SU_NSG6605_W2_A2_Sornoza_S

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South University, Savannah *

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6605

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Health Science

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Jan 9, 2024

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docx

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1 Week 2 Mid-Week Project Sharon Sornoza South University NSG6605 Quality Outcomes and Financial Management in Healthcare Organizations CP01 Dr. Linda Robinson December 8, 2023
2 Week 2 Mid-Week Project Multiple payment systems finance healthcare services in the United States (U.S.). Approximately half of the services received are paid for by government programs and taxation, and the other half is paid for by insurance companies and individuals (Finkler et al., 2018, p. 47). Healthcare spending is projected to grow 1.1% higher than the gross domestic product (GDP) yearly (Tulchinsky & Varavikova, 2014, p. 809). The major cost drivers, aside from increased costs of pharmaceuticals, are: Fee-for-service reimbursement o Providers get paid for every test, procedure, or service they perform. Physician, facility, and drug costs o U.S. hospitals are more resource-intensive than in other developed countries. o Pharmaceutical companies are developing “specialty” drugs that cost significantly more per treatment than before. Fragmentation and lack of care coordination in the delivery system o How often has a patient said to you, “I just had (this test/procedure) done last week”? The reply usually given to the patient is that because it was done at the “X” facility, you don’t have access to those records. Therefore, it must be repeated since it would be faster than waiting for medical records to send the results. o Preventable hospital readmissions due to lack of post-acute care High administrative burden on providers, payers, and patients o Approximately 26% of hospital spending is from administrative costs. Billing and insurance-related costs Changing demographics, lifestyle choices, and the right of chronic conditions
3 o Prevalence of chronic illnesses: the top 10 causes of death were chronic diseases, with heart disease and cancer together accounting for nearly 46% of all deaths (Finkler et al., 2018, p. 49). Reimbursement options Approaches to funding healthcare were developed—programs such as Managed Care Organizations, hospital value-based purchasing, episode-of-care payments, public insurance, and philanthropic donations.  Private insurance companies, to prevent overuse of health care treatments, have made it mandatory for patients to meet deductibles before the insurance is 100% responsible for the bill, requiring co-payments at the time of service and having restrictions on amounts of reimbursable claims. The most common options to reimburse providers for their services are public insurance, private insurance, and out-of-pocket payments. Public insurance plans are managed through federal, state, and local governments. These plans include Medicare, Medicaid, and The Children’s Health Insurance Program (CHIP) (Finkler et al., 2018, p. 54). Medicare is provided to persons aged 65 years and older, individuals with specific disabilities younger than the age of 65 years, and individuals of all ages with end-stage renal disease (Finkler et al., 2018, p. 55). Medicare pays for hospital, hospice, and some home health care (Finkler et al., 2018, p. 55). Medicaid and CHIP programs provide healthcare coverage for medically needy individuals such as children, poverty-level families, and senior citizens. Unlike Medicare, Medicaid, and CHIP are optional for states to participate in providing this type of coverage to their citizens. Out-of-pocket payments include the amount paid for services not covered by insurance (neither public nor private) and the number of copayments, deductibles, and payments covered
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