Transcript Healthcare Costs and Payment Models 2013

Healthcare Costs
and Payment Models
2013-2014 • Presentation 2 of 6
Learning Objectives
• Explain the basics of health insurance and coverage
• Demonstrate the complexity of healthcare costs (charges vs.
reimbursement vs. out-of-pocket) and the large variation in
out-of-pocket costs based on insurance status
• Weigh the impact of insurance coverage on the ability to adhere to
treatment recommendations (i.e. follow-up, medications, testing)
• Explore how provider reimbursement models can affect delivery of
high value care
• Encourage physicians to not practice “one size fits all” medicine
• Identify areas of waste within our own hospital system(s)
An uninsured patient’s perspective:
Mr. M
• 28-year-old man with severe abdominal pain,
diagnosed in the ED with ruptured appendicitis,
treated with IV antibiotics for 4 days, followed by
surgery
• Patient: “I grew up in a family without health insurance
my whole life, and our policy was basically ‘Give it a
couple of weeks’… so I didn't want to call 911 or go to
an emergency room”
An Uninsured Patient’s Perspective
• Julian McCullough, comedian
• Recorded at “Told,” a storytelling show in
New York City
• As heard on This American Life (NPR) (#439)
• “How much? No health insurance, 7 days in
the hospital, … appendectomy:”
$45,000
Click icon for audio
1
Sources of Health Insurance
Uninsured
Uninsured
14%
Military
3%
Individual
private
insurance
9%
Employment
based
47%
• Employer doesn’t offer
• Part-time work
• Unemployment
And do NOT qualify for Medicare/Medicaid
Medicare
13%
Medicaid
14%
Source: U.S. Census Bureau
Why do you think that government financing
accounts for nearly 50% of the expenditures
when it covers only 27% of population?
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
5% of U.S. population.
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 $200B/year in 2006
Government-Financed Insurance
• In the late 1950s, less than
15% of elderly had health
insurance.
• In 1965, Medicare (for the
elderly) and Medicaid (for
the poor) was enacted
• First tax-financed govt.
insurance
Government-Financed Insurance
3
Medicare Part A
Medicare Part B
• 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
• 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 (2013)
Government Financed Insurance
4
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
Affordable Care Act (ACA=Obamacare)
• Beginning Jan 1 2014, sets the Medicaid minimum income eligibility across the US
to <133% of the federal poverty level
• For the first time, low income adults without children are guaranteed coverage
without needing a waiver
Access to Healthcare
Does Health Insurance Make a Difference?2
Uninsured
• Fewer regular medical visits and preventive health screening
• Higher rates of undiagnosed and uncontrolled HTN, diabetes,
and hypercholesterolemia
• Lower survival rates for breast and colorectal cancer
• Increased mortality (likely owing to greater morbidity from chronic
medical conditions like diabetes, HTN, and cardiovascular disease)
• Less care during hospitalization
• Less likely to receive a costly test or procedure
• Higher in-hospital mortality rates
Clinical Case #2 & Group Activity:
Soccer Injury
• A 17 yo male is seen in the office by
an orthopedist after a soccer injury
to his anterior chest; he gets an x-ray
that shows a clavicular fracture
• Patient is the son of two doctors and
has health insurance; he did not
utilize the emergency department
• Rx: sling, NSAIDS, rest, follow up in 6
weeks for office visit and x-ray
(Fill in the blanks)
Charges
Reimbursement
Out of Pocket Cost
(HMO)
Out of Pocket Cost
(High deductible
plan or health
savings account)
Office
Visit
X-ray
Group Activity
Office Visit
X-ray
Charges
$250
$150
Reimbursement
$100
$50
Out-of-Pocket Cost
(Insurance with co pays)
$25
$15
Out-of-Pocket Cost
(Some high deductible
plan or uninsured)
$250
$150
How much would this patient have
to pay:
• If the patient is enrolled in an
HMO/PPO with co-pays?
• If the patient is enrolled in a
high deductible health plan?
• If the patient is uninsured?
How might this 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, EKG, 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 by HMOs)
Methods of payment: ACOs
Accountable Care Organizations (ACOs)
• Realign value with payment incentives (“pay-for-performance”)
• In 2010, a portion of the ACA authorized CMS to create an ACO
program to service CMS users (Medicare and Medicaid)
• Shared savings approach that sets aside a financial reward to
groups of providers or large healthcare organizations who come in
under a yearly ‘benchmark’ spending goal and meet pre-defined
quality standards
Clinical case #3
• 55-year-old woman admitted with a methicillin-sensitive
Staphylococcus aureus and Pseudomonas aeruginosa
osteomyelitis. Her wound is debrided and she is started on
IV piperacillin/tazobactam. A PICC line is placed.
• She lives at home with her husband who is healthy and her
32-year-old daughter
• On hospital day #4 she is improved and you think she is
medically ready to leave the hospital. She will need 6 weeks
of IV antibiotics to clear the infection.
Small group activity
 Divide into 3 small groups
 Each group will have a different discharge
scenario for this case
 Each group will answer two questions about their
scenario
1. Can you safely discharge this patient home?
2. If not, what alternatives do you have?
Steps Toward High Value,
Cost-Conscious Care5
• 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 the patient that incorporates their
values and addresses their concerns
• Step five: Identify system level opportunities to improve outcomes,
minimize harms, and reduce healthcare waste
Summary
• Insurance status and type of coverage
(public, private, HMO/PPO or highdeductible 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
Commitment in your practice
• Can you think of a time when your patient didn’t comply with your
recommendations because of cost?
• How could you have tailored your treatment plan to improve outcomes?
Write down at least one thing to Start doing and one thing to Stop doing
START:
STOP:
References
1. Clip courtesy of This American Life from WBEZ Chicago
2. J Michael McWilliams. Health Consequences of Uninsurance among
Adults in the United States: Recent Evidence and Implications.
Milbank Q. 2009 June; 87 (2): 443-494:
3. Department of Health and Human Services. www.medicare.gov
(accessed 7/9/2013)
4. Department of Health and Human Services. www.medicaid.gov
(accessed 7/15/2013)
5. Adapted from Owens, D. Ann Intern Med. 2011;154:174-180