Assignment # 1 Explain the basics of health insurance and coverage. Demonstrate

Explain the basics of health insurance and coverage.

Demonstrate the complexity of health care costs and the large variation in out-of-pocket costs based on insurance status.

Weigh the impact of insurance coverage and out-of-pocket costs with the ability to adhere to treatment recommendations.

Explore how provider reimbursement models can affect delivery of high value care.

Encourage physicians to not practice “one size fits all” medicine.

Here mention statistic that medical bills are the leading cause for personal bankruptcy, and that 78% of those who file for this reason HAD insurance at start of their illness

it is important to realize that uninsured patients are billed the full charge except in certain states (for example, New York), where state law sets the maximum amount that uninsured patients can be billed at 17% above Medicare rates.

Definitions:

Cost: dollar amount that it costs for a provider to deliver a health care service

Charges: the financial amount a health care provider asks for a service

often much higher than cost and reimbursement

only uninsured patients are billed charges

Reimbursement: amount a third party payer (i.e., insurance) negotiates as payment to the provider

may drive charge inflation

Price: the amount a patient pays out of pocket for a service

hardest number to estimate, but this matters most to patients

Answer:

Health coverage is not mutually exclusive so adds up to >100% – bottom line, most of health insurance is employment based

Here discuss:

Uninsured rates peaked at 15.5% in 2010 and have been dropping

1 in 3 Americans are covered by Medicare or Medicaid – the spending in this group is higher than the percent covered – why?

10% of the medicare population accounts for 59% of Medicare spending

Individual Private Insurance:

Individual policies involve an individual person paying a premium directly to a “health plan” or insurance company, which reimburses providers.

Individual policies provide health insurance for approx. 11% of U.S. population.

Answer: Individual private insurance. A third party, the insurance plan (health plan), is added, dividing payment into a financing component and a reimbursement component.

Employment-Based Private Insurance:

Employers usually pay all or part of the premium that purchases health insurance for their employees.

This is a tax-deductible business expense and the government does not treat the health insurance fringe benefit as taxable income to the employee.

Therefore, the government is in essence subsidizing employer-sponsored health insurance.

This subsidy was estimated at $260B/year in 2009.

Answer: Employers get a direct subsidy for providing health insurance but ALSO enjoy tax-free status of their contributions to health insurance benefits

– This is the largest tax expenditure by the federal government

Government-Financed Insurance:

In the late 1950s, less than 15% of the elderly had health insurance.

In 1965, Medicare (for the elderly) and Medicaid (for the poor) was enacted

First tax-financed govt. insurance

Answer: For Medicare, must pay taxes to qualify, for Medicaid, eligibility not linked to taxes paid

Medicare Part A

Hospital insurance plan for the elderly

Financed through social security taxes

At age 65, pts who have paid >10 yrs into SSI automatically enrolled.

Those <65 totally and permanently disabled may enroll after 24 mos of disability.

Those with ESRD on HD usually enrolled without wait period.

Medicare Part B

Insures the elderly for physicians’ services

Financed by federal taxes and monthly premiums from beneficiaries

Available to those eligible for Medicare Part A who elect to pay the Medicare Part B premium of $104.90/mo (2015)

Medicare Prescription Coverage:

Medicare Part D

Voluntary prescription coverage that is added to original Medicare

Plans have monthly premiums in addition to that paid for Part B.

Deductibles vary but may not exceed $360 per year (2016).

Beneficiaries may owe a late enrollment penalty if they are without drug coverage for >63 days.

Medicare Advantage Plan

Beneficiaries can enroll in a private health plan to receive Medicare covered benefits.

Plans cover Medicare parts A and B and usually D.

One MUST have Medicare parts A and B to sign up.

Answer: There are 2 ways for Medicare beneficiaries to obtain prescription coverage: part D and the Medicare Advantage Plan

– About one third of Medicare beneficiaries are enrolled in the Medicare Advantage Plan

Medicaid:

Federal program administered by the states, with the federal government paying between 50% and 76% of total Medicaid costs

The federal government requires that a broad set of services be covered under Medicaid, including hospital, physician, laboratory, x-ray, prenatal, preventive, nursing home, and home health services.

Pharmacy coverage is optional but currently is provided in all states.

Covered groups: nonelderly low income persons and the disabled

Pre-ACA: Who were the Uninsured?

Adults without dependent children

Low or moderate income families (<400% poverty level)

Working families without access to employer sponsored insurance coverage

Undocumented persons

Answer: Uninsured Minorities: 26% of Hispanics and 17% of Black Americans were uninsured in 2013 compared to 12% of non-Hispanic whites.

The Affordable Care Act of 2010:

Aims: To decrease the number of uninsured Americans and reduce health care costs

Expansion of coverage:

Medicaid expansion: sets the Medicaid minimum income eligibility across the US to <138% of the federal poverty level

Health insurance exchanges: competitive markets with clear information to assist persons in purchasing insurance; subsidized for families <400% poverty limit

Answer: With the ACA changes, 55% of uninsured non-elderly are eligible for financial assistance to obtain coverage

Early estimates note that the uninsured rate dropped by 1 percentage point in early 2014

Medicaid enrollment has grown 14%

Discuss: Who is still uninsured in 2015?

Undocumented

Those who are eligible for Medicaid but have not enrolled

Those without other coverage who still feel that insurance is too expensive but opt to pay the penalty instead

Those who live in states that did not expand Medicaid and do not qualify

Does Health Insurance Make a Difference?

A patient story:

Mr. O is a 58 year-old man who does not have insurance and has not seen a physician in 10 years. He works as a landscaper. He presented to the ED with chest pain and weakness and was found to have both an NSTEMI and an acute MCA infarct in the setting of uncontrolled diabetes and hyperlipidemia.

What do you think happened to this uninsured patient with acute illness?

Why did this happen?

Answer:

Cardiac cath revealed diffuse triple vessel disease most appropriate for CABG

CABG is not appropriate in the setting of acute stroke; therefore, the patient was managed medically with aspirin, clopidogrel, beta blocker, ACEi, and statin as well as treatment for diabetes

Pt was discharged with the intent to have CBG performed in the future to allow time for healing from the acute stroke

One year later, the patient has still not obtained CABG

Uninsured:

Fewer regular medical visits and preventive health screenings

In 2013, 33% of uninsured reported a preventive health visit compared with 74% of those with employer-based coverage and 67% with Medicaid.

Lower survival rates for breast and colorectal cancer

Increased mortality (likely owing to greater morbidity from undiagnosed medical conditions, such as diabetes, HTN, and cardiovascular disease)

Less care during hospitalization

Less likely to receive a costly test or procedure

Higher in-hospital mortality rates

Answer:

Insurance helps: gaining Medicaid coverage results in 35% increase in likelihood of having an outpatient visit

Answer:

The patient had the high deductible plan so did not follow up. Cost- particularly out of pocket cost- impacts the adherence of all patients (even those with the best education and insurance)

The Medicare out of pocket costs do not include co-insurance (such as the Medicare advantage plan)

How do out of pocket costs affect adherence to the treatment plan?

Methods of Payment (Health Provider Reimbursement Models)

Diagnosis-related groups (DRGs)

Physician or hospital is paid one sum for all services delivered during one illness; there is a different set case-price for each of approximately 750 distinct DRGs (Medicare).

Per Diem

The hospital is paid for all services delivered to a patient during one day (private insurance, PPOs/HMOs).

Fee-For-Service

The physician or hospital is paid a fee for each service (e.g., medication, IV fluids, ECG, surgical procedure) provided (uninsured, some private insurance).

Capitation

One payment is made for each patient’s treatment during a month or year (has now virtually disappeared; previously, largely HMOs).

Answer:

Ask trainees whether they think these methods encourage or discourage high value cost-conscious practices?

Highlight the pitfalls of traditional FFS no disincentive to delivering unnecessary services (more is better if payer just keeps paying regardless of health benefit to patient)

Medicaid varies by state, and uses per diem, FFS, and DRGs depending on the state.

Methods of payment: ACOs:

Accountable Care Organizations (ACOs)

In 2010, a portion of the ACA authorized CMS to create an ACO program to service Medicare and Medicaid patients.

Realign value with payment incentives (“pay-for-performance”)

Accountable Care Organizations (ACO)

Definition: Doctors, hospitals, and other health care providers who come together to coordinate high quality care for Medicare patients

Goal: Ensure that patients get the right care at the right time without duplication of services or errors

Benefit: ACOs who provide high-quality care with lower costs will share the savings with Medicare.

Steps toward High Value Care:

Step one: Understand the benefits, harms, and relative costs of the interventions that you are considering.

Step two: Decrease or eliminate the use of interventions that provide no benefits and/or may be harmful.

Step three: Choose interventions and care settings that maximize benefits, minimize harms, and reduce costs (using comparative-effectiveness and cost-effectiveness data).

Step four: Customize a care plan with patients that incorporates their values and addresses their concerns.

Step five: Identify system-level opportunities to improve outcomes, minimize harms, and reduce health care waste.

Answer:

Refer to step 4 in the curriculum framework and highlight the fact that the residents just practiced step 4 in their small group activity. High value care is not “one size fits all medicine” and care plans must be individualized to reflect the values, concerns and support systems of individual patients.

Summary:

Insurance status and type of coverage (public, private, HMO/PPO, or high-deductible plan) affects adherence to recommended treatment plans.

Given large differences in coverage/affordability, we must all seek to individualize patient care to improve quality and safety and decrease unnecessary costs.[supanova_question]