HIMT 365 Lesson 9-10 Quiz_Tucker

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University of Wisconsin, Green Bay *

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365

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Health Science

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Apr 3, 2024

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HIMT 365 Lesson 9&10 Quiz The quiz consists of five short essay questions. One attempt is provided. After the quiz has been graded, you will be able to see any feedback I’ve provided. Tip: It is highly recommended that you look over the comments I provide. My feedback (if incorporated) will typically help you perform better on the exam. 1. Explain how physician fee schedules are different from market prices. Physician fee schedules differ from market prices in several key ways. Fee schedules establish predetermined prices for specific medical services. These prices are typically set by government agencies like Medicare or negotiated by private insurers. In contrast, market prices are determined by the interaction of supply and demand. Factors like physician expertise, patient location, and insurance coverage can influence market prices, leading to variations. Fee schedules aim to establish a benchmark price for services, reducing cost disparities and ensuring a baseline level of reimbursement for physicians. 2. Explain how capitation reimbursement to primary care physicians is expected to reduce the overutilization of care compared to fee-for-service reimbursement. Capitation reimbursement provides a fixed payment to primary care physicians (PCPs) for each patient assigned to them, regardless of the services rendered during a specific period. This approach incentivizes PCPs to manage patient health proactively to prevent illnesses and minimize the need for expensive specialist care or hospitalization. Compared to fee-for-service reimbursement, where PCPs earn more for each service provided, capitation discourages overutilization of services. PCPs have a financial stake in keeping patients healthy, leading to more preventive care and potentially reducing unnecessary tests, referrals, and procedures. 3. In many instances, uninsured patients pay higher prices than other groups   because they do not benefit from negotiated reductions in fees for those with managed-care policies or the lower prices paid by Medicaid and Medicare. Explain whether this is consistent with price discrimination theory. The higher prices charged to uninsured patients compared to insured patients with negotiated rates or government programs like Medicaid and Medicare is consistent with price discrimination theory. Price discrimination occurs when a seller charges different prices to different customers for the same good or service. In healthcare, the basis for this discrimination is insurance status. Uninsured patients lack the bargaining power of large insurance companies and government programs, making them more vulnerable to higher charges. This can be seen as unfair, as it creates a situation where patients needing care are penalized for not having insurance. 4. Explain how the shift from per diem to RCCAC hospital reimbursement prevented hospitals from simply raising charges to enhance profitability. Previously, per diem reimbursement paid hospitals a fixed daily rate for each patient
stay, regardless of the services provided. This system incentivized hospitals to keep patients admitted for longer durations, potentially leading to unnecessary utilization of resources. RCCAC (Relative Cost Classification System) introduced a more complex reimbursement scheme that considered factors like diagnosis and severity of illness. This approach aimed to provide hospitals with a fairer reimbursement based on the actual care provided, reducing the incentive to prolong hospital stays solely to increase revenue. 5. Explain how the shift from RCCAC to DRG hospital reimbursement resulted in reduced utilization of hospital services. The shift from RCC to DRG reimbursement further refined the approach to control hospital costs and utilization. DRGs categorize patients into even more specific groups based on diagnosis, procedures performed, and severity of illness. Each DRG has a fixed reimbursement amount. This system incentivizes hospitals to discharge patients as soon as medically appropriate, as longer stays do not translate to higher revenue. By focusing on efficiency and cost-effectiveness, DRGs can lead to reduced lengths of stay and potentially lower overall healthcare costs. However, this system can also create pressure to discharge patients prematurely, raising concerns about patient safety and quality of care.
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