Chapter 27 Why the US Medical System needs a Reform
- 1. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com. CHAPTER 27 Why the U.S. Medical System Needs Reform
- 2. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com U.S. Medical Costs Costs are rising more rapidly than general inflation. They are now about 16.9% of GDP. – The most expensive of all countries About 8.5% of population is uninsured. Rising costs lead to lack of insurance, which leads to worse health. U.S. is not getting its money’s worth.
- 3. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Why Do Costs Rise? Aging population New medical technology – Including prescription drugs Administrative costs Chronic diseases associated with obesity Malpractice fears and defensive medicine Financial incentives for medical providers – Fee-for-service Patients demanding the best, regardless of price
- 4. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Attempts to Control Costs Price controls were tried in the 1970s, limiting new facilities and technology with certificate-of-need requirement. In the 1980s, Medicare tried an incentive for providers: flat fees for treatment of diagnosis-related groups (DRGs). Managed care is a result of employer-based private insurance bargaining in the 1990s. Some approaches worked for a while, but none controlled costs for the longer term.
- 5. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Health Maintenance Organization (HMO) Acts as insurer and provider Agrees to provide all required care for a fixed payment Pays salaries to physicians and other providers Has incentives to: – Deny care – Limit access to specialists and technology – Provide preventive care and health promotion programs
- 6. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Preferred Provider Organization (PPO) Patients must seek care from participating providers. Participating providers agree to provide services at lower rates. Patients are not allowed to see a specialist without referral from a primary care physician. Allows patients to go to nonparticipating providers but requires them to pay a higher percentage of those costs out of their own pockets
- 7. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Managed Care Backlash Patients understood that the financial incentives encouraged denial of treatment. – Laws against “drive-through deliveries” and “drive-through mastectomies” – Outrage at gag rules – Consumers rights to sue HMOs for denial of care – Loss of ability to manage care in a cost-conscious way Prices again began to rise, and numbers of uninsured again rose. There is no evidence that patients are harmed by the cost-control measures overall.
- 8. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Consumer-Directed Health Plans Are popular among political conservatives Provide consumers with information on cost and quality and require them to pay more of the cost Tend to have high deductibles Are often combined with health savings accounts Are most likely to be used as a tax haven for healthy and wealthy individuals Motivate people to avoid or delay health care because of costs
- 9. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com The Affordable Care Act: Provisions Children can stay on a parent’s insurance plan until age 26. Many preventive services are free to insured patients. Medicare prescription drug coverage is more affordable. States can opt to receive federal funds for expansion of Medicaid programs to uninsured.
- 10. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com The Affordable Care Act: Regulations Individual mandate is that you must have health insurance or pay a fine. – Mandate was abolished in 2017 Large business must pay assessment if they do not insure employees. Insurance companies cannot: – Have lifetime limits on health coverage – Cancel policies of patients when medical costs rise – Spend too much on administrative costs or profits
- 11. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com The Affordable Care Act Insurance exchanges – Information for consumers to choose the best plans for their needs Center for Medicare and Medicaid Innovation – Research to improve quality of health care and reduce growing cost of health care
- 12. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Rationing Rationing makes people uncomfortable. Rationing by ability to pay is already taking place. Oregon experiment with Medicaid Other countries favor reduction in overall medical costs to rationing care to citizens. – Reduce administrative costs – Coordinate care – Promote preventive services
- 13. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Discussion Question 1 Can you think of examples from your experience, or that of your family or friends, that demonstrate an expensive use of the healthcare system? Do you think the expense was justified?
- 14. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Discussion Question 2 Are you covered by medical insurance? What kind of plan do you have? Who pays the premiums? Do you have a free choice of doctors?
- 15. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Discussion Question 3 What are five or more situations that have required you or members of your family or friends to seek medical care? Rank them in the order in which you think they should be covered under a rationing plan such as Oregon’s. Explain your decisions.
- 16. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Discussion Question 4 Visit the website of the U.S. Census, www.census.gov. Can you find out what proportion of the total population in your state lacks health insurance? What proportion of that population is under 18? You can find how your county compares with other counties in your state by using the mapping tool at www.census.gov/data-tools/demo/sahie/#/.
- 17. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Discussion Question 5 Visit the CMS website, www.cms.gov. The site gives data on U.S. trends in usage of medical services and their costs. Find recent trends in medical expenditures at www.cms.gov/Research- Statistics-Data-and-Systems/Statistics-Trends-and- Reports/NationalHealthExpendData/index.html. How does the nation spend its medical care dollar?
- 18. Copyright © 2021 by Jones & Bartlett Learning, LLC an Ascend Learning Company. www.jblearning.com Discussion Question 6 Visit the website of the Oregon Health Plan, www.oregonhealthcare.gov. See if you can find the prioritized list of health services. What services have the highest priority on the list?