health insurance. objectives for today explain the origins of insurance differentiate among types of...
TRANSCRIPT
Health Insurance
Objectives for today
Explain the origins of insurance
Differentiate among types of insurance
Explain reimbursement mechanisms
Explain service use incentives
Identify provider incentives
What is insurance?
A method of distributing risk
Traditional insurance for expensive potential losses car accidents, hospitalization
Today’ health insurance covers fairly non-risky events routine physician care
Origins of health insurance
European industries Germany’s sickness fund, 1840
United States Blue Cross: Baylor teachers in Dallas, 1929 American Medical Association opposed Blue Cross: expanded during depression Blue Shield: California Medical Society,
1939
Health insurance types
Voluntary Individuals, employers purchases
Social health insurance Government sponsored (e.g. Medicare in
the U.S.; health insurance in Canada)
Public welfare For low income persons (e.g. Medicaid)
Health insurance coverage in U.S.
41.7 million Americans (15.6 % of population) uninsured in 1996 (Carrasquillo et al. 1999; from Current Population Survey)
Texas has the higher proportion of uninsured of all of the states 4,680,000 Texans (24.3 %) uninsured a significant increase from 1989
Health insurance coverage in U.S.
187.9 million (70.4%) covered
by private insurance 31.9 million (11.8%) covered
by Medicaid 34.7 million (13.2%) covered
by Medicare (13.2%)
Health insurance coverage in U.S.by Age Category
14.8
22.7
14.4
1.1
0
5
10
15
20
25
<18 18-39 40-64 >64
% uninsured
Health insurance coverage in U.S.by Gender
17.1
14.2
0
2
4
6
8
10
12
14
16
18
Male Female
% uninsured
Health insurance coverage in U.S.by Race/Ethnicity
11.5
21.6
33.6
0
5
10
15
20
25
30
35
40
Non-HispanicWhites
Blacks Hispanics
% uninsured
Voluntary health insurance
Most people in U.S. covered by private insurance
Employer purchased
Self-employed
Medigap
Social health insurance programs in the U.S.
Worker’s compensation Medicare
Medicaid
Department of Defense
VA health system (not simply an insurance system, but a health system)
Source of expenditures
31%
4%
19%14%
13%
19% Private healthinsuranceOther private
Medicare
Medicaid
Other gov't.
Out of pocket
Where the $1 trillion is spentfrom Levit et al. (1996)
11%
36%
8%
20%
25% Other spending
Hospital care
Nursing home
Physician services
Other personalhealth care
Worker’s compensation
Covers employed persons
Pays cash replacement of a portion of wages
Pays for medical care resulting from work-related injury or sickness
Medicare
An entitlement program passed in 1965
The major social health insurance program in the U.S.
Covers individuals 65 and older Also covers disabled individuals and
those with end-stage renal disease
Medicare Part A
Compulsory
Covers hospital costs
Paid for by Social Health Insurance Trust Fund
Indirect payment Gov’t. does not own provider
organizations and does not hire providers
Medicare Part A Benefits
90 inpatient days in a benefit period Deductibles for days 1-60
Coinsurance for days 61-90
100 days in Skilled Nursing Facility Coinsurance
Medigap
70 % of Medicare enrollees have supplemental insurance Covers deductibles, coinsurance
Medicare Part B
Not compulsory
Covers physician services
Most $ from general treasury
Some $ from Social Security check deductions for Part B
Medicare Part B Benefits
Physician services Yearly deductible Monthly premium
Outpatient hospital care
No pharmaceuticals
No eye examinations
Medicaid (Title XIX)
A welfare or charity program
Most $ comes from U.S. General Treasury
State treasuries pick up rest of tab
Medicaid (Title XIX)
Eligibility requirements
Receiving Aid to Families with Dependent Children (AFDC)
Pregnant and postpartum women with children < 6 yrs. and income < 133% of poverty level
Aged, blind, and disabled receiving supplemental security income
Medicaid Benefits
Hospital inpatient care
Home health care
Physician services
Family planning
Other services as shown in text
Department of Defense
Military health care system for uniformed military personnel
CHAMPUS - Civilian Health and Medical Program of the Uniformed Services for families and dependents of active
military personnel
VA Health Care System
For retired, disabled, and other “deserving” veterans approximately 170 hospitals in
U.S. provide mostly acute hospital care some specialized outpatient care mental health care long term care
Moral hazard
When have insurance, want to reap the benefits of it
Can lead to excess use of health services
To control effects of moral hazard, multiple techniques used
TEFRA
Tax Equity and Fiscal Responsibility Act (1982)
Encouraged Medicare HMOs
Prospective payment for Medicare (DRGs)
RBRVS
Resource-based relative-value scale (1992)
for Medicare Part B
Based on physician work, practice expense, and malpractice insurance
Controlling excess use
In the U.S., we tend to rely on risk distribution and market incentives
Patient incentives (cost sharing)
Provider incentives (reimbursement)
Utilization review
Health plan competition
Patient incentives: Deductibles
Money that must be paid by the individual before insurance benefits kick in
e.g. the patient must pay for $500 of medical charges before insurance begins to pay
Criticized for contributing to delays in treatment
Patient incentives
Copayment Fixed amount paid for each service consumed e.g. a patient has to pay $15 every time
he/she visits a physician
Coinsurance A percentage of money paid by individual for
each service e.g. the insurer pays 80% of surgery charges;
the patient pays 20%
Physician reimbursement
Fee-for-service (FFS)
Prepayment
Salary
Utilization review
Prospective
Retrospective
Concurrent