Recommended
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Financing Healthcare (Part 1) Lecture C
Similar to Financing Healthcare (Part 1) Lecture C (20)
More from CMDLearning
More from CMDLearning (20)
Recently uploaded
Recently uploaded (20)
Financing Healthcare (Part 1) Lecture C
- 1. Introduction to Health Care and Public Health in the U.S. Financing Health Care, Part 1 Lecture c This material (Comp 1 Unit 4) was developed by Oregon Health & Science University, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology under Award Number 90WT0001. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/4.0/.
- 2. Financing Health Care, Part 1 Learning Objectives - 1 • Describe the history and role of the health insurance industry in financing health care in the United States, and federal laws that have influenced the development of the industry. (Lecture a) • Explain the importance of the health care industry in the U.S. economy and the role of financial management in health care. (Lecture b) 2
- 3. Financing Health Care, Part 1 Learning Objectives - 2 • Describe models of health care financing in the U.S. and in selected other countries. (Lecture c) • Explain the differences among various types of private health insurance and describe the organization and structure of network-based managed care health insurance programs. (Lecture d) 3
- 4. Financing Health Care, Part 1 Learning Objectives - 3 • Describe the various roles played by government as policy maker, payor, provider, and regulator of health care. (Lecture d) • Describe the organization and function of Medicare and Medicaid. (Lecture e) 4
- 5. Health Care in Other Countries • Benefits/drawbacks of two public (tax- funded) health care plans • Compare a multi-payor health care system with a single-payor system • The role of private health insurance in each system 5
- 6. Types of Health Care Systems • Mixed Delivery System – Primarily private health care organizations and providers – Government operated system o Affordable Care Act (ACA) o Veterans Health Administration o Military Health System o Indian Health Service 6
- 7. Single vs. Multi-Payor Systems • United Kingdom – Public payor o Public funded o Provides basic services – Private payor o Employer plans • Canada – Single public payor in each province or territory – Limited or no private payor 7
- 8. Public Health Care in the United Kingdom and Canada • United Kingdom: National Health Service – Department of Health funds 5 regional health care plans throughout the country • Canada: MEDICARE – Provincial/Territorial Single Payor – Medicare funds provinces and territories, which run their own health plans 8
- 9. Five Single-Payor Systems in the United Kingdom • The U.K. Department of Health: – Funds the National Health Service (NHS) – Ten regional health authorities – Primary Care Trusts (PCTs) o Salary o Fee-for-service o Capitation 9
- 10. How the NHS Began • 1946 National Health Service Act passed – Authorized NHS – Began covering medical services July 1948 • Goal - Provide free health care for all citizens • Ambitious and controversial project – Health minister Aneurin Bevan – 90% of British doctors joined 10
- 11. NHS Governance & Responsibilities • The Department of Health – Administers and provides funds – Responsible for NHS o Public o Parliament – Improving public health o Environmental health hazards o Medication safety o National policies o Health education 11
- 12. NHS Expenditures and Funding • Expenditures – Per capita spending (2013) $3,595 • Financing – National taxes (76%) – Payroll taxes (18%) – Other sources (6%) o NHS patients o Private patients o Other 12
- 13. What the NHS Provides • Universal coverage for all U.K. residents • Primary care, specialists, hospital care, long-term care, and preventive care • Mental health, rehabilitation, dental, and eye care 13
- 14. NHS Patient Fees • Services free until the early 1950s • 2007 out-of-pocket average cost – U.K. $343 in U.S. dollars – U.S. $890 in U.S. dollars • Help keep health care affordable: – Fixed rate for prescriptions – Fee exemptions – Caps on cost of dental procedures 14
- 15. U.K. Private Health Insurance • 12% of population – Employer sponsored – Self-pay for private insurance • Provides more choices and shorter wait lists – NHS or private hospitals • NHS working to reduce wait times – Hospital specialist : 18 weeks or less 15
- 16. Post-2010 NHS Reform • Health services determined locally, not centrally – Groups of local general practitioners, specialists, nurses, and consumer advocates • Requirements: – Provide urgent and emergency care – Address health and social needs of all users – Protect patients’ interests, quality, and efficiency through outcomes 16
- 17. The Canadian Health Care System (MEDICARE) • Similar to the NHS – Taxpayer-funded – Universal coverage • Different from the NHS – Nationwide and regional funding – Federal government cannot run regional health care plans – Limitations on private health insurance 17
- 18. Financing Canada’s Health Care • Canada Health Act 1984 – Increased access – Lowered individual costs – Defined medically necessary services • Financing – Federal income tax distributed to provinces and territories – Province/territory fund a portion 18
- 19. Hospital & Provider Dichotomy • Hospitals – Most hospitals public institutions • Providers – Most providers in private practice – Paid fee-for-service 19
- 20. Five Principles of the Canada Health Act • Public administration • Comprehensiveness • Universality • Portability • Accessibility 20
- 21. Public Administration and Comprehensiveness • First two principles explain how plans are administered – Public administration: o Publicly administered o Non-profit organizations o Accountable to the public – Comprehensiveness: o Must provide all medically necessary services o Each province or territory decides what is medically necessary 21
- 22. Universality, Portability, and Accessibility • The last three principles protect patient rights – Universality o Right to health care – Portability o Provides coverage between regions or travels outside of Canada – Accessibility o Provided regardless of health, age, or income 22
- 23. MEDICARE Coverage in Canada • Medically necessary services – Medical and surgical care – Preventive care – Hospitalization due to illness or injury – Medical Equipment – Dental surgery • Extended health care services – No requirement for coverage – Many areas provide some coverage – Average $580 per year out-of-pocket 23
- 24. The Role of Private Insurance • Private insurance – Available through employers or purchase – Supplement for non-covered Medicare services – Prohibited from paying for medically necessary services • Private insurance payments – 30% of Canada’s total health care expenditures 24
- 25. Limiting Private Insurance • Effects include: – Does not improve access to basic services already covered by MEDICARE – Increases the public cost of universal coverage • Some want to expand the role of private insurance to solve these problems • Others want to continue restriction to ensure equal access for all 25
- 26. Public Health Benefits of the Canadian System • Statistics show Canadians benefit from good health care • Life expectancy – 80 years as of 2005 – Among highest in industrialized nations • Infant mortality cut in half from 1979 to 2005 26
- 27. Financing Health Care, Part 1 Summary – 1 – Lecture c • Health plans in the United Kingdom and Canada reflect different national priorities – Both have tax-funded universal coverage • United Kingdom NHS – Centrally administered and funded – Services at government operated facilities – Providers employees of NHS – Private insurance allows for additional access and choice 27
- 28. Financing Health Care, Part 1 Summary – 2 – Lecture c • Canada MEDICARE – Services at government facilities by private providers – Private health insurance limited to provide equal access • Challenge of wait times – UK permits private insurance – Canada does not 28
- 29. Financing Health Care, Part 1 References – 1 – Lecture c References British Broadcasting Corporation. Birth of the National Health Service: the early history of the NHS. http://www.bbc.co.uk/archive/nhs. Accessed January 23, 2017. British Broadcasting Corporation. The NHS at 50: making Britain better. http://news.bbc.co.uk/2/hi/events/nhs_at_50/special_report/119803.stm. July 1, 1998. Accessed January 23, 2017. Canadian Health Care. www.canadian-healthcare.org. Accessed January 23, 2017. Citizens Advice Bureau [United Kingdom]. National insurance—contributions and benefits. http://www.adviceguide.org.uk/index/life/benefits/national_insurance_contributions_an d_benefits.htm. Accessed January 23, 2017. Citizenship and Immigration Canada. Health care in Canada. http://www.cic.gc.ca/english/newcomers/after-health.asp. Accessed January 23, 2017. 29
- 30. Financing Health Care, Part 1 References – 2 – Lecture c References Commonwealth Fund. 2015 International profiles of health care systems. http://www.commonwealthfund.org/~/media/files/publications/fund- report/2016/jan/1857_mossialos_intl_profiles_2015_v7.pdf. Accessed January 23, 2017. Department of Health [United Kingdom]. History of the department. http://webarchive.nationalarchives.gov.uk/+/www.dh.gov.uk/en/Aboutus/HowDHworks /DH_074813. Updated May 23, 2007. Accessed January 23, 2017. Department of Health [United Kingdom ]. About us. https://www.gov.uk/government/organisations/department-of-health/about. Accessed January 23, 2017. Health Canada. About Health Canada: activities and responsibilities. http://www.hc- sc.gc.ca/ahc-asc/activit/index-eng.php. Updated May 3, 2008. Accessed January 23, 2017. Madore O. The Canada Health Act: overview and options. Library of Parliament, Parliamentary Information and Research Services. http://www2.parl.gc.ca/content/lop/researchpublications/944-e.htm. Updated May 16, 2005. Accessed January 23, 2017. 30
- 31. Financing Health Care, Part 1 References – 3 – Lecture c References National Health Service. Help with health costs. http://www.nhs.uk/NHSEngland/Healthcosts/Pages/Abouthealthcosts.aspx. Updated. January 15, 2015. Accessed January 23, 2017. National Health Service. Care equipment, aids and adaptations http://www.nhs.uk/conditions/social-care-and-support-guide/pages/equipment-aids- adaptations.aspx. Accessed January 23, 2017. National Health Service. NHS history. Updated July 5, 2007. http://www.nhs.uk/NHSEngland/thenhs/nhshistory/Pages/NHShistory1948.aspx. Accessed January 23, 2017. National Health Service. What is NHS continuing healthcare? http://www.nhs.uk/chq/Pages/2392.aspx?CategoryID=155&SubCategoryID=155. Updated April 29, 2015. Accessed January 23, 2017. 31
- 32. Financing Health Care, Part 1 References – 4 – Lecture c References National Health Service. Encyclopaedia Britannica. https://www.britannica.com/topic/National-Health-Service. Accessed January 23, 2017. NationTalk. Canada’s new government announces patient wait times guarantees with all the provinces and territories. http://nationtalk.ca/story/canadas-new-government- announces-patient-wait-times-guarantees-with-all-the-provinces-and-territories. April 4, 2007. Accessed January 23, 2017. Steinbrook R. Private health care in Canada. N Engl J Med. 2006;354:1661-1664. 32
- 33. Introduction to Health Care and Public Health in the U.S. Financing Health Care, Part 1 Lecture c This material was developed by Oregon Health & Science University, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology under Award Number 90WT0001. 33
Editor's Notes
- Welcome to Introduction to Health Care and Public Health in the U.S.: Financing Health Care, Part 1. This is lecture c. This component, Introduction to Health Care and Public Health in the U.S., is a survey of how health care and public health are organized and how services are delivered in the U.S. It covers public policy, relevant organizations and their interrelationships, professional roles, legal and regulatory issues, and payment systems. It also addresses health reform initiatives in the U.S.
- The objectives for Financing Health Care, Part 1 are to: Describe the history and role of the health insurance industry in financing health care in the United States, including federal laws that have influenced the development of the industry Explain the importance of the health care industry to the U.S. economy and the role of financial management in health care
- Describe models of health care financing in the U.S. and in selected other countries Explain the differences among various types of private health insurance and describe the organization and structure of network-based managed care health insurance programs.
- Describe the various roles played by government as policy maker, payor, provider, and regulator of health care. And describe the organization and function of Medicare and Medicaid
- This lecture explores how the health care systems in the United Kingdom and Canada are structured, discusses the benefits and drawbacks of these two primarily public-funded health care systems, and compares the multi-payor system of the United Kingdom with the single payor system of Canada. It also discusses the role of private insurance in each of these tax-funded systems.
- Many countries provide government-paid basic health care services for their residents. These services are usually funded by general taxes, payroll taxes, or a combination of both. How this publically funded health care is structured and delivered varies from country to country. Privately purchased health insurance may also play a role in these public health care systems. As mentioned in lecture b, the U.S. health care system is a mixed model of private health care organizations and government-operated systems.
- Other countries also operate mixed delivery systems. Two of these are the United Kingdom and Canada; however, the methods that these countries employ to deliver and finance health care services is quite different from how it is done in the U.S. Both the United Kingdom and Canada fund basic health care, primarily through general taxation. However, the United Kingdom has a multi-payor system that includes private payors, while Canada has a single-payor in each province and territory, and relies little on a private system.
- In the United Kingdom, health care is centrally administered by the Department of Health. The Department distributes funds to single-payor systems in five regions of the country. With some exceptions that will be discussed later, health care services are primarily provided at government facilities by government employed providers. It is the prototypical socialized medicine model. In Canada, the federal Health Canada department administers a program called Medicare, in all capital letters, which distributes funds to provinces and territories. These regions are similar to states in the U.S. The provinces and territories use the federal funds, along with regional funds to administer their own provincial or territorial health care plans. Each plan must meet certain national standards and services vary by province and territory.
- The single-payor system of the United Kingdom’s Department of Health funds the National Health Service, or NHS, in five regions of the country: England, Northern Ireland, Scotland, Wales, and the Isle of Man. The health plan in England is called the NHS. The health plan in Northern Ireland is called the NHS Northern Ireland, the health plan in Scotland is called the NHS Scotland, and so on. Ten regional health authorities run the NHS and distribute funds through primary care trusts, or PCTs. Primary care trusts maintain contracts with health care providers and hospitals in each NHS region. Health care providers and hospitals are paid through the primary care trusts. The primary care trusts pay health care providers in a variety of ways. Some providers receive a salary and some receive a fee-for-service. Some are paid through capitation, which means they are paid a fixed fee for each patient in their practice.
- In 1946, the British Parliament, the legislative body in the UK, passed the National Health Service Act, which authorized the NHS. This Act was part of a group of laws designed to strengthen the social safety net for British citizens after World War II. The NHS began covering medical services in July of 1948. The goal of the NHS was to provide free, tax-funded health care to all British citizens, regardless of their income. Before the NHS was established, many British residents could not afford to go to a doctor. The NHS was an ambitious and controversial project. There was stiff opposition to it from the British Medical Association, which represented Britain’s doctors. The Association was afraid that doctors would lose their independence and earn less money if they left private practice to work for the NHS. To persuade doctors to join the NHS, the health minister at the time, Aneurin Bevan, said that if they worked for the NHS, they could also maintain their private practices. He famously said that he was “stuffing their mouths with gold” to convince doctors to join. His approach worked. Ultimately, ninety percent of British doctors joined the NHS by the time it began providing services.
- The United Kingdom’s Department of Health administers and provides tax money to the NHS. The Department of Health is accountable to both the public and to the government for the performance of the NHS. The Department of Health is also responsible for improving public health through other programs, such as protecting people from environmental health hazards and ensuring medication safety. The department sets national health policies and helps to develop and deliver services such as health education.
- In 2013, the most recent year for which data is available, the per capita spending by the NHS was $3,595, which was thirty nine percent of the $9,255 per capita spending in the U.S. In 2013, national taxes funded seventy six percent of the NHS budget. A payroll tax, called National Insurance, paid for another eighteen percent. The remaining six percent of the NHS budget came from fees paid for access to NHS services by private insurance patients, fees paid out-of-pocket by NHS patients, and other sources, such as philanthropy.
- Today, every person who lives in the United Kingdom can receive health care through the NHS. This is called universal health care coverage. The NHS pays for a patient’s primary care with a general practitioner, also called a GP, who refers patients to specialists as needed. Hospital care, specialist care, and preventive care such as vaccinations and cancer screenings are covered. The NHS also pays for other health care such as mental health care, rehabilitation, dental care, and long-term care. Eye care is covered for children, full-time students, elderly and low-income patients, and people with diseases that affect the eyes, such as glaucoma.
- All NHS services were free until the early 1950s, when the NHS began charging some fees for prescriptions and dental work. Today, cash payments made by NHS patients are modest. In 2007, the average citizen paid the equivalent of 343 U.S. dollars out-of-pocket for health care expenses. By comparison, in that year the average U.S. citizen paid 890 dollars. NHS patients now pay a fixed rate for prescriptions, but there are fee exemptions for certain populations, such as cancer patients, low-income patients, and children. Dental costs are capped by procedure.
- Although the publically funded NHS provides a wide range of health care services, about twelve percent of residents either have employer insurance or they pay for private health insurance. The most common reasons are to expand their choices of doctors and health care facilities, and to reduce wait times for non-urgent medical care. Private insurance provides patients access to both NHS and private hospitals. Greater access to care decreases the wait time to see specialists or to obtain medical procedures at NHS facilities. The NHS is currently working to reduce wait times within its system. The goal is to reduce wait times for hospital specialist visits to eighteen weeks or less.
- After the 2010 general election in the United Kingdom, the new government proposed to decentralize the financial and managerial duties from the regional and local health authorities and transfer them to local control by general and specialist physician groups, nurses, and consumer, or lay, representatives. This was based on the notion that general practitioners and specialist groups are more familiar with the needs of the patient population of a particular area. Each of these groups would determine which medical services to provide for the population it represented. The local groups must continue to provide for the urgent and emergency needs of the population and address ongoing health and social needs, and ensure patients’ interests are protected through monitoring quality and efficiency outcomes.
- Like the United Kingdom, Canada provides taxpayer-funded, universal health care coverage for its citizens and permanent residents. As mentioned earlier, Canada's national health insurance program is often referred to as "MEDICARE”, in all capital letters. But unlike the United Kingdom, the Canadian Constitution states that the federal government cannot run regional health care plans. As a result, each of Canada’s ten provinces and three territories runs its own health care plan. Funding for these multiple single-payor plans comes primarily from the federal government, but regional governments also contribute to the costs. Canadian public health care has more variety between regions than the public health care plan in the United Kingdom. The Canadian plan also has some unique limitations on what private health insurance covers.
- The modern health care system in Canada began in April of 1984 with the passage of the Canada Health Act. This Act updated earlier laws from 1957 and 1966 that had helped fund health care in Canada. The Canada Health Act passed in 1984 was designed to increase access to and limit costs for health care. It set national health care criteria, such as universal access to government-paid medically necessary services for everyone. Provinces and territories are required to follow specific guidelines. Today, provinces and territories receive income tax money from the federal government to pay for approximately half of their health care expenditures. The amount of federal money each region receives depends on its population, with low population provinces receiving additional federal funds. The provinces and territories must provide the balance of the financing for necessary services. Some provinces and territories supplement health care funding through sources such as lotteries, sales taxes, or health care premiums. Patients who cannot afford the premiums still have the right to receive health care. The Canada Health Act uses public funds to pay health care providers who generally are in private practice.
- There is a dichotomy between institutions and organizations, and providers in the Canadian system when compared to the NHS in the UK. Most hospitals in Canada are public institutions funded through the provincial or territorial health programs. At the same time, the Canada Health Act uses public funds to pay health care providers, who are mostly in private practice on a fee-for-service basis.
- The Canada Health Act of 1984 includes five principles that govern provinces and territories if they want to receive federal funding for their health care plans. These principles are public administration, comprehensiveness, universality, portability, and accessibility.
- The first two principles explain how a health plan must be administered by the province or territory. The public administration principle states that a public authority must administer the health plan in each province or territory. This authority must run the health plan as a nonprofit organization, and its accounts can be publicly audited. This principle prevents provinces or territories from giving public funds to residents to pay for private, for-profit insurance. The comprehensiveness principle states that all medically necessary services must be covered by the health plan. Provinces and territories have the freedom to determine which services are medically necessary and which are not.
- The last three principles explain the rights of patients within the health care plan. The universality principle states that all Canadian residents should receive the same level of care within their province or territory. The portability principle states that residents must receive health care coverage if they travel outside of Canada or if they move from one province or territory to another. This principle also ensures coverage during the brief waiting period to join a health plan when residents move between provinces and territories. The accessibility principle states that every resident must have access to health care, regardless of their health, age, or income. Health care providers must also be adequately paid for their services.
- Canada’s provincial and territorial health care plans must pay for services considered medically necessary. These include preventive care, hospital stays due to illness or injury, medical equipment, and dental surgery. The Canada Health Act does not require that provinces and territories pay for so-called extended health care services, which means services not considered medically necessary. These services can include prescriptions, eye care, and routine dental care. Most provinces and territories choose to fully or partially cover some of these services, although coverage options vary by region. On average, each Canadian spends 580 dollars per year on out-of-pocket health care expenses not covered by MEDICARE.
- About two thirds of Canadians purchase private insurance to supplement MEDICARE services. Often, employers offer private insurance as a benefit. Private insurers in Canada cannot legally pay for services already covered by MEDICARE, which makes Canada unique among other nations that provide publically-funded health care. The Canada Health Act limits private insurers in order to keep the system equitable for all. Private health insurance provides approximately thirty percent of Canadian health care expenditures. The other seventy percent comes from public funds.
- Limiting private insurance has two primary effects. First, patients cannot purchase private insurance to improve their access to basic medical services covered by MEDICARE. Second, limiting the ability of some people to opt out of public health care increases the public cost of universal care. Some Canadians would like private insurance to play a greater role in Canadian health care. Others want to continue to restrict the role of private insurers in order to ensure that everyone has equal access to basic medical care, regardless of income.
- Despite its drawbacks, the Canada Health Act has contributed to public health achievements in Canada. Life expectancy and infant mortality are two measures often used to compare the effectiveness of health care in different countries. Life expectancy at birth was more than eighty years in 2005, among the highest life expectancy in the Group of Seven countries, which are France, Italy, Germany, Japan, the U.S., the United Kingdom, and Canada. Canadian infant mortality was cut in half from 1979 to 2005.
- This concludes lecture c of Financing Health Care, Part 1. In summary, the public health plans in the United Kingdom and in Canada reflect the different social and political priorities of each country. Both the United Kingdom and Canada provide public health care coverage for their residents, funded primarily by taxes. The United Kingdom’s multi-payor system is centrally funded and administered. The United Kingdom lets residents purchase private insurance to have greater choice and faster access to many health care services.
- Canada’s single payor systems are funded through federal and provincial taxes. Provinces and territories administer their own health care plans, as long as they follow certain nationwide rules. Canada is concerned about providing equal access to all residents, and permits residents to purchase private insurance only for services that the public plan does not cover. Both countries have worked to reduce long wait times for medical services in their public plans.
- References slide. No audio.
- References slide. No audio.
- References slide. No audio.
- References slide. No audio.
- No audio