This document discusses key topics in health care financial management including lowering costs, goals of the health care system, and changing methods of financing and delivery. It outlines reforms under the Affordable Care Act to expand access through insurance marketplaces and Medicaid expansion while controlling costs through value-based purchasing. It also covers trends like the rise of the uninsured and accountable care organizations, as well as factors affecting the cost of care and impacts to provider reimbursement models.

1. Context of Health Care
Financial Management
Chapter 1

2. Learning Objectives
• Identify key elements that are driving changes in health care
delivery
• Identify key approaches to controlling health care costs and
resulting ethical issues
• Identify key changes in reimbursement mechanisms to
providers

3. Lowering Costs
• Patient Protection and Affordable Care Act (ACA)
The Affordable Care Act puts consumers back in charge of their
health care. Under the law, a new “Patient’s Bill of Rights” gives
the American people the stability and flexibility they need to
make informed choices about their health.
• CMS trying to control rising costs
• Center for Medicare and Medicaid Services (CMS)
demonstrate definitively that private insurance is increasingly
less efficient than Medicare.
• Value Based Purchasing (VBP)
• Payment methodology that rewards quality of care through
payment incentives and transparency in health care.

4. Goals of the Health Care System
• Access
• Cost
• Quality

5. 1. Access
• Help establish Health Insurance Marketplaces in every state to
expand access to coverage for individuals and small
businesses, reduce administrative expenses, and increase
competition;
• Work with states to expand Medicaid coverage to more low-income
Americans;
• Enhance HealthCare gov, which empowers consumers to make
informed choices about health care options

6. 2. Cost
• Improve accessibility and integration of health care databases
so researchers can identify cost-saving, health-protective, and
quality-enhancing practices
• Improve management of health care cost information to
identify key drivers of high costs and reduce delivery of
ineffective and inappropriate care;
• Adopt and implement Affordable Care Act provisions to
standardize administrative claims transactions and to achieve
greater interoperability between administrative and clinical
data

7. 3. Quality
• Identify innovative solutions to minimize harm in all settings
by engaging local front-line providers, patients, and families in
multi-stakeholder meetings
• Implement Learning and Action Networks to share best
practices for promoting quality, patient safety, prevention,
health literacy, and improved care transitions
• Improve the quality of, safety of, and access to care in long-term
services and supports settings, behavioral health
services, and acute care hospitals, and through state health
departments;

8. Changing Methods Of Health Care
Financing and Delivery
• Requirement that almost all individuals have insurance coverage
• Requirement that states create insurance exchanges
• Provisions for expansion of Medicaid (is a social health care program
for families and individuals with low income and resources)
• Provisions for medical loss ratio and premium rate reviews
• Bundled payments and VBP
• Accountable Care Organizations

9. Trends
• Rise of uninsured from 36 million to 50 million 2001-2010
• ACA authorizes competitive insurance marketplace
• Rise of uncompensated care for the uninsured 2001-2011
• Accountable Care Organizations
• Patient Centered Medical Home
• New technology
• VBP

10. Factors Affecting the Cost of Care

11. Impacts to Reimbursement
• Cost Accounting Systems
• Group Purchasing Organizations
• Reengineering/Redesigning
• Mergers and Acquisitions
• Retail Health Care
• Medical Tourism
• Compliance
• Recovery Audit Contractors (RACs)
• VBP
• New DRG System
• ICD 10

12. Summary
• Health care administrator faces numerous complex issues
when making strategic and financial decisions.
• High ethical standards must be demonstrated