Chapter 9



Chapter 9

Health Care Systems and Policy

Lecture Launcher

What are some of the current consumer trends affecting health care? Why is this an issue for community nutritionists?

Chapter Outline

I. Introduction

A. In 2000, Americans spent more than $1.2 trillion for health care which represents over 13 percent of the gross national product.

B. This amount exceeds the average amount spent by any other industrialized country.

C. Public policy is attempting to direct our medical system toward health promotion although Medicaid and Medicare and other major third-party payers offer limited reimbursement for preventive procedures.

D. Many studies show that early detection and intervention, immunization, and behavior change could significantly reduce many of the leading causes of death and disability.

II. An Overview of the Health Care Industry

• There are two general categories of health insurance in the United States: private and public.

A. Private Insurance

• Approximately 70.2 percent of Americans have private insurance.

• Private insurance can be in the form of traditional fee-for-service insurance or group contract insurance.

1. Traditional Fee-for-Service Plans. The traditional fee-for-service plans include a billing system in which the provider charges a fee for each service rendered.

a. Critics of this plan claim that they encourage physicians to provide more services than necessary.

b. Proponents prefer the greater flexibility and unrestricted access to physicians, tests, hospitals, and treatments.

2. Group Contract Insurance. Managed-care systems, represented by health maintenance organizations (HMOs) and preferred provider organizations (PPOs), are prepaid group practice plans that offer health care services through groups of medical practitioners.

a. The goal of managed care is improved quality of care with decreased cost.

b. Ninety-one percent of employees with health insurance were enrolled in managed-care plans in 1999.

c. HMOs provide comprehensive services across the continuum of care and they make money by keeping people healthy.

d. Prepaid group health plans emphasize health promotion since they provide health care services at a preset cost.

e. By keeping people healthy, HMOs avoid lengthy hospitalizations and costly services.

B. Public Insurance. Public insurance includes Medicare and Medicaid and these are administered by the Centers for Medicare and Medicaid Services (CMS).

1. The Medicare Program. Medicare is the largest health care insurer in the U.S. and it is designed to assist people 65 and older, people of any age with end-stage renal disease, people eligible for Social Security disability payment programs for more than 2 years, and qualified railroad retirement beneficiaries and merchant seamen.

• Medicare consists of two separate parts including hospital insurance (Part A) and medical insurance (Part B).

a. Medicare Part A. Medicare Part A provides hospital insurance benefits that include up to 90 days of inpatient care annually with a 20 percent coinsurance fee.

1. Hospital inpatient charges are reimbursed according to prospective payment system known as diagnosis related groups (DRGs).

b. Medicare Part B. Medicare Part B is an optional insurance program financed through premiums paid by enrollees and contributions from federal funds.

1. Enrolled Medicare Medical Nutrition Therapy (MNT) providers are able to bill Medicare for MNT services provided to beneficiaries with Type 1, Type 2, and gestational diabetes, nondialysis kidney disease, and post-kidney transplants.

c. Coverage Gaps. The two most notable gaps in Medicare coverage have been prescription drugs and long-term institutional care.

1. Medicare Modernization Act

2. Medicare Advantage Plan

2. The Medicaid Program. Medicaid is a joint state and federal program that provides assistance with medical care for eligible, low-income persons, certain low-income pregnant women and children, the aged, blind, and people with disabilities, and members of families with dependent children in which one parent is absent, incapacitated, or unemployed.

a. The individual states define eligibility, benefits, and payment schedules.

b. Typically, one must meet three criteria, including income, categorical, and resource.

c. Medicaid covers a variety of services and settings, including inpatient and outpatient hospital services, physicians’ services, skilled nursing home and home health services, and laboratory and x-ray tests.

d. To date, 36 state Medicaid programs cover certain forms of nutrition services provided by dietitians.

3. The State Children’s Health Insurance Program. The State Children’s Health Insurance Program (SCHIP) is the largest single expansion of health insurance coverage for children in more than 30 years.

a. States have flexibility in targeting eligible uninsured children.

b. Many of the children served come from working families with incomes too high to qualify for Medicaid but too low to afford private health insurance.

C. The Uninsured. The uninsured include the working poor and those who work for small businesses.

1. The employed uninsured number 15 million.

2. The nonworking uninsured number 9 million and include the homeless, some deinstitutionalized mentally ill patients, and low-income people who do not qualify for Medicaid.

III. Demographic Trends and Health Care

• By the year 2030, the baby boom will become a senior boom with 21 percent of the population over 65 years of age.

• Racial and geographical factors in the population are also important to the shape of the future.

A. The Need for Health Care Reform

• Health care reform refers to the efforts undertaken to ensure that everyone in the U.S. has access to quality health care at an affordable price.

• Some of the challenges of health care reform include:

• Making health care accessible to everyone.

• Containing costs.

• Providing nursing home care to those who need it.

• Ensuring that Medicare and Medicaid can serve all who are eligible.

• Cost, access, and quality are interrelated and manipulating one has an astounding impact on the others.

• Health care policy makers are studying alternative models of delivery and financing in hopes of applying other nations’ successes to the U.S.

1. The High Cost of Health Care. Health care inflation is well established and the level of health care activity is expected to grow as a result of various factors including: an aging population; increased demand; and continuing advances in medicine.

• Major contributors to health care expenditures in the U.S. are the administrative cost of the insurance process itself and professional liability costs.

a. Efforts at Cost Containment. Efforts to curb soaring health care costs cover a broad spectrum, from slowing hospital construction to reducing length of hospital stays, and increasing copayments and deductibles for insured employees and Medicare recipients.

1. One example of cost containment is the prospective payment system (PPS) that the federal government implemented.

a. The purpose of the PPS was to change the behavior of health care providers by changing incentives under which care is provided and reimbursed.

b. Prospective payment means knowing the amount of payment in advance.

c. PPS uses diagnosis related groups (DRGs) as a basis for reimbursement.

d. Patients are classified according to the principal diagnosis, secondary diagnosis, sex, age, and surgical procedures.

e. There are 23 categories and a total of 490 DRGs.

f. One consequence of PPS has been an increased focus on outpatient services.

2. Equity and Access as Issues in Health Care. Public opinion polls in the U.S. reveal that most people believe all citizens are entitled to access to health care but debate continues about the acceptable level of health care and what benefits should be included.

a. Racial and Ethnic Disparities in Health. A recent report released by DHHS shows significant improvements in the health of racial and ethnic minorities but also indicates that important disparities in health persist.

IV. Health Care Reform in the United States

• Almost all industrialized countries except the U.S. have national health care programs.

• In these systems, coverage is generally universal and uniform and costs are paid entirely from tax revenues or by some combination of individual and employer premiums and government subsidization.

• Health care reform in the U.S. raises a formidable list of issues including overall cost containment, universal access, emphasis on prevention, and reduction in administrative superstructure and costs.

• While the government remains undecided on what kind of health care system is needed or how to pay for it, health care reform is evolving at an accelerating rate without legislation.

A. Nutrition as a Component of Health Care Reform

• Many believe that nutrition services are the cornerstone of cost-effective prevention and are essential to halting the spiraling cost of health care.

• The American Dietetic Association (ADA) has urged that nutrition services be included in any health care reform legislation.

• Registered dietitians also need to be recognized as the nutrition experts of the health care team.

1. Cost-Effectiveness of Nutrition Services. ADA encourages all of its practitioners to document the cost-effectiveness of nutrition services.

a. Cost-effectiveness studies compare the costs of providing health care against a desirable change in patient health outcomes.

b. Effective nutrition therapy can produce economic benefits as a result of altered food habits and risk factors.

c. Practice guidelines or protocols that clearly specify appropriate care and acceptable limits of care for each disease state or condition are important to enhance the quality, efficiency, and effectiveness of the health care system.

1. Care delivered according to a protocol has been linked with positive outcomes for the client.

2. Examples of outcomes include measure of control (serum lipid profiles), quality of life, dietary intake, or patient satisfaction.

3. Developing standardized protocols of care for nutrition intervention is considered a must for achieving payment for nutrition services and expanding current levels of third-party reimbursement.

B. Medical Nutrition Therapy and Medicare Reform. The ADA believes that reimbursement for nutrition services through Medicare and Medicaid is inadequate and supports the inclusion of medical nutrition therapy as a covered benefit in all types of health care delivery.

V. On the Horizon: Changes in Health Care and Its Delivery

A. The future offers much that is positive for the profession of dietetics.

B. Yet to be achieved are the effective provision and allocation of resources, such as nutrition services as part of preventive care.

C. A coordinated strategy for health care, political will, and active collaboration of both health care professionals and consumers of health care services will be required to achieve this goal.

D. Health care reform for the U.S. is certain, but the exact nature of the reform will continue to evolve.

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