Variability Of Funding In Healthcare Essay

Our Healthcare system is clearly business based according to the article “Cost Conundrum” and on the movie “Escape Fire”. In the movie it had an impacting story of an older lady who had heart problems where she went to a doctor and they were going to charge her thousands of dollars were later she went to a different doctor and they charged her a couple hundred dollars for t he same procedure. I couldn’t believe that in a different office she would get the same procedure done for a lot cheaper than in the other doctor’s office. Also, it surprised me how the medical staff are giving all these medications to our soldiers were they are clearly

This model reimburses hospitals based on quality of care instead of the volume of patients. The quality of care is assessed by patient questionnaires and if hospitals are unsatisfactory penalties may be imposed (Edwoldt, 2012). The value-based system also affects Medicare and Medicaid. It was reported that Medicare readmissions within 30 days of discharge cost 17 billion dollars annually (Edwoldt, 2012). Due to the high costs of readmissions Medicare and Medicaid have implemented a Hospital Readmission Reduction program. A formula is utilized to evaluate readmission rates within 30 days of discharge for any medical reason related to their original admission such as heart failure and pneumonia. Upon review the hospital is potentially penalized. It is important that nurses strive to provide excellence in care despite their beliefs on the ACA. Nurses have the ability to provide a safe patient environment and reduce the risk of hospital associated infections by following hospital protocols such as hand washing.

The reimbursement method used at St. Anthony’s hospital is quite distinct depending on the party doing the payments. Payments are received from Medicare, Medicaid, private insurers and also directly from patients. The party responsible for Medicare payment is the Federal government and it offers payment mainly for the elderly. With the Medicare payment, hospitals receive a flat fee depending on the case. According to Gee (2006), most hospital revenue has declined because of the revised payment set by the Diagnosis-Related Groupings. The fee for most cases varies according to the Diagnosis-Related Group (DRG) it can be classified under. For example, Medicare pays only a fixed amount for an elderly patient suffering from pneumonia regardless

In the past several years, there have been several changes in economic policy at federal and state levels. The two economic policies that present to be the most precedent for healthcare leaders with concern to facility reimbursement are the Affordable Care Act (ACA) and the switch from volume to value reimbursement. First, there is the ACA policy, which have affected healthcare facilities and their reimbursement methods. In fact, ever since this policy was implemented, provider reimbursement has started to decrease in terms of fee-for-service payments (The Common-Wealth Fund, 2015). In other words, the intention of this policy was to provide budget relief to the government payers as well as giving providers an incentive to provider patients with great quality of care.

Healthcare reimbursement systems within the United States are a complex structure for obtaining payment for services rendered. The healthcare system officers are required to understand the ordinary principles of the payer system. Understanding the rules, and keeping up with the continuous changes will allow the providers, physicians, and facilities to gain an advantage in this growing healthcare domain. Both private and commercial insurance companies provide a diverse menu of choices to customers. All third-party payers create interest in decreasing healthcare costs and improve control access to the not needed services. This paper will address the complexity of the healthcare reimbursement systems in the United States. Additionally, the research

In 1983, the Medicare prospective payment program was implemented which allowed hospitals to be reimbursed a set payment based on the patient’s diagnosis, or Diagnosis Related Groups (DRG), regardless of what treatment was provided or how long the patient was hospitalized (Jacob & Cherry, 2007). To keep the costs below the diagnosis related payment, hospitals had to manage efficiently the treatment provided to a client and reduce the client’s length of stay (Jacob & Cherry, 2007). Case management, or internal case management “within the walls” of the health care facilities was created to streamline costs while maintaining quality care (Jacob & Cherry, 2007).

By definition, a MS-DRG is “a system of classifying a Medicare patient’s hospital stay into various groups in order to facilitate payment of services.1” The DRG system was created through Yale University’s Schools of Management and Public Health1. The system organizes potential human disease diagnoses into more than 20 body systems1, and then further organizes the body systems into over 450 subgroups. This organization helps to “classify the care that hospitals provide.1” The way this system works specifies which body system and groups are affected with the amount of hospital resources required to treat each condition. The ending result is a fixed rate for patient services, call

Reimbursement is the blood of any healthcare facility. The rates of reimbursement are varied based on insurance payers, location, and other factors. Medicare is the biggest insurance payers in the healthcare industry. The Medicare reimbursements for providers are based on providers’ work, practice expenses, and professional liability. A relative value unit (RVU) is assigned to each of the three factors, which calculates the workload or expended efforts in caring for patients by providers.

There are two core design characteristics associated with DRG based payments; “an exhaustive patient case classification system (i.e. the system of diagnosis-related groupings) and the payment formula, which is based on the base rate multiplied by a relative cost weight specific for each DRG”(Mathauer &Wittenbecher, 2013). These values can be set for the components and the potential effect as policy levers as they are evaluated. “Importantly, the qualitative and quantitative effect of a DRG-based payment system is also contingent upon the payment mechanism that is replaced”(Mathauer &Wittenbecher, 2013).

Develop payment strategies to reduce unwarranted price variation, such as reference or value pricing (e.g., analysis of price variation among network providers by procedure and service types, pilot value pricing programs,

In addition to the different prospective payment systems, diagnosis-related groups monitor quality of care and the uses of services in a hospital. Diagnosis-related groups are an “inpatient classification that categorizes patients who are similar in terms of diagnoses and treatment, age, resources used, and lengths of stay.” Diagnosis-related groups are important to how much reimbursement a healthcare

Understanding the classification of healthcare services in terms of acute and long term care enable us to plan for services, to describe institutions, and to allocate funding and reimbursement. In the United States, healthcare services provided by health care providers (such as doctors and hospitals) are paid for by the following including, private insurance, Government insurance programs, people themselves (personal, out-of-pocket funds). Additionally, the government directly provides some health care in government hospitals and clinics staffed by government employees. Examples are the Veteran’s Health Administration and the Indian Health Service.

Financial management is important to the organization because it provides pertinent finance and accounting information to help managers accomplish the purpose of the organization. Financial accounting provides accounting information to external users. On the other hand, managerial accounting is more for managers (internal users) to use for things like planning, budgeting, etc. The definition of finance has changed over the years, but it’s used to ultimately evaluate previous decisions and make assessments for future decisions of the organization.

Government financed health care typically has more control to place limitations on care offered to patients and doctors in order to keep costs down. Since payers must try to deliver the most care for the

The realization of such services should be supported with adequate funding. Again, the stakeholders of the organization should be the major contributors towards the long term care service provision funding. The continuum care is crucial in the sense that it ensures that the care of the patients continues amid all the challenges and at all times. In case of financial challenges, the government ought to lend a helping hand to assist fund the important services (Pratt, 2010). Other private organizations with keen interest in healthcare provision