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- 1. Health Care Reform Project Part II HCS/ 440 - Economics: The Financing of Health Care
- 2. Introduction Rising healthcare costs and expenditures have become a growing concern in the United States. This concern has become even greater due to a rapidly aging population. These rising costs place a burden on our families, our economy and on our health care organizations. Government and State and State funded programs such as Medicare & Medicaid cannot keep up financially therefore, families and individuals are still dealing with limited access to care and coverage. Because of the increasing low reimbursement rates of these programs many physicians are choosing not to accept patients who are covered by them. Every year the United States spends more on healthcare than they do on our National defense. This greatly adds to our Federal Budget deficits. The spending has increased even more as people have begun to live longer and as more people begin to retire. There are more people retiring in this generation than there are people who are working and paying into these programs. Medicare & Medicaid rely on private health care infrastructure therefore, when there are inadequacies or inefficiencies in the private health care services both Medicaid and Medicare are also affected. In order to reduce our healthcare spending while continuing to provide access to everyone we must address the inadequacies or inefficiencies in the healthcare market. The aging population is not temporary. It is a problem that needs to be addressed because it has become a major economic issue for Social Security, Government spending, and Health Care Providers. It has also become a challenge to the aging population because it is becoming increasingly harder for our economy to provide sufficient resources to support the health needs of the elderly. We intend to provide some possible solutions that could help provide more adequate and more efficient healthcare services to our aging population.
- 3. Reconsidering Care Options for the elderly ∙ State and Federal Governments pay for approximately 70% of nursing home costs ∙ Approximately 85% of nursing home residents entire costs are covered by Medicare or Medicaid ∙ Many nursing homes are losing money because of the current system. ∙ Providing medical care to elderly patients in their own home could be very promising both for patients and healthcare systems if they are carefully coordinated and if the correct changes in payment structures are implemented.
- 4. Using Technology to deliver home based care ∙Using Technology to deliver home based care ∙ Can it improve the financial state of our healthcare system?
- 5. Medicare’s current financial state Medicare’s unfunded obligations increased by $2 trillion (The Heritage Network) Low reimbursement How is health care coverage effecting the elderly? How can we improve it? How will improving it help the current economic issues is an aging population?
- 6. The high cost of treating chronic disease in the elderly Alzheimer’s Disease Stroke Diabetes End-Stage Renal Disease Chronic Lung Disease Heart Disease Cancer Cost How can we reduce the cost? Shifting the health care system , will it change the current economic crisis?
- 7. Poor Information Technology Miscommunication between providers How to improve communication between providers and patients Poor communication between providers Interactions between providers and pharmacists
- 8. Lack of Geriatric Care for the Elderly Training and programs More physicians are being trained Medical students being exposed to geriatrics Who will take care of the elderly? Lack of physicians Lack of training and education
- 9. The High cost of prescriptions for the elderly Part D Prescription Coverage The Donut Hole How soon do they meet the Donut hole gap. Ideas to help through this period or coverage?
- 10. The high cost of Fraud , Waste and Abuse Waste and abuse cost taxpayers. OIG Health Care Fraud Schemes. Patients, Physicians, nurses and providers may be involved. Pharmaceutical companies and fraud
- 11. Conclusion The solution that we thought would best reduce the healthcare cost of an aging population could not be limited to just one solution. We decided that the best solutions for reducing the rising cost of healthcare in an aging population would be to educate the aging population on eating healthy and regularly, exercising and taking the medication they have been prescribed on time and the correct portion they are supposed to take. This solution would reduce their chances of ending up with Alzheimer’s disease, Strokes, Diabetes, End-Stage Renal Disease, Chronic Lung Disease, Heart Disease, Cancer, and many other expensive illnesses. However, we also feel that reconsidering care options for the elderly is another very important solution to reducing the high healthcare costs that come with aging. Many changes could be brought to the current care options that would further reduce healthcare costs.
- 12. References: (2007) Lombardi. Health Care Management Chapter 4: Leading and Developing Work Teams. Retrieved from Wiley and Sons American Geriatrics Society (2012) retrieved http://www.americangeriatrics.org/files/documents/Adv_Resources/PayReform_brief4.pdf Baburajan, Rajani (2010) “Remote Monitoring Technology Reduces Elderly Care Costs for Providers: Report” CMS. (2011). National Health Expenditure Data. Centers of Medicare & Medicaid Services. Retrieved from: http://www.cms.gov Daniel R. Levinson Inspector General U.S. Department of Health & Human Services (2011) The United States Senate Committee on Finance. Retrieved from: www.finance.senate.gov Gleckman, Howard (2012) “In your own home” Health Affairs, http://content.healthaffairs.org/content/31/6/1227 James D. Reschovsky, Laurie E. Felland (2009) Access to Prescriptions Drugs for Medicare Beneficiaries, Tracking Report NO 23, Retrieved from http://www.hschange.com/content/1044 Lewis Morris Chief Counsel Office of Inspector General U.S. Department of Health and Human Services (HHS) (2010). Reducing Fraud, Waste, and Abuse in Medicare. Retrieved from: www.hhs.gov/asl/testify/2010 Mattke, Soeren (2010) “Health and Well-Being in the Home” Swarts, Kimberly (2012), The Hastings Center, Healthcare Cost Monitor, http://healthcarecostmonitor.thehastingscenter.org/kimberlyswartz/projected-costs-of-chronic-diseases The Hasting Center, Health Care Cost Monitor, Kimberly Swartz (2012) http://healthcarecostmonitor.thehastingscenter.org/kimberlyswartz/projected-costs-of- chronic-diseases The Heritage network, Medicare’s Deteriorating Financial Condition, http://blog.heritage.org/2011/05/13/medicare%E2%80%99s- deteriorating-financial-condition/ Tracking Reports (2012) Effects of Health Care spending on the U.S. Economy. Retrieved from: http://aspe.hhs.gov/health/costgrowth. Zini, Aldo (2012) “Hospitals Find Robots Deliver Cost Savings & Greater Efficiency”
Editor's Notes
- Pan American Health Organization (2002)” Primary Health Care in the Americas: Conceptual Framework, Experiences, Challenges and perspectives”
- Reconsidering Care Options for the elderly ∙ Will it improve the financial state of our healthcare system? There are currently many types of care options for the elderly. However, the most common of the care options has become nursing homes because many of the elderly are living with chronic disease. Most of the elderly patients who are living in nursing homes are there because of physical or mental needs that require help from skilled nurses or therapists as well as the assistance of the nursing home staff and most of them are over 65 years old. A majority of nursing home patients are considered long – term care patients. In other words, they will never recover nor will they stabilize enough to return to their homes or care for themselves. Many of these patients will pass away while living at a nursing home only to be replaced by another elderly individual waiting for an open bed. The average stay of an individual who stays in a nursing home until he or she passes away is around 2 years. Individuals who reside in a nursing home are charged daily flat rates for private or semi private rooms as well as being charged for services and supplies that they may not even use. Patients are being charged the same amount across the board regardless of their medical care or supervision requirements. The costs of these nursing homes are normally paid for by private pay patients, Medicare or Medicaid. Private pay patients may even be charged a surcharge. Currently State and Federal Governments pay for approximately 70% of nursing home costs, and approximately 85% of the residents entire costs are covered by these programs. Because a majority of patient care is paid for by our States and Government through Medicare and Medicaid, nursing homes structure their delivery system around the Government payment system. Many nursing homes are losing money because of the current system. Inadequate Government payments are the number one reason that so many nursing homes seek bankruptcy protection. Even the nursing homes that are making a profit are not making enough of a profit to improve their infrastructure, hire more or better qualified staff, or purchase technologies that could improve their patient’s quality of care. But what if we could change the way we care for our elderly? What if we reconsidered how we look at care options for our elderly? We need an entire new approach to services provided to care for our elderly. What if rather than building more institutionalized care facilities we expanded our community based models of care? We need to encourage the elderly to remain in their homes as long as possible and make this possible by improving and better integrating home support services. Since many aging individuals end up in nursing homes or other institutionalized care centers because they have one or more chronic illness shouldn’t we provide funding to train home health care providers to manage these conditions for elderly patients in their own home? In order to encourage elderly patients to remain in their own homes as long as possible we must first train home health care workers to provide even those with chronic disease quality health care, we could encourage more people to train as home health care providers by paying them travel time, to be consistent in their training and their auditing, Only face to face assessments should be allowed by law, Care needs to be consistent and providers should be monitored, they should have to follow all privacy, abuse and neglect laws that institutionalized caregivers are required to follow, We would need to make home healthcare more integrated providing caregivers a network of assistance, and we need to be sure that specialized home health training is offered to caregivers to care for dementia patients in their home. Caregivers pay need to reflect their training and their audit results. In the long run providing medical care to elderly patients in their own home could be very promising both for patients and healthcare systems if they are carefully coordinated and if the correct changes in payment structures are implemented. I feel that this solution has now become a financial, medical, staffing and social necessity. Reference: Gleckman, Howard (2012) “In your own home” Image Credit: http://www.bocahomecareservices.com/blog/home-health-care-include/
- Because there is a great shortage of nurses there are simply not enough nurses to provide around the clock care to elderly patients who choose to reside in their homes and to receive a majority of their medical care in their homes. Many of these patients require daily monitoring and that would be very costly if they had to visit a physician’s office for that monitoring. Additionally, many elderly patients live on a fixed income and having a private duty nurse at their home is just not affordable to them. Technology in home based health care could reduce health care costs and cut down on ordinary tasks for health care providers. Now I am not just talking about Technology such as robotic vacuum cleaners that would vacuum floors for those who are unable to do so, I am talking about technology that would actually help health care providers care for individuals in their own home even when they are not present. One of these technologies is already available but has not yet been accepted by many insurance providers including Medicare and Medicaid. That technology is called telehealth. According to Miller-Keane Encyclopedia and Dictionary of Medicine (2003) “Telehealth is the use of electronic information and telecommunications technologies to support long-distance clinical health care, professional health-related education, public health, and health administration.” The advantages of using telehealth for patients who are receiving in home health care is that patients can wear sensors that monitor everything from their vital signs, the number of steps they have taken, to the food that they have eaten and then that information can be transported to health care providers. The transmission of this information to the patient’s healthcare provider can help the provider to offer that patient advice without the individual having to visit the provider or the emergency room. If something were to go wrong with the individual, the provider would receive that information via the transmission and could act immediately. Telehealth can also send reminders to patients making them aware of what medications they are suppose to take and when they are suppose to take them, teach them new ways of living or eating that may be required due to an illness. In other words, it gives patients their own self-management routines. Many times patients simply do not remember what to do or eat, and as a result are frequently hospitalized and cost our healthcare system more. There are many possibilities for technology in home health care that could help the elderly remain in their homes longer while still receiving quality health care. For instance, Robot nurses, drug dispensing robots, robots used in surgeries, personal robots that help paralyzed individuals perform simple tasks, and robots that perform chores and even monitor patients vitals are all soon a great possibly in the healthcare industry. Many of these robots are already in use. One of the largest costs in the healthcare field is labor. If we could reduce that labor by utilizing technology and by reducing unnecessary visits to physicians and hospitals we could provide the elderly quality care in their own homes, reduce labor costs and gain revenue from exports of sophisticated consumer health products. Without the utilization of these advanced technologies, health care facilities will not be able to keep up with the rapidly rising number of aging individuals. We would see short term cost reductions by reducing on site health care providers both in institutions and in home health care and long term cost reductions by reducing by reducing the number of costly visits to physicians, hospitals and emergency rooms. References: Zini, Aldo (2012) “Hospitals Find Robots Deliver Cost Savings & Greater Efficiency” Baburajan, Rajani (2010) “Remote Monitoring Technology Reduces Elderly Care Costs for Providers: Report” Photo Credit: http://www.med3000.com/resources/blog/bid/63090/Information-Technology-in-the-Patient-Centered-Medical-Home
- With the Medicare budget gaining another $2 trillion dollars in debt the system has to make changes or the whole Medicare Trust Fund Part A will be no longer by year 2024 .Over the full 75-year budget window for the entitlements, about 90 percent of the growth of Medicare and Social Security is going to occur by 2035 (The Heritage Network). This is why the government had to implement a new plan, which makes large cut backs on the coverage areas. Health care coverage is a must for the elderly. As we age in life our bodies become more acceptable to diseases, disorders, and conditions. With the new changes in the Medicare and Social Security Funds, it makes it almost impossible to survive. For elderly you are basically cutting back on the income, creating a larger medical expense, and increasing the economy which makes it hard for them to diet properly. There is another factor that our aging population is struggling from, cancer. Cancer is the number one killer, “over 2/3’s of the elderly are affected by this disease” (at Home Personal Care, 2009). Ways to improve are many but not easy. We can make cut backs in Medicaid funding by making a sliding scale co-payment determination. There can also be more limitations to visits and medications. The goal would be to make people work and pay or “contribute” in some shape or form for those who cannot. We need to make healthier lifestyles. This is one of the easies pats to do physically but the hardest to do mentally. We carry the most obese people in the world! Obesity is not just being over weight. It carries many long term health illnesses that can cost thousands in treatment such as; hypertension, diabetes, asthma, high cholesterol, respiratory, and joint damage. There are free programs that provide free medical screening to let you know what's going on inside your body. People need to take this information seriously and make the changes necessary. Making the changes to your diet or exercise can reduce health risk tremendously. This is the goal we all need to strive for. The more we take care of ourselves, the less time we spend in the doctors office, and the less medications we have to buy or take. By first making changes to our life style will automatically decrease the amount of money spend on health care because you will be visiting the provider less frequently. Then we nee to be mindful of our spending in health care just as we are mindful when we buy a house. Make sure that we are choosing the correct form of treatment at the time. I think that making everyone aware and in control of there own medical expenses will force then to look at what is really being spent and they will have to budget there medical expenses just as they do their household expenses. For the elderly this will allow more funding into the budget to keep the budget running. Reference: The Heritage network, Medicare’s Deteriorating Financial Condition, http://blog.heritage.org/2011/05/13/medicare%E2%80%99s-deteriorating-financial-condition/
- The cost for treating chronic diseases range. Below is a broken down list showing an estimate cost per disease. Alzheimer’s Disease: In 2005 Medicare spent an $91 billion treating Alzheimer’s Disease. This number is expected to increase to $189 billion by 2015 and $1 trillion by 2050 Stroke: Strokes have a short and long term cost. For the first thirty days following the stroke it ost an estimate of $13K for mild cases and $20K for severe. However, the lifetime effect that a stroke causes can cost an estimate of $ 140K. Diabetes: With diabetes increase each year, it cost an estimate of $1.4 billion to treat this disease. (Swartz, The Hastings Center, 2012) End-Stage Renal Disease: this disease is a aftermath of diabetes and hypertension. In 2006 Medicare spent an average of $23 billion treating this disease. (Swartz, The Hastings Center, 2012) Chronic Lung Disease: Medicare spent over $8 billion in in respiratory disease not including pneumonia. Heart Disease: this disease has been the leading cause in death for all ages. In 2007 the overall cost for treatment was $164.9 billion and the numbers are increasing each year. (Swartz, The Hastings Center, 2012) Cancer: This is a hard disease to track cost on. The reason being is that each cancer is different and each person is treated different depending on age, health, stage, and medications. Medicare spent an estimate of $7.3 billion dollars on inpatient treatment. However, this does not include chemotherapy which is an outpatient treatment plan. (Swartz, The Hastings Center, 2012) / Ways to reduce cost: As we all know there are some things that are just uncontrollable when it comes to health. However, by changing our lifestyle to a healthier one, is one that we can contribute to. Looking at it from a government stand point, there has to be budget changes to reduce this cost. One way to change the budget is to eliminate certain coverage's from the plan. By making the patient responsible for more treatment will slow down the continuous hole we keep digging in the health care budget. Shifting Health care: By shifting the focus to disease prevention and chronic illness management would be a very beneficial way to help. According to Health Affairs, In a randomized controlled trial of 1,632 elderly patients, length-of-stay was significantly shorter—6.7 days per patient versus 7.3 days per patient—among those receiving care in the Acute Care for Elders Unit compared to usual care. This difference produced lower total inpatient costs—$9,477 per patient versus $10,451 per patient—while maintaining patients’ functional abilities and not increasing hospital readmission rates. (www.healthaffairs.org) Therefore you can see that if we focus on preventing accidents and managing chronic illness the less time the elderly have to stay in hospital receive care during recovery. Reference: The Hasting Center, Health Care Cost Monitor, Kimberly Swartz, 2012, http://healthcarecostmonitor.thehastingscenter.org/kimberlyswartz/projected-costs-of- chronic-diseases Health Affairs, http://content.healthaffairs.org/content/31/6/1227
- Information between patients and providers is crucial. Effective communication is needed in health care and especially with elderly patients. Poor communication can result in misdiagnoses and treatments. With providers that are not specialized in Geriatrics can easily misdiagnose or treat the patient ineffectively. Communication between providers are essential. Transferring information from one physician to another is important and making sure that the information is correct. It is very difficult for a primary physician to know and treat an older person because of lack of education that provides them with information to better help and treat an older person. To promote better communication between providers and patients is to making sure the patient’s information is accurate, testing and procedures are conducted and finished, providing clear and accurate information of the patient’s charts and medications. Healthcare personnel must ensure communication effectiveness when dealing with management, employees, specialist, and support services. When a message is communicated it must be done to ensure everyone understands the message clearly. This message has to also ensure quality patient care is in mind and that all entities understand their role from the message. With government and state laws, policies and procedures, and other regulations changing daily, it is of high importance that healthcare organizations and personnel have effective communication. (2007) Lombardi. Health Care Management Chapter 4: Leading and Developing Work Teams. Retrieved from Wiley and Sons
- In medicine, physicians are known to diagnose and treat patients. Although many are trained to treat patients, there are a percentage of patients especially the elderly that gets misdiagnosed because of the lack of education, training, and physicians. Between the years 2004 -2008, there were only 320 physicians that entered Geriatrics, while there was many physicians that choose pediatrics, gynecology, and other areas. There are more elderly patients now than ever in history. Who will take care of them? According to USA TODAY, “Journal of the American Geriatric Society, warns that as the proportion of older adults spikes from 12% to a projected 20% by 2030, caring for 70 million people 65 and older and 10 million 85 and older will be a challenge.” There should be more training and education brought in classrooms to exploit and promote the necessity of this growing problem. Raising awareness of this problem is to encourage upcoming physicians of the importance of elderly care. Utilize programs, trainings, and workshops that will help physicians not only treat patients but the elderly also. American Geriatrics Society (2012) retrieved http://www.americangeriatrics.org/files/documents/Adv_Resources/PayReform_brief4.pdf
- Medicare Part D is available to anyone who is eligible for Medicare. Medicare part D is paid for separately and is run through private insurance carriers, these carriers are contracted with Medicare. There are many different plans. That have different out of pockets for plans. Medicare eligible recipients may also elect to not take part D but then they will have to pay out of pocket for all medications. There is a donut hole that once you have met a certain amount of prescription cost you will have to pay out of pocket. Once you have paid $4,700 out of pocket for prescriptions you then get catastrophic coverage. Most Medicare Recipients will reach the donut hole gap by July. Once people meet the donut hole they will either cut their medications in half or ration out what they have or they will quit taking it all together which then can lead to more illness and hospitalizations. Ideas on how to get through this gap is consider using generic drugs, work with pharmaceutical companies for their assistance programs, free medications, order 90 day supplies this is much cheaper than ordering monthly and look into community based charities that will help with the cost. References: Tracking Reports (2012) Effects of Health Care spending on the U.S. Economy. Retrieved from: http://aspe.hhs.gov/health/costgrowth. CMS. (2011). National Health Expenditure Data. Centers of Medicare & Medicaid Services. Retrieved from: http://www.cms.gov
- The waste and abuse from health care programs cost tax payer billions of dollars yearly. Improper billing and payments for Medicare payers is rising. This is a serious problem and needs to be dealt with aggressively. Some of the common health care fraud schemes include billing for services that were never provided to the patient, misreporting data and cost to increase reimbursements, paying , kickback and stealing identities or billing for the decease. The Office of Inspector General (OIG) investigates providers that that are Medicare providers and suppliers who will bill for services with out providing any legitimate service. These people will often pay poor Medicate reciepeints to be able to use their Medicare numbers. They will also pay kickbacks to physicians, nurses to help in fraud schemes. It is not always just one person or a criminal it could be a corporation. Major corporations such as pharmaceutical and medical device companies can committed fraud. This could include complex billing frauds, kickbakcs, accounting shcedmes, illegal marketing and physcians that will self referal. These abuses cast the taxpayer billlions of doollar every year. To be able to combat health care fraud there has to be prevention, detection and enforcement. The OIG uses five principle in strategic work and planning to assist in combating fraud. The 5 principles are Enrollment: this allows entities that would like to participate as providers to have their process reviewed, Payment: this will have methodologies that are responsive to that changes in the market place. Compliance: this will help in adopting practices that promote compliance, Oversight: monitoring the programs for an fraud, waste and abuse, Response this will allow the OIG to quickly respond to any detected fraud and the impose punishment for the fraud. References: Tracking Reports (2012) Effects of Health Care spending on the U.S. Economy. Retrieved from: http://aspe.hhs.gov/health/costgrowth. CMS. (2011). National Health Expenditure Data. Centers of Medicare & Medicaid Services. Retrieved from: http://www.cms.gov