Objectives of a Health Care system

Prepared by CMG Buttery MB BS MPH

 

 

Session 1

Read - CHAPTER 1:
Major Characteristics of US Health Care Delivery

Students will be able to describe, in generalities, how health care is delivered in the United States

THE PRIMARY OBJECTIVES OF A HEALTH CARE DELIVERY SYSTEM

To enable all citizens to receive health care services whenever needed--universal access
To deliver services that are cost-effective and meet certain pre-established standards of quality.

However as we will discuss later, the US is a medical care delivery system, while other countries place a premium on health.

Terms which you need to know:

• Access is the ability of an individual to receive healthcare services when needed. In this context, need is primarily determined by the patient. It is secondarily determined by a referring physician, especially for higher-level services. Health insurance is the primary means for ensuring access.
• Capitation is a payment mechanism in which all healthcare services are included under one set fee per covered individual. The fee is generally paid per month; hence it is also referred to as per-member-per-month (PMPM). The fee covers all services an enrollee may need during the entire year. A charge is the fee (or price) set by the provider. The charge is the amount the provider generally bills for services delivered. The payer may reimburse the charges only partially, which may necessitate balance billing to the patient.
• Demand is the quantity of health care demanded by consumers based solely on the price of those services.
• An enrollee is an individual enrolled in a health plan and therefore entitled to receive health services the plan provides.
• A free market is characterized by the unencumbered operation of the forces of supply and demand when numerous buyers and sellers freely interact in a competitive market.
• Gatekeepers are managed care general practitioners or primary care providers who typically manage routine services and determines appropriate referrals for higher-level or specialty services
• Global budgets are used to control costs in centrally managed systems. System-wide health care expenditures are budgeted. Resources are allocated within the budgetary limits. Availability of ser vices and payments to providers are subject to such budgetary constraints.
• Health Care Delivery and Health Services Delivery can have slightly different meanings, but in a broad sense, both terms refer to the major components of the system and the processes that enable people to receive health care. 
• Health plan is a contractual arrangement between the MCO and the enrollee-including the collective array of covered health services that the enrollee is entitled to. The health plan uses selected providers from whom the enrollees can choose to receive routine services.
• Integrated Delivery is a network of organizations that provides or arranges to provide a coordinated continuum of services to a defined population and that is willing to be held clinically and fiscally accountable for the outcomes and health status of the population.
• Managed care seeks to "manage" the utilization of medical services, the price at which these services are purchased, and consequently how much the providers get paid. It is the most dominant health care delivery system in the US today. It seeks to achieve better efficiencies in these areas by integrating the basic functions of health care delivery.
• Market Justice places the fair distribution of health care on the market forces in a free economy. Medical care and its benefits are distributed on the basis of people’s willingness and ability to pay.
• Medicaid is the government insurance program for the indigent. Medicare is the government insurance program for the elderly and certain disabled individuals.
• Moral hazard is the term used to explain the increased utilization of health care ser vices when people have health insurance coverage.
• National health insurance (NHI) is a tax-supported health plan that ensures universal access. Services are financed by the government but are rendered by private providers.
• National health system (NHS) is a tax-supported health plan that ensures universal access, but in this case the government also controls the service infrastructure.
• Need for health services (in contrast to demand for health services) is based on individual judgment. The patient makes the primary determination of the need for health care and, under most circumstances, initiates contact with the system. The physician may make a professional judgment and determine need for referral to higher-level services.
• Primary care is basic and routine care delivered by a general practitioner. In a managed care system, the primary care physician also makes the determination for the need for higher-level services.
• A provider can be an individual health care professional, a group, or an institution that delivers health care services and receives reimbursement directly for those services. A registered nurse who is employed by a hospital is not a provider since his or her services cannot be billed for reimbursement. The same registered nurse working as a nurse practitioner in private practice could be a provider if he or she can bill for services.
• Safety net providers offer comprehensive medical and enabling services targeted to the needs of vulnerable populations.
• Single-payer system refers to a system in which there is a single payer as opposed to multiple payers. The single payer is generally the government, as is the case in a national health insurance program.
• Sickness funds are private not-for-profit insurance companies that are responsible for collecting the contributions and paying physicians and hospitals within a socialized health system.
• In a socialized health insurance (SHI) system, such as in Germany, health care is financed through government-man-dated contributions by employers and employees. Health care is delivered by private providers.
• Socialized justice emphasizes the well-being of the community over that of the individual; thus the inability to obtain medical services because of a lack of financial resources would be considered unjust.
• Supplier-induced demand refers to the demand for health care services created by providers for their own financial benefit.
• A system is a network of interrelated components that have been designed to work together coherently.
• A third party is an intermediary between patients and providers. Third parties carry out the functions of insurance and payment for health care delivery.
• Universal access means that almost all citizens are entitled to receive health care services that include routine and basic health care
• Utilization refers to the quantity of health care consumed.
• Vulnerable Populations, those who are poor and uninsured or of minority and immigrant status, live in geographically or economically disadvantaged communities and receive care from “safety net” providers.