1. Out-of-pocket ◦ Taking out from your own wallet and paying for the health goods and services that you utilize. ◦ Most dominant mode of private health financing in our country. ◦ ADVANTAGE: Individual spends money only when he or she gets sick. Individual does not spend anything at all if he or she does not get sick.
◦ DISADVANTAGE Individual may encounter problems in securing finances or suffer from financial distress when he/she becomes seriously sick
◦ Insurance plans are bought by individuals for themselves or their families.◦ Can be bought by employers as medical benefits for their employees.◦ Individual pays an annual premium, in turn the company guarantees to cover his/her hospital expenses up to a certain limit for a period of 1 yr◦ “Give me your money now, and I will pay for your hospitalization needs if you get seriously sick requiring hospitalization, within a period of 1 yr.”
◦ ADVANTAGE: Individual pays a relatively small amount to be assured or relatively big hospitalization covergae within a period of 1 yr.◦ DISADVANTAGE: Individual who does not get seriously sick requiring hospitalization within the coverage period is not able to avail of or utilize health services.
MEDICAL INSURANCE GOVERNMESPECIALIST COMPANY NT HOSPITALS GENERALPHYSICIANS CONSUMER PRIVATE HOSPITALSPHARMACYLABORATORY
Patient would choose to utilize the more expensive alternative. Goods will be very cheap since the 3rd party will be paying part of the goods/services Insurance company also participates by paying health service utilization. ◦ Puts the insurance company in difficult situation because all they do is pay the utilized health goods and services. INSURANCE HAZARDS Causes bloating of medical expenses for insurance companies and can bring about bankruptcy to such companies.
Hazards ◦ Events or phenomena which happen in insurance setups, brought about by poor control of health service utilization
CONSUMER-INITIATED MORAL HAZARDS ◦ Emanates from consumers. ◦ Tendency for members to used inappropriate and expensive health services given that a 3rd party shoulders part or whole of the expenses, making it relatively cheap for the one utilizing it. PROVIDER-INITIATED MORAL HAZARDS ◦ Emanates from providers like hospitals and medical practitioners. ◦ Tendency for providers to charge prices beyond what might be considered as fair compensation for services rendered, given that those insured become less sensitive to prices (3rd party pays the price)
ADVERSE SELECTION ◦ Emanates from the insurance program itself ◦ Tendency for members who are less likely to use program benefits not to enroll and remit contributions leaving a pool of high-risk member population ◦ When an insurance holder is not able to use the insurance benefits after several years of paying the insurance premium, there is greater chance that the person will discontinue his insurance plan.
◦ Offshoot of health insurance◦ Control the medical utilization problem among insurance companies.◦ Have control over the use of healthcare benefits and are able to make utilization of health goods and services more cost-effective.◦ Consumers pays a premium which will give him a comprehensive health care program thru a “package of benefits”◦ Not merely a hospitalization coverage but a complete preventive, curative and rehab package.◦ “Give me your money now, and I will take care of your health for a period of 1 yr.”◦ Difference from insurance companies =HMOs prevent plan holders from having direct links with the providers in hospitals and clinics
Medical Specialist HMOs General Practice Medical claims: PhysicianCONSUMER “Actuarial risk” Government Facility Package of Benefits Private Facility
By limiting the probability of getting ill by covering only a list of illnesses with specific limitations, By controlling the costs of getting ill by giving contracts with providers and making them part of the HMO setup, or sometimes even to the extent of employing the providers. This makes them capable of controlling medical service utilization and bring down the cost of health care.
Annual physical examination, including basic lab procedures Out-patient benefits, mainly consultation but NOT medication Preventive care, well baby visits (cost of vaccines not included) In-patient coverage, hospitalization including professional fess, lab, medications, surgery if needed. Emergency coverage Dental, tooth extraction, prophylaxis and cleaning Maternal benefits Optical benefits Executive check up Insurance benefits
◦ Are health packages that companies administer for medical benefits of their employees.◦ Ex. Meralco put up its own hospital for employees PAL has upscale medical facility and hospital referral systems
◦ Should have own clinics and set budgets for the healthcare needs of the students.◦ Manned by health officers(by MD/RN)◦ Some may have own dental clinics