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Healthcare reimbursement quizlet
Similarities and differences between Medicare and Medicaid managed care plans
Competition in the healthcare industry
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Cost Shifting According to the Delivering Health Care in America, cost shifting is a method used by insurance companies to balance inadequate payments, mostly to bridge the gap from low government reimbursement (Shi & Singh, 2015). Cost shifting is when private insurance companies charge people more to make up for the money they lose. Hospitals and other health care providers are able to compensated for the services they provide for uninsured patients by increasing payments to private insurance (Coughlin, Holahal, caswell& McGrath, 2014). Government programs such as, Medicare and Medicaid reimburse hospitals at a very low rate, according to Potter (2015) the only way hospitals can be able to keep providing care and make up for their looses …show more content…
According to an article called “How Much Do Hospitals Cost Shift”, hospitals have not been charging private insurances more to make up for their loss (potter, 2015). The study suggests that the reason is because consumers have other surrounding hospitals to choose from which will force hospitals to balance their expenses in other ways without disrupting patient flow. Frank (2015) mentions a study done by Health Affairs in 2013, which states that hospitals do not charge private insurance companies more because they received less money from the government. If there is a hospital in an area without any other competition, they tend to increase prices on private insurance providers (Potter, 2015). Cost shifting is a system used by hospitals to make up for there looses depending on how convenient it is. If more competition exists in the marketplace the less likely cost shifting will occur since patients will have a range of possible options. For example, a patient is most likely to choose a cheaper clinic if he/she lives in an area where there are affordable
Bigger hospitals increasing market share Loss of Medicaid and Medicare reimbursement Decline in revenue Loss of patients
With the passage of the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) has initiated reimbursement based off of patient satisfaction scores (Murphy, 2014). In fact, “CMS plans to base 30% of hospitals ' scores under the value-based purchasing initiative on patient responses to the Hospital Consumer Assessment of Healthcare Providers and Systems survey, or HCAHPS, which measures patient satisfaction” (Daly, 2011, p. 30). Consequently, a hospital’s HCAHPS score could influence 1% of a Medicare’s hospital reimbursement, which could cost between $500,000 and $850,000, depending on the organization (Murphy, 2014).
The current health care reimbursement system in the United State is not cost effective, and politicians, along with insurance companies, are searching for a new reimbursement model. A new health care arrangement, value based health care, seems to be gaining momentum with help from the biggest piece of health care legislation within the last decade; the Affordable Care Act is pushing the health care system to adopt this arrangement. However, the community of health care providers is attempting to slow the momentum of the value based health care, because they wish to maintain their autonomy under the current fee-for-service reimbursement system (FFS).
Insurance companies monitor the average fees for doctors, medical services, and general healthcare related services in each area. When your claim comes in, they use your local data to determine if the fees are usual customary or reasonable. If they determine your services exceed the normal rates for the area, they might pass the additional cost to you. It’s a good practice for you to read your policy to determine when you might incur additional fees, ask your provider questions, and ask your doctor’s office for a list of fees.
In order to fully understand the uninsured and underinsured problem that hospital administrators face the cause must be examined. The health outcomes of uninsured individuals are generally worse than those who are insured. Uninsured persons are more likely to experience avoidable hospitalizations, diagnosed at later stages of disease, hospitalized on an emergency or urgent basis, and more seriously ill upon hospitalization (Simpson, 2002) Because the uninsured often lack an ongoing relationship with a health-care provider, they are less likely to receive preventive care and diagnostic tests (Kemper, 2002). Many corporations balance their budget through cost cuts and other moves, but have been slammed with an increasing load of uninsured patients, coupled with reduced payments from government and private insurance programs. In 2000, 564,476 uninsured patients came through Health and Hospitals Corporations health care centers, a 30 percent increase from 1996. In the same period, Congress reduced Medicare reimbursements to hospitals, while Medicaid reimbursements to primary care clinics remained basicall...
However, according to Jenna Flannigan, write at Healthline.com, America’s current for-profit system allows for competition between medical and pharmaceutical companies which drives prices up astronomically. “In countries where health insurance is government-run or nonprofit-run, there is no profit factor to drive up prices…For example, a typical bypass surgery in the Netherlands costs about $15,000 while in the United States it costs about $75,000” (Flannigan). This figure illustrates how the US’s needless competition between private, for-profit organizations make medical care unnecessarily unattainable to those who aren’t very affluent or do not have comprehensive medical care. These bloated prices do not even contribute to better care a majority of the time, as pointed out by political consultant Karin J. Robinson. “Here in Britain, for instance, we spend about 8% of the country's annual GDP on health care, compared to 15% in the US, and yet the overall health of the population is similar, with perhaps even a slight advantage for the UK” (Robinson). America’s current system is far more expensive, but for what reason? A healthcare system should be driven a will to help those in need, not for the personal gain of companies that are rife with greed. America needs to follow the path of other first-world nations and take a different approach to
The public, the media and the politicians turned against managed care and the end of the 1990’s was characterized by managed care backlash. Managed care was accused of paying little attention to patients in order to save costs for the institutions. As a result, the cost containment activities of such institutions were greatly limited by the states. Although we do not know the exact effect of managed care institutions on health care quality and prices, it is not considered a possible solution for rising health care spending. To fill this gap, I collected the most important theoretical and empirical investigations on the impact of managed care.
Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel.
A competitive market is one that allows easy entry and exit: a market in which companies are generally free to enter or to leave at will. This does not describe the health care market in the US. There are certain assumptions that the competitive market model operates under some assumptions, first is the consumer/patient has full information about the nature of the services required, the anticipated results of their decision and the benefits obtain from the service. This is not true in health care often time the patient is operating at a distinct information disadvantage when they require health care services such as insurance. If a patient purchases health insurance often they don’t know enough information to ascertain if they have purchased a quality plan. Second, consumers/patient and providers (physician, health insurance) act independently. This does not happen in health care because of the asymmetry of information that exists; patients must depend on the decisions made by their doctor or health care provider who is acting on their behalf as a health agent or gatekeeper. Sometimes physicians own diagnostic facilities or invest in health care organizations this affects their ability to be impartial. Third consumers bear the financial impact of their decision and are aware of price differences; most patients are insulated from the true cost of health care because of a third-party payer who bears the financial brunt of the decision to receive medical care. Shi and Singh state that even if a patient wanted to find out the cost of services sometimes it is difficult because of item based pricing. Fourth there is unrestrained competition regarding price and quality among providers. Access to the health care market unrestricted is b...
The price you pay for the same procedure, at the same hospital, may vary enormously depending on what kind of health insurance you have in the US. That's because of bargaining power. He talks about how government programs, like Medicare and Medicaid, can ask for a lower price from health service providers because they have the numbers: the hospital has to comply or else risk losing the business of millions of Americans. Greene also mentions that there are dozens of private health insurance providers in the United States and they each need to bargain for prices with hospitals and doctors. The numbers of people private insurances represent are much less than the government programs. That means a higher price when you go to the doctor or fill a prescription. Uninsured individuals have the least bargaining power. Without any insurance, you will pay the highest price. Lastly, John discusses the complicated reasons why the United States spends so much more on health care than any other country in the world, and along the way reveals some surprising information, including that Americans spend more of their tax dollars on public health care than
Generally around one fourth of the healthcare costs in America goes towards administrative costs (Watson). This cost is generally attributed to the fact that hospitals essentially have to barter with insurance companies to get money for the medical service they provide. The cost of these hospitals having to deal with insurance companies are
In BASF Group, Business Units are responsible for profit and for return on investment (profit centers), each reporting to an Operating Division. Products within a company of BASF Group that are supplied from one profit center to another for further processing or for sale (i.e. they leave the boundaries of the particular Business Unit or Operating Division) should as a basic rule be charged within the arm’s length principle establishing the downstream unit as a privileged partner. These supplies are therefore charged at transfer prices. Long-term effects of transfer price agreements on business developments and the strategy of upstream and downstream profit centers are taken into account in transfer pricing. BASF’s ZZ clearing desk is responsible for resolving transfer price definition and calculation disputes. As per clearing desk step wise process for calculation of transfer price is defined, which will be used for calculation of transfer pricing. The process cannot be mentioned in this thesis because of confidentiality reasons, and only a general review of approach will be explained.
As patients assume more responsibility for health costs in consumer-driven care models, hospitals are simplifying prices and billing statements. (Robinson & Ginsburg, 2007). Bills include all chargeable items in a charge master. (2007). The finance department modifies charges to earn profits, to respond to inflation, to account for expensive equipment and resources, and to survive competition. (2007). Hospitals adopt “pricing transparency” and provide more precise costs for specific services. The Health Care Price Transparency Promotion Act of 2007 “builds on existing state efforts to report hospital pricing information, requires insurers to disclose estimated out-of-pocket costs to consumers and requests that the Agency for Healthcare Research and Quality study the types of price information that consumers want and would find useful in making decisions.” (2007) The American Hospital Association supports these efforts and has “partnered with the Healthcare Financial Management Association on the Patient-Friendly Billing project to help promote clear, concise and correct financial communications.”
Some economists suggest that the market for healthcare is different from other competitive industries and therefore cannot act the same way. In principles, we learn the basic assumptions of a competitive market, (1) goods offered for sale are homogenous, (2) there must be many buyers and sellers so that each has a negligible impact on the market price and (3) For markets to work efficiently there can be no significant information failure affecting the decisions of the producers and consumers. In perfect competition, product’s must be homogeneous which means that goods that individual producers cannot alter or differentiate to collect a higher price. Health care is a heterogeneous product because the patient can experience a range of outcomes. There is an ongoing battle between hospitals and insurance companies. In theory, insurance companies negotiate with hospitals for a reduced rate. One of my favorites quotes I stumbled upon is from economist Uwe Reinhardt in regards to Obama and Obamacare “I wish I had a half hour with him to explain it to him. If you pit hundreds of little insurers against each other, what makes any one think that each of them has enough market clout to bargain successfully with a hospital? So I don 't think this public health plan, adding yet one more competitor, is going to bring costs down at
In healthcare, most people realize there is a difference between public and private sectors. The services provided in a private hospital versus a public hospital are the same the difference is the governance of the facility. The differences between the facilities could be the type of care provided, the insurance plans used, cost, and healthcare providers.