Unit I Essay assignment: Outline the creation and expansion of modern health insurance in the United States.
Unit I Essay assignment: Outline the creation and expansion of modern health insurance in the United States.
Unit I Essay For this assignment, you will write an informed essay. In your essay, complete the tasks outlined below. Outline the creation and expansion of modern health insurance in the United States
Unit I Essay
For this assignment, you will write an informed essay. In your essay, complete the tasks outlined below.
Outline the creation and expansion of modern health insurance in the United States.
Discuss how major developments in private health insurance, group health insurance, and government-sponsored health insurance have impacted the medical reimbursement process.
Explain how you foresee payers reacting in regard to how care is paid for as the health care industry undergoes changes to costs and coverage models.
Your response should be at least two pages in length, not counting the title and reference pages. All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations.
Not only is todays health-care system complex, but it is also vastly different from what it used to be.
The changes are numerous, and they constitute the significant transition from an indemnity plan based primarily on what the patient desired to a managed care system.
Within two generations, the American health-care system has experienced significant changes and continues to evolve.
What are the forces that are causing these shifts?
What makes health care different today than it was in the past?
What impact are the reforms having on families in Michigan and around the country?
What options do we have?
What does the future have in store for us?
All of these are critical considerations as our population becomes older, health-care prices rise, treatments get more expensive, and a greater number of individuals go without health-care coverage.
This essay will address these five issues in order to raise awareness of the changing realities of health care in the United States, with the goal of assisting individuals and families in navigating the system more effectively.
What are the factors that are causing the shift?
Weiss and Lonnquist (2000) discussed the important characteristics that influence a cultures attitude toward health and health care delivery.
There are crucial economic and situational considerations in addition to cultural beliefs and values.
Many of the trends that have led to the development of a managed care system have their roots in economic reality.
The rising expense of health care in the United States is indicated by both per capita spending and health care expenditures as a percentage of GDP (GDP).
Increases in U.S. health expenditures, according to the Health Care Financing Administration (1998), are as follows:
Health-Care Spending in the United States, 19601996
In Billions Per Capita Per Year
1960 $26.9 $141
1970 $73.2 $341
1980 $247.2 $1,051
1990 $699.5 $2,689
1996 $1,035.1 $3,708
Weiss and Lonnquist (2000) concluded that the United States has the worlds most expensive health-care system after evaluating cross-cultural data.
Health-care spending has increased at a faster rate than any other sector of the economy over the last four decades.
Examining national health care expenditures in relation to GDP is another approach to look at the rapid growth in spending.
According to Levit, Lazenby, and Braden (1998), Americans have seen expense rises that have outpaced the rest of the economy for the previous 40 years.
The proportion of GDP spent on health care increased from 5% in 1960 to over 14% in 1990.
Despite some stabilization, the percentage is expected to reach 15.6 percent or higher in 2010.
This rapid and large rise has been driven by a number of causes.
They are as follows:
Increases in important health care technologies and related expenses; Population growth in the United States, as well as an increasing number and percentage of old individuals in the population;
Allied health care professions are growing in popularity;
Increased reliance on medications and the expenditures associated with them;
Individual and family health-care insurance costs are rising, as are malpractice insurance premiums, lawsuit settlements, and jury awards.
Cost-increasing data suggests that action is required.
The first step taken by a health-care institution aiming to repair and balance its finances has been to look for cost-cutting opportunities.
What Has Changed in Health-Care Delivery?
Dranove (2000) uses the phrase from Marcus Welby, M. D. to managed care to describe the economic evolution of American health care.
While it may appear straightforward, it properly describes the types of changes that the population has gone through over time, some of which are perplexing to many people and reflect quite diverse approaches to health care.
Marcus Welby, played by Robert Young, was a fictitious television doctor who ran a practice out of his home.
He showed genuine concern and care for each of his patients in each episode, following them from the examining room to the hospital and back home.
He made time for everyone and frequently went out of his way to assist people with not only their physical but also their general life issues.
Few of the episodes addressed who was responsible for paying the bill: the doctors bill, the hospital charge, the bill for lab work, the bill for prescription medication, and, in todays reality, the bill for home health care or nursing home care.
According to Dranove (2000), the traditional US health-care system had three distinguishing characteristics over the majority of the twentieth century:
Patients trusted autonomous physicians to act as their agents; patients received complex treatment from independent, non-profit institutions; and insurers stayed out of medical decision-making and paid physicians, hospitals, and other providers on a fee-for-service basis.
Clearly, this was a situation that might easily lead to large expense rises.
Managed care, on the other hand, indicates a dramatic shift in business practices that has progressively spread throughout the health-care industry.
According to Dranove (2000), managed care begins with Health Maintenance Organizations (HMOs), which focus on the following:
enhancing health through preventative care; minimizing overuse and wasteful use of costly treatments; and standardizing and controlling the widely varied quality of care provided by traditional fee-for-service providers
While there are many different definitions of managed care, Bodenheimer and Grumbach (1998) described it simply as Organizations that pay for a patients treatment have taken on the responsibility of managing that care.
Payers and insurers no longer simply sign checks; they are now involved in decisions regarding how much, what sort, and from which providers a patient receives care (p. 78).
The Institute for the Future (2000) described managed cares growing influence as a system in which future internal managers in provider organizations, as well as external managers working for intermediaries and insurance plans, will have increasing authority over physicians behavior and patient compliance.
Until next time,
Marcus Welby is a British actor.
Managed care, on the other hand, is not a new concept.
According to Dranove (2000), it dates back to the 1890s, when doctors agreed to provide prepaid medical care to lodges, fraternal orders, unions, and other worker organizations.
These organizations already provided social benefits to its members, such as life insurance, so paying for health care was a natural expansion.
Prepaid group practice dates back to the early twentieth century, when industrial medicine and health care began to be supplied for a monthly fee that could be paid in advance.
Employers currently provide a substantial share (55 percent) of American health care insurance, and employees are now responsible for paying the price.
Insurers who could offer to lower or restrict expenses as much as possible, understandably, attracted to many people, and health insurance has remained cheap.
In the 1990s, managed care made remarkable progress.
According to a poll performed by Business & Health Magazine (Employer Sponsored Health Benefits Survey, 1997), in 1990, 62% of health benefit plans were traditional indemnity plans, while only 38% were managed care plans.
Only 18% of patients were classified as conventional in 1997, while 82 percent were classified as managed care.
Employment-related health insurance are being quickly converted to managed care plans or being phased out, according to the Institute for the Future (2000).
Managed care programs are rapidly covering other health insurance systems, such as Medicare and Medicaid, as well as privately purchased plans (which account for 25% of total health care insurance).
According to the Michigan Access to Health Care Coalition (2002), health insurance expenses will rise by 16 percent this year, or an average of $6,230 per employee.
Such hikes expand the gap between covered and uninsured, making it difficult for companies and employees to keep up.
Furthermore, the problem is exacerbated for families that are unable to pay for their own health care and insurance since they are not covered by their employers health insurance plan.
What Impact Do the Changes Have on Families?
While there is still disagreement about the viability and future of managed care, there is no denying the growing focus on cost management.
Both quantitative and qualitative outcomes of managed care and the ongoing growth of the American health-care system can be found.
They range from a decrease in hospital admissions and stays to an increase in ambulatory care, out-patient surgeries, and home care; from a focus on prevention and better consumer decisions about health-related behaviors to consumers sometimes limited choices in selecting practitioners and utilizing benefits; and from increased coverage limitations with higher deductibles and co-pays to the reality of a still significant portion of the population among the uninsured.
Four of these topics will be discussed in further depth further down.
Admissions to hospitals, outpatient surgeries, and home health care
From the mid-1940s through 1979, the number of hospitals climbed every year until it began to fall (Weiss & Lonnquist, 2000).
The availability of hospitals, beds, and admissions has fluctuated over four decades, as seen in the table below from a 1997 publication by the American Hospital Association:
Hospital Trends in the United States, 19501996
Year Hospitals Beds Admissions
1.46 million in 1950, 6,788 in 1950, 1950, 1950, 1950, 1950, 1950
18.48 million people
6.876 1.66 million 25.03 million in 1960
In 1970, there were 7,123,162 million people in the United States.
31.76 million dollars
6.965 1.37 million 38.89 million in 1980
6.649 1.21 million 33.77 million in 1990
6.201 1.06 million 33.31 million in 1996
Similar reductions in the number of hospitals and beds available in Michigan were recently documented by the Access to Health Care Coalition (2002).
For example, in 2001 and 2002, two of southeastern Michigans largest health-care systems (i.e., Metropolitan Detroit) suffered considerable losses, resulting in hospital and clinic closures.
These closures put additional on on existing hospitals, putting an already weak system under even more strain.
While hospital closures and mergers raise a slew of challenges and concerns, a major drop in the number of in-patient surgeries is linked to a decrease in the number of beds and admissions.
In 1985, in-patient operations accounted for 82 percent of all hospital surgical procedures, while out-patient surgeries accounted for 18 percent (Weiss & Lonnquist, 2000).
In 1995, in-patient and out-patient procedures accounted for 42 percent and 58 percent of all surgeries, respectively.
While the cost savings to insurers are significant, though difficult to quantify, the impact on official and informal after-care services, as well as home health care, is also difficult to predict.
Many more people are now able to go home the same day as their procedures.
This reality may not be as difficult for persons with familial and social supports as it is for patients who live alone and have little to no family or social network on whom to rely.`