Navigate the US Healthcare System, Piecing Together the Healthcare Puzzle
About this patient handbook…
This patient handbook has been developed to describe the basic structure and features of the US healthcare system, how healthcare services are financed and delivered to patients and the impact of the Affordable Care Act on how US citizens obtain access to healthcare services and insurance.
The U.S. Healthcare System Structure
The U.S. health care system is one of the largest and most complex in the world. The total health care spending in the U.S. is over $3 trillion per year which translates to over $20,000 a year for a family of four. It includes thousands of hospitals, nursing homes, care facilities, practices and partnerships, web-based and IT supported service companies, managed care organizations, and major manufacturing corporations. As this industry continues to grow, long-known issues of increasing costs, shrinking patient access, and quality concerns increase as well CITATION Gre16 l 1033 (Green, 2016).
CITATION Pubnd l 1033 (Publishers, n.d.)The U.S. Healthcare System Financing
In the United States, health care providers i.e. doctors, hospitals, and other care facilities receive funding through private insurance, government insurance programs such as Medicare and Medicaid, and patients themselves through personal, out-of-pocket funds CITATION Rog18 l 1033 (Roger I. Schreck, 2018).
Primary Characteristics of the U.S. Healthcare System
The U.S. health care system is not only more complicated in structure, but unique in delivery compared to other industrialized countries. Unlike other countries, the U.S. does not have a consistent health care delivery system. Other countries offer universal health care coverage, while the U.S. only recently enacted legislation mandating healthcare coverage. Other countries provide a national health service, a single-payer national health insurance system, or a multi-payer universal health insurance fund. The U.S. health care system is a complicated labyrinth with health care spending from private funds, private businesses and government spending, both at the federal and state and local level CITATION Dep16 l 1033 (Department for Professional Employees, 2016).
U.S. Healthcare System Stakeholders and Roles
The major stakeholders in the U.S. Healthcare System include policymakers, patients, providers, and payors.
Policymakers: Policymakers establish the framework of the healthcare delivery. They aggregate data from patients, providers, and payors to develop metrics to inform health and health economic policies.
Services to be provided; by whom, where and how
Payment for services
Quality of services being delivered
Address underserved populations
Planning for future health care considerations
Patients: Policymakers have a fiduciary responsibility to the US population and everyday citizens who become patients. The country’s policy framework is structured to benefit these patients. Patients receive healthcare services from providers and as customers are recipients of the payors reimbursements.
Providers: Providers deliver care within the policy framework. When they provide health services to patients, they maintain health information about them. The providers coordinate patient care with other providers as care team members. Many providers are independent businesses that must manage their own operations and finances.
Payors: Payors operationalize the financial elements of the policy framework. Payors enroll patients as beneficiaries. They procure care services from the providers on behalf of their patient beneficiaries. They also must take on the actuarial task of ensuring the financial sustainability of the care program. They report to policymakers.
Each of these stakeholders plays a different role in relation to the others CITATION Prend l 1033 (Press Books, n.d.).
CITATION Prend l 1033 (Press Books, n.d.)Healthcare Financing Models
In this section, we will describe the four basic models of healthcare, how they’re financed and how they compare. The four models: Beveridge, Bismark, National Health Insurance, and Out-of-Pocket.
Beveridge Model: refers to the single payer national health services model, like the one in the U.K. Many hospitals and clinics are owned by the government and some of the providers are government employees. This system also has private doctors who collect their fees from the government. In many European countries, you are never billed for healthcare. These systems tend to have low costs per capita, because the government, as the sole payer, controls what doctors can do and what they can charge CITATION Phy10 l 1033 (Physicians for a National Health Program, 2010).
Bismark Model: refers to a privatized model that use non-profit sickness funds or a social insurance model. It is designed to cover everybody with no profits. In Germany for example, which has about 240 different funds, the government has tight regulations controlling much of the costs. Other countries that use this model include: France, Belgium, the Netherlands, Japan, Switzerland, and, to a degree, in Latin America CITATION Phy10 l 1033 (Physicians for a National Health Program, 2010).
National Health Insurance: refers to single payer national health insurance systems like those in Canada, South Korea and Taiwan. This model has components of both Beveridge and Bismarck models. National health insurance uses private-sector providers with government-run insurance program payments. Every citizen pays into the program CITATION Phy10 l 1033 (Physicians for a National Health Program, 2010).
These systems negotiate lower prices because they have significant market influence. As an example, Canada’s system has negotiated such low prices from pharmaceutical companies that Americans have resorted to buying pharmaceuticals in Canada at more affordable prices. National Health Insurance plans control costs by limiting covered medical services, or by making patients wait to be treated. With no marketing or financial motive to deny claims and no profit, these programs tend to be cheaper and much simpler to administer and understand than American-style for-profit insurance CITATION Phy10 l 1033 (Physicians for a National Health Program, 2010).
Out-of-Pocket Model: refers to market-driven health care. Many countries are too poor and too disorganized to provide any kind of organized medical care. In these countries the wealthy receive medical care; the poor get sick or die. For example, in rural regions of Africa, India, China and South America, hundreds of millions of people may live their lives without ever seeing a healthcare provider or doctor. Some may have access to a village healer using traditional cultural remedies that may or not be effective against disease CITATION Phy10 l 1033 (Physicians for a National Health Program, 2010).
Only the developed, industrialized countries which translates to approximately 40 of the world’s 200 countries have established health care systems. The United States is unique in its healthcare delivery model. While other countries have settled on one model for everybody, it appears that the U.S. maintains separate programs for separate classes of people. Single systems are much simpler to understand, manage and are more equitable and less costly for its citizens than the US model CITATION Phy10 l 1033 (Physicians for a National Health Program, 2010).
Some people consider all health care debates surround Canadian Health Care vs. American. This is not the case. According to the World Health Organization’s (WHO) ranking of the world’s health systems, neither Canada nor the USA ranks in the top 25. Canada ranking in at 30, the U.S. 37. WHO also states that the United States spends a higher portion of its gross domestic product on health care every year than any other country CITATION Edm09 l 1033 (Edmonds, 2009).
Stakeholder Funding and Impact on Healthcare Delivery Services
As described earlier, anyone or any organization directly or indirectly affected by the operation of the healthcare industry is considered a stakeholder. Stakeholders in the healthcare industry include customers/patients, employees/healthcare providers, creditors, shareholders and the government.
Creditors loan their money to healthcare organizations either by providing materials or equipment for operations or as cash. In this way, healthcare organizations can invest in capital equipment and technology and research to provide the best care possible to their patients. The healthcare company pays interest on the loans, regardless of whether the organization is profitable or not. Creditors may hold the assets of the organization as security. If the organization is unable to pay their loans, these creditors can reclaim their assets. Creditors can lose their investments if the healthcare company declares bankruptcy CITATION Wor12 l 1033 (WordPress, 2012).
Medicare has different parts that help cover specific services:
Medicare Part A (Hospital Insurance) – Part A helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care. Beneficiaries must meet certain conditions to get these benefits. Most people don’t pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working.
Medicare Part B (Medical Insurance) – Part B helps cover doctors’ services and outpatient care. It also covers some other medical services that Part A doesn’t cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary. Most people pay a monthly premium for Part B.
Medicare Part D (Prescription Drug Coverage) – Medicare prescription drug coverage is available to everyone with Medicare. To get Medicare prescription drug coverage, people must join a plan approved by Medicare that offers Medicare drug coverage. Most people pay a monthly premium for Part D CITATION USC18 l 1033 (U.S. Centers for Medicare ; Medicaid Services, 2018).
How the Affordable Care Act is impacting how US citizens obtain health insurance
The federal Patient Protection and Affordable Care Act (P.L. 111-148), was signed March 23, 2010, and amended by the Health Care and Education Reconciliation Act, signed March 31, 2010, is also referred to as the Affordable Care Act (ACA)
The key Federal provisions included in the ACA are intended to expand access to insurance, increase consumer protections, emphasize prevention and wellness, improve quality and system performance, expand the health workforce, and curb rising health care costs CITATION Nat11 l 1033 (National Conference of State Legislatures, 2011).