Fall 2013

Gross

domestic product (GDP) is the broadest

measure of the health of the US economy.
Real GDP: output of goods and services
produced by labor and property located in
the United States

 Unnecessary

care
Consumer attitudes
Healthcare financing

 Pharmaceutical

usage
Changing population demographics
Disease patterns

 Health

disparities based on gender, race, and

socioeconomic status continue.
US infant mortality is among the highest in
the world.
US life expectancy is lower than in many
other developed countries.

 Four

sources

Government (45%)
Private insurance companies (35.9%)
Individuals (15%)
Other (4%)

 Enacted

1965
Federal funding and control
Not means-tested (income not considered)

 Medicare

split into Part A: hospital benefits

Part B covers professional and outpatient
services
Part C: Managed care
Part D: Prescription drug benefit

 Fees

paid strictly controlled in 1965 plan

But new technology not foreseen
People are living longer
Burgeoning costs led to a series of cost
control efforts

 Enacted

1982
Prospective payment system
Payment per case
Diagnosis-related groups

 Potential

for legal gaming of the system

DRG creep to higher-level diagnoses
Some suggest DRGs should have been based
on severity, not diagnosis

State level program

Medically indigent, blind, or disabled
Children with disabilities
50% to 83% paid by federal government

 Enacted

1965
Federal and state funding
Administered by the states
Covers the poor
Means tested

 Largest

groups covered are women and

children
But largest expenditures are for aged and
disabled

 Also

the target of cost control efforts

Waivers and demonstration projects provided
for state experimentation
Goal was to cover more of a states
population

 Four

major methods

Charges (retrospective)
Cost-based reimbursement (retrospective)
Flat-rate reimbursement (prospective)
Capitated payments

Managed care is a health plan that brings together

the delivery and financing function into one
entity. The goal is to decrease unnecessary
services, thereby decreasing costs.

Military health plan

Serves:
Active duty personnel and family
Survivors of military personnel
Retired military personnel

Provides healthcare services

to former military personnel

 Private

Individual insurance plan, the insured pays the total

amount of the monthly premium

Group

Insurance

insurance plan

the insured individual and their employer share the

amount of the monthly premium

Health Maintenance Organizations

care is directed toward prevention of disease

patient must see only HMO approved providers
pay a monthly fee, no additional charge for care
care from non-HMO provider generally not covered

Preferred Provider Organization (PPO)

Group of doctors and/or hospitals that provide care to a

specific group
PPO provides services to the insured at a reduced rate
Usually require a deductible and a co-pay
Less coverage for treatment provided by non-PPO
provider

Indemnity Plan

Traditional plan with freedom to visit

physician of choice
No referral required by insurance company
Pay up front
Get reimbursed amount allowed by insurance
policy; amounts may vary

 We

must think of our practice within a

context of organizational viability and quality
of care.
We must be able to do financial thinking.
We must think of our services in terms of
value added for patients.
We must exercise cost-conscious nursing
practices, including capturing all costs.

 We

must focus on patient needs, not provider

needs or organizational practices.
We must provide evidence-based practices
for the public we serve.
We must incorporate and evaluate new
technologies.
We must use research to better our
practices.

 Accreditation and reimbursement agencies

require accurate and thorough documentation of

the nursing care rendered and the clients
response to interventions.

 Strand,

J., & Castillo, P. Reimbursement 101.

Retrieved August 23, 2013, from
http://www.paeaonline.org/Project04/PM/h
tml/reimbursement/remPPT.htm.
Yoder-Wise, P. S. (2010). Leadership and
Managing in Nursing, 5th Edition, Mosby
Elsevier.