used more frequently and rapidly in the U.S. than in other countries. 10) Some sources of income for federal and state governments for medical care expenditures are the taxes collected in different areas that are then redistributed to providers and suppliers as income, who then bill patients for services rendered and goods delivered. 11) A block grant is a grant from the federal government that has very few strings attached to it. Basically, it's money that cannot be limited in its use. 12) A categorical grant is a federal grant that specifies how the money should be spent and by when and who. 13) Medicaid is the largest programinvolving inter-governmental transfer of funds. 14) Federal government funds for health care services are appropriated annually. 15) The amounts for the federal government funds for health care services are determined by a formula based on each state's per capita income. 16) The Personal Responsibility Act of 1996 is a piece of welfare reform legislation that requires work in exchange for time limited assistance. It led to a decline in welfare caseloads and unemployment rates. 17) Medicare is the largest federal health program. 18) Medicare is funded from mandatory contributions from employers and employees, general tax revenues, beneficiaries' premiums, and deductibles and copayments covered by patients. 19) Out of pocket spending- expenditures for coinsurances and deductibles required by insurers, and payments direct payments for services not covered by a third party. 20) Direct consumer spending has declined due to the growth of health maintenance organizations (HMOs) which tend to offer broader benefits and lower out-of-pocket payments. 21) Hospitals have shifted away from in-patient stays towards out-patient services due to the increased profit margins associated with out-patient services. 22) Hospitals increase their profit margins through reducing their expenses, expanding their capacity to provide out-patient services, and diversifying into post-discharge care. 23) Expenditures for physician services are the sources of the largest portion of health care spending. 24) Congress supports medical research because overall it is less expensive than providing health care coverage for the uninsured. 25) Prescription drugs are the fastest growing component of personal health care expenditures. 26) Spinal surgeons might oppose research activities of the Agency for Health Care Policy because the studies would potentially diminish the value and need for spinal surgeons based on findings that attempt to show that their work is potentially unnecessary and could cause further complications. Reading 2: 1) The practice of price discrimination in the hospital industry is defined as the practice of charging different payers different prices for identical health care goods and services. 2) 36% of a hospitals' total gross patient revenue comes from billed out-patient services. 3) Out Patient Services- medical procedures or tests that can be done in a medical center without overnight stay. 4) Hospital Charge Master- a list of the hospital's prices for every procedure performed in the hospital and for every supply item used during the procedures. 5) (HIPAA) the Health Insurance Portability and Accountability Act of 1996 is a piece of U.S. legislature that provides data privacy and security provisions for safeguarding medical information. 6) An advantage of HIPAA's impact on the disclosure of bills/charges is that theoretically patients can review their bill and make sure that everything they're being charged for was actually used and/or provided. A disadvantage is that the bills tend to be pretty lengthy and produce totals that don't actually have anything to do with how much the third party will actually pay. 7) There is no common practice used by hospitals to update their chargemasters. Some raise the prices of every product by the same percentage every year. Others update prices for specific items/procedures with different percentages at different times during the year. 8) Hospitals receive around 31% of their net revenues from Medicare; 88% goes towards in patient care, the remainder is allotted to out patient care. 9) Medicare calculates in-patient reimbursment through flat fees based on a schedule of around 600 distinct diagnosis-related groups (DRGs.) 10) Medicare comes up with the actual payment for in-patient services by multiplying the DRG's relative payment weight by that year's monetary conversion factor. Payment can then be further adjusted for regional variations in cost of labor and other hospital inputs. 11) Outliers- complex cases who's use of resources greatly exceeds that set in the closest DRG. 12) Congress is responsible for setting the annual monetary conversion factor. This factor generally reflects changes in technology, practice patterns, and economy-wide market conditions. 13) The Balance Budget Act of 1997 mandated Medicare to switch to a prospective fee schedule that, in turn, keeps hospital reimbursement rates low as well as patient copays. 14) A service or a particular procedure are the basic payment units for out-patient services. 15) Bundling of Services- the grouping of entire sets of supplies and services associated with each major procedure into one lump-sum fee for that procedure. 16) Medicaid payment methods vary from state to state because each state government is allowed to set their own DRG payments as a percentage of Medicare DRGs. 17) Flat fees per DRG and flat per diem payments are two primary methods adopted by Medicaid to reimburse hospitals for in-patient services. 18) Cost Reimbursement- fee schedules set by the state government. 19) Private insurers cover the unpaid portion of the bills that Medicaid does not cover. 20) Case-based payments are the individual insurers interpretations of the Medicare DRGs. 21) Common characteristics of price discrimination are: high annual fixed costs relative to the incremental costs of producing additional services, their markets are separated into distinct classes of customers with varying degrees of price sensitivity, and customers can't resell products among themselves because it's either impossible or illegal. 22) Incremental Cost- the encompassing change that a hospital experiences within its balance sheet due to one additional unit of measure of effect. 23) Monopsony- when an employer has market power in the labor market (employer equivalent of a monopoly.) 24) The central idea of consumer directed care is to force patients to take a more active interest in their health care information when faced with high degrees of cost sharing. 25) Consumer empowerment relies on the idea that patients have easy access to reliable information comprised of prices charged by competing providers, costliness of practice styles of different providers, and quality of provider services.


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