D065 Healthcare Ecosystems

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Apr 3, 2024

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HEALTHCARE ECOSYSTEMS D065 ESSENTIAL READING CHAPTER ONE THE US HEALTHCARE DELIVERY SYSTEM Specialty physicians also complete extensive postgraduate medical education. Board certification for specialties requires the completion of postgraduate training and passing standardized examination common specialties include internal medicine, pediatrics, family practice, cardiology, neurology, oncology, radiology. Common surgical specialties include anesthesiology, cardiovascular surgery, obstetrics and gynecology, orthopedics, urology, ophthalmology, plastic and reconstructive surgery, neurosurgery. 1910 Dr. Franklin Martin suggested surgical care needed to pay better attention to patient outcomes. He learned these concepts from Dr. Ernest Codman who thought outcomes should be tracked over time to determine what method worked best. At the time there was a lack of trained medical staff and lax professional standards contributed to problems. In the early 20 th century hospitals were used primarily for performing surgery other nonsurgical care was typically completed at home. The push for hospital reform led to the formation of the American College of Surgeons in 1913 Federal healthcare legislation 1902- Biologics Control Act: regulated the vaccines and serums sold via interstate commerce this assisted in launching the National Institutes of Health and other laboratories 1935-Social Security Act provided states matching funds for maternal and infant care, rehabilitation of crippled children, general public health, an aid for dependent children 1946-Hospital Survey and Construction Act authorized grants for states to construct new hospitals also created a boom in hospital construction grew from 6000 to 7200 1965-Public Law 89-97 amendments to social security that created Medicaid and Medicare providing healthcare benefits to people over 65, disabled, widowed, child survivors, and the poor

1972-Public Law 92-603 expanded initial Medicare and Medicaid requirements for utilization review to include concurrent review and established standards and made efforts to control the rising costs of healthcare by evaluating patient care services for necessity, quality and cost reduction 1974- Health Planning and Resources Development Act created a system of local organizations called health systems to make service and technology decisions along with other legislation it was unsuccessful in slowing cost increases and was repealed in 1986. 1977-Utilization Review Act required hospitals to conduct continued stay reviews to determine medical necessity, includes regulations for fraud and abuse also added additional efforts to control healthcare costs 1982- Peer Review Improvement Act redesigned the PSHRO program, hospitals began to review medical necessity for hospitalization prior to admission 1982-Tax Equity and Fiscal Responsibility Act (TEFRA) introduced the prospective payment system for Medicare reimbursement to control the rising cost of providing healthcare services this also changed Medicare reimbursement from a fee-for-service model to a predetermined level of reimbursement 1982/1983- Prospective Payment Act defined the prospective payment system and the use of DRG’s as the methodology for inpatient care this Act was moderately successful at slowing the rate of healthcare spending in the US 1985/1986- COBRA allowed the federal government to deny reimbursement for substandard services provided to Medicaid and Medicare recipients. This began establishing a link between quality and reimbursement 1986-Helathcare Quality Improvement Act established the National Practitioner Data Bank providing a clearinghouse for medical practitioners who have a history of malpractice suits and other quality problems 1989-Ominibus Budget Reconciliation Act instituted the Agency for Healthcare Policy and Research now known as Agency for Healthcare Research and Quality (AHRQ) 1996-HIPAA addressed issues related to the portability of health insurance after leaving employment and administrative simplification of healthcare also reduced barriers to changing employers due to existing health conditions and created a federal floor for healthcare policy

1996- Mental Health Parity Act, if metal health benefits are provided by an employer the benefits must be equal to the benefits provided under medical policies 2009- HITECH accelerated the adoption of and use of information technology in healthcare through economic incentive and planned future financial penalties, this also expanded HIPAA privacy protections and established regional extension centers 2010- Affordable Care Act, Obamacare required most US citizens to have healthcare coverage through increased access to health insurance, tax credits to employers offering health insurance, expansion of Medicaid programs The HHS updates their strategy every four years 2014-2018 contains the following goals Strengthen healthcare, advance scientific knowledge and innovation, advance the health safety and well-being of the American people, and to increase the efficiency transparency accounting and effectiveness of all HHS programs BIOMEDICAL AND TECHNOLOGICAL ADVANCES IN MEDICINE Biotechnology is defined as the field devoted to applying techniques of biochemistry, cellular, biology, biophysics, and molecular biology to addressing practical issues related to human beings, agriculture and the environment. Two examples are pharma and medical device companies. A medical device company produces devices such as instruments, machines, or an implement or apparatus intended for use in the diagnosis of disease or for monitoring or treatment of a condition. Below is a chronological timeline of advancements in biomedicine and technology  1842- first recorded use of ether as an anesthetic  1860s Louis Pasteur laid the foundation for modern bacteriology  1865 Joseph Lister was the first to apply Pasteur’s research to treatment of infected wounds  1880s-1890s steam first used in sterilization  1895 Wilhelm Roentgen made observations that led to the development of X-ray technology  1898 Introduction of rubber surgical gloves, sterilization, and antisepsis  1940 studies of prothrombin time first made available

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 1941-1946 studies of electrolytes; development of major pharmaceuticals  1957 studies of blood gas  1961 studies of creatine phosphokinase  1970s surgical advances in cardiac bypass surgery, surgery for joint replacement and organ transplantation  1971 computed tomography first used in England  1974 introduction of whole-body scanners  1980s introduction of MRI  1990s further technological advances in pharmaceuticals and genetics including the Human Genome Project  200s NIH creates roadmap to accelerate biomedical advances, creates effective prevention strategies and new treatments, and bridges knowledge gaps in the 21 st century ORGANIZATION AND OPERATION OF MODERN HOSPITALS The term hospital can be applied to any healthcare facility with the following four characteristics: An organized medical staff, Permanent inpatient beds, Around-the-clock nursing services and Diagnostic and therapeutic services. Most hospitals provide some level of acute care which is defined as short-term care provided to diagnose and treat an illness or injury. Types of services provided - Rehab services for those with chronic, debilitating illness or injury patients often stay here for several months - Psychiatric hospitals provide inpatient care to individuals with mental or developmental disorders patients typically spend several days to months in these hospitals and often require repeat hospitalizations for chronic psychiatric illness - General and acute care hospitals provide a wide range of medical and surgical services used to diagnose and treat illness and injury - Specialty hospitals provide diagnostic and therapeutic services for a limited range of conditions (burns, cancer, TB, OBGYN etc.) Hospitals can be owned by a variety of entities. Government owned hospitals are operated by the state, federal, and local governments. Government owned are also called public hospitals they are supported at least in part by tax dollars.

Proprietary hospitals can be owned by private foundations, partnerships, or investor-owned corporations. Large for-profit companies may own several hospitals, several are publicly traded. Voluntary hospitals are not-for-profit hospitals owned by universities, churches, charities, religious orders and other entities. They often provide free care to patients who otherwise would not have access to healthcare services 3 DEVELOPING THE RIGHT CULTURE *COMPONENTS AND OPERATION OF HEALTHCARE ORGANIZATIONS Essential reading: PG 74/75 The US health information management concepts, principles, and practice Third-party reimbursement systems for healthcare began in the 1940’s due to the need for systematic and accurate communications between providers and third-party payers. There are several different payer sources in the healthcare industry. Most individuals are covered by employer backed plans, union coverage, commercial coverage, and plans purchased by the ACA. GOVERNMENT SPONSORED REIMBURSMENT SYSTEMS Medicare was first offered to people over the age of 65 in July 1966 this coverage is now offered to retired people and people with disabilities. Any person receiving Social Security benefits is also eligible for Medicare regardless of income. Part A is financed through payroll taxes. Initially coverage was applied to hospitalization and home health. Coverage is now extended to nursing homes and those with end-stage renal disease receiving dialysis. Part B is optional and financed through monthly premiums paid be eligible members. It covers physician’s services, outpatient hospital care, medical services and supplies and other costs that are not covered by Part A. neither Part A nor B covers the cost of prescriptions. Part D was enacted to cover prescriptions. Medicaid is medical assistance program for low-income Americans this is funded partially by the federal government and partially by state and local governments. Medicaid covers the following benefits:

 Inpatient hospital care  Outpatient hospital care  Laboratory and x-ray services for people over 21  Physicians’ services  Family planning services  Rural health clinic services  Early and periodic screening, diagnosis, and treatment services Services Provided by Government Agencies Federal insurance programs cover health services for several additional populations including active-duty and retired military and their families and Native Americans. In partnership with state governments additional insurance is available to those who do not qualify for Medicaid or Medicare. TRICARE was originally referred to as the Civilian Health and Medical Program for the Uninformed Services (CHAMPUS) pays for care delivered by civilian health providers to retired members of the military and other uniformed services. The VA hospital system was established in 1930 to provide hospital, nursing home, residential and outpatient medical and dental care to vets of WW1. Today the VA operates more than 1700 sites of care including hospitals, clinics, counseling centers and other medical facilities across the US. State governments often operate healthcare facilities to serve citizens with special needs such as the developmentally disabled and mentally ill. Some states also offer health insurance programs to individuals who cannot qualify for other insurance programs, ESSENTIAL READING CHAPTER 1 HEALTHCARE REIMBURSEMENT METHODOLOGIES NATIONAL MODELS OF HEALTHCARE DELIVERY There are three models for delivering healthcare services exist Social insurance model: 1883 Chancellor Otto von Bismark this is the oldest in the world and has been the model for universal healthcare. Every worker and employer must contribute to sickness funds, agencies that collect and redistribute money per government regulations, they are a form of social security. With varying modifications, France, Netherlands, Japan and many other countries have adopted this German model National health service model: 1946 Sir William Beveridge created the national health service model for the UK. The government owns the clinics

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and hospitals and pays the doctors and health professionals who work in these facilities. This is called a single-payer health system, the UK government is the only payer and is financed by taxes. Spain and Scandinavian countries have adopted this model. Private health insurance model: in this model private health insurance companies exist. Private companies collect premiums to create a pool of money is used to pay health claims. The insurance company determines the contribution, and this contribution is not based on income, the United States and Switzerland use the private health insurance model. In Switzerland government regulation is far more extensive than in the United States. US Healthcare Sector There are 4 characteristics that are key to understanding the US healthcare sector 1. Size of the economic sector 2. Complexity 3. Intricate payment methods 4. Broad program scopes The US system is large and complex. There are systems and subsystems, this can include physicians, large and small hospitals, rehabilitation specialists, chiropractors, and medical equipment companies to name a few. There are as many different payment services in the US healthcare system, private insurance, government insurance, worker compensation, Indian Health Services and private paying individuals (which is not a complete list) Complexity in federal payment methods Recognized entities for payment, US federal Law Code with more than 600 pages, 2 volumes of the Code of Federal Regulations, 100 pages of new regulations, Medicare processing 900 million claims per year from more than 700,000 providers annually, CMS contractors from 116 private contractors to administer, regulate, and monitor Medicare program Medicare is the largest single payer for health services, Medicare also provides funds to medical education, research, and care for the disadvantaged. Medicaid provides reimbursement for health services received by low-income individuals and families. Due to the size of the federal role in healthcare reimbursement any changes that the government makes profoundly affect providers, health insurers and healthcare systems. Health Insurance

Reimbursement for healthcare services depends on patients having health insurance. In healthcare the variability of health statuses across many people allows the insurance company to make better estimates of the average cost of healthcare. MEDICAL AND CLINICAL STAFF ESSENTIAL READING CHAPTER 1 THE US HEALTHCARE DELIVERS SYSTEM PGS 53-67 Organization and Operation of Modern Hospitals The term hospital can be applied to a variety of healthcare settings that meet the following four characteristics 1. An organized medical staff 2. Permanent inpatient beds 3. Around the clock nursing services 4. Diagnostic and therapeutic services Most hospitals also provide acute care, defined as short term care provided to diagnose and treat an illness or injury. Most often associated with inpatient care. Inpatient care is typically continuous, and the individual is provided with room, board, nursing, and other medical care while their illness or injury is being treated. To be considered inpatient an individual must be admitted to the care facility. Below are some of the factors considered before admitting a patient. 1. The severity of the signs and symptoms of the patient 2. The medical predictability of something adverse happening to the patient 3. The need for diagnostic studies to assist in assessing whether the patient should be admitted 4. The availability of diagnostic procedures at the time and location where the patient is. Types of hospitals Modern hospitals are complex, much of the training for doctors, nurses, and other medical professionals is done at a hospital. Hospitals can be classified in different ways according to the following items  Number of beds  Types of services provided  Type of patients served  For profit and not for profit status  Type of ownership

Healthcare reimbursement methodologies

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D065 Healthcare Ecosystems

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