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Jan 9, 2024

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Health Care Financing Framework Dawn Parker Grand Canyon University HCA 515: Analysis of Contemporary Health Care Delivery Models Dr. Chip Coon December 20, 2023 1

Health Care Financing Framework A significant characteristic of medical care delivery in the United States is the complexity of financing. The primary determinant of the demand for medical services in the US health-care delivery system is insurance. Restriction of health insurance funding, together with restrictions on price and capacity to pay, limits the quality and kind of healthcare services consumers utilize, which in turn controls overall spending on health care. How does the framework perform in government-funded insurance systems such as Medicaid and the Veterans Administration? Quality of service, payment, wellness and prevention, healthcare reform, and funding are the principal areas that will be compared in the following paragraphs. Military personnel, veterans, and their families have access to medical treatment through the Tricare program, which operates on a global scale. By utilizing the services offered by DOD medical facilities, beneficiaries can access medical care from civilian practitioners. Dependent on whether qualified beneficiaries are based in the US or overseas, TRICARE provides a variety of health insurance plans, some of which cover dental treatment. People who have retired and are 65 and older have an additional option with TRICARE that works with Medicare. The Department of Veterans Affairs (VA) and TRICARE both provide benefits to service members who are discharged from the military because of a service-related disability or sickness. In any case of medical care, qualifying beneficiaries of either TRICARE or VA can choose to use their coverage (Shi & Singh, 2022). Medicaid covers a substantial portion of the US population, including children, pregnant women, the elderly, people with disabilities, and those with low incomes. Medicaid is administered by the states in accordance with federal regulations. The federal government and the states work together to fund the program (Medicaid.gov, 2023). Established to provide low- 2

income persons with access to healthcare, Medicaid is also known as Title 19 of the Social Security Act. As a result, much of the funding for Medicaid comes from taxpayers, making it the primary health insurance program for low-income Americans (Shi & Singh, 2022). To improve the availability and quality of care for Veterans, researchers from the VA have been an integral part of several programs. These endeavors include figuring out the best ways to implement effective treatments or programs, involving healthcare providers and Veterans in improving healthcare accessibility, and developing and implementing efficient treatments and programs outside of traditional medical facilities (US Department of Veterans Affairs, 2021). Shared medical appointments are becoming more popular among Americans. Group visits help patients feel supported, encouraged, and motivated by connecting them with others going through similar experiences. The VA is investigating the use of video conferencing for SMAs in diabetes treatment. Telemedicine will assist qualified medical specialists in remote places to perform group visits in person if it proves beneficial. When comparing Veterans with serious mental diseases who were re-engaged in VA health care to those who were not, the VA found that the former group had a mortality risk that was twelve times lower. An evaluation at the VA Ann Arbor Healthcare System is targeting homeless veterans with major mental illness who have stopped receiving VA treatment. Researchers are investigating if consolidating VA housing, health care, and other social services might better engage these Veterans. In the Spring 1996 issue of the Health Care Financing Review, there were articles on the difficulties and new developments in paid healthcare groups. Discussing "Service Delivery in an Evolving Managed Care Environment" broadens the scope to include MCO oversight and assessment of service quality. Several factors are highlighted in this edition that illustrate the need to monitor and analyze service performance. Therefore, it is possible to assess the efficacy 3

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and efficiency of payment systems, as well as the effects of managed care on costs and use. The primary objective, however, is to guarantee that the plans' quality of care and availability of treatment are sufficient. The National Committee for Quality Assurance and Medicaid Health Plan Employer Data Information Set (HEDIS) were created to provide States, managed care plans, healthcare providers, and consumers with the tools they need to ensure high-quality managed care for Medicaid beneficiaries. Specifically designed for Medicaid members, the private sector's health maintenance organization (HMO) performance evaluation approach is utilized by Medicaid HEDIS (Hadley & Wolfe, 1996). All government payments are now required to be made electronically per a final rule on Electronic Funds Transfer (31 C.F.R. 208), which was put into effect by the US Department of Treasury. Local dental professionals and physicians also fall under this category of accountable parties. Community health centers and other organizations providing care must enroll in EFT if they are to meet this criterion. Electronic Funds Transfer (EFT) allows for the immediate transfer of funds into a bank account. When a request is submitted for the medical treatment provided to a Veteran or a Veteran's family member, the Department of Veterans Affairs (VA) assesses the request and issues an electronic payment (US Department of Veterans Affairs, 2023). States can offer Medicaid coverage in one of two ways: either through managed care programs or fee-for-service (FFS). In the FFS model, Medicaid recipients get direct payments from the state to their providers for all approved treatments. Each person enrolled in a managed care plan receives a fee from the state. Providers are then reimbursed by the plan for all Medicaid-covered services that a beneficiary may need, as per the agreement with the state. Some Medicaid FFS payment rates are far lower than those of other payers, leading some to worry that doctors will be less interested in working with Medicaid and patients may have less 4

access to care (Decker 2012). There are several recognized variables that affect physician involvement, such as administrative load. However, studies have consistently shown that low payment rates (compared to other payers) are associated with lower levels of physician participation. Although it varies by state and service, Medicaid FFS physician payment rates are usually two-thirds of what Medicare pays. Medicaid prioritizes prevention and wellness in compliance with federal legislation. A wide variety of benefits, some mandatory and others voluntary, must be provided by states. Exams, diagnoses, treatments, home health, physician visits, and other forms of outpatient care are all part of this service. In addition, dental and vision coverage are also offered as supplementary benefits (Shi & Singh, 2022). Each Veteran's medical benefits package is distinct. The program comprises a range of services and medical attention aimed at assisting patients in managing illnesses and injuries, mitigating the risk of future health complications, enhancing functional capabilities, and enhancing overall quality of life. When compared to private healthcare providers, the Veterans Affairs (VA) stands out for three key reasons: first, its extensive clinical knowledge of military- related illnesses and disorders; second, its patient-centered, team-based approach to primary care; and third, its thorough understanding of veterans, including all aspects of their physical, psychological, social, and economic health, as well as the vital support services they require for the care of their family members ( Shulkin, 2016). Approximately one-fourth of all healthcare expenditure in the United States goes toward administrative costs, which come to $361 billion per year, according to the Institute of Medicine and the Centers for Medicare and Medicaid Services (CMS). Health insurance companies, whether public or private, incur what are known as "administrative costs" even though they do 5

not pay providers directly. It also incorporates expenses that other system participants, including providers, employees, and consumers, incur when dealing with insurers. According to a Kaiser study, rising health care costs may be attributable, in part, to the fact that fewer Americans are paying an increasing share of their medical bills out of pocket. The proportion of personal health expenditures paid directly by consumers decreased from 40% to 14% between 1970 and 2010. Health insurance premium increases during this time put a strain on consumers' finances, but lower out-of-pocket costs meant they could use more healthcare services, which led to higher spending ( Norbeck, 2013). The health insurance sector is most in need of reform when it comes to financing healthcare. Healthcare is optimally funded through health insurance. This occurs as individuals with health insurance willingly contribute funds on a regular basis to a shared pool to obtain health coverage. While a substantial number of people may lack the financial means to cover the entire cost of medical treatment upfront, they are able to comfortably manage smaller monthly or annual payments. Being the dominant employer, the government has the power to create insurance programs that are customized to the requirements and choices of its employees. A significant multitude of individuals are registered in the government's coverage program, which offers comprehensive coverage. Health insurance is the sole practical and ideal means of funding medical treatment. Therefore, it is imperative to revamp it to ensure accessibility, affordability, reliability, and user-friendliness ( Levy and Meltzer, 2018). 6

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References Decker, S. (2012). In 2011 Nearly One-Third Of Physicians Said They Would Not Accept New Medicaid Patients, But Rising Fees May Help . Health Affairs , 31(8). Hadley, J. P., & Wolf, L. F. (1996). Monitoring and evaluating the delivery of services under managed care. Health care financing review , 17 (4), 1–4. Levy, H., & Meltzer, D. (2018). The impact of health insurance on health. Annu. Rev. Public Health , 29 , 399-409. Medicaid.gov (2023). Basic Health Program. Medicaid; Keeping America Healthy. https://www.medicaid.gov/basic-health-program/index.html Norbeck T. B. (2013). Drivers of health care costs. A Physicians Foundation white paper - second of a three-part series. Missouri medicine , 110 (2), 113–118. Shi, L., & Singh, D. A. (2022). Delivering health care in America: A systems approach (8th ed.). Jones and Bartlett Shulkin D. J. (2016). Why VA Health Care Is Different. Federal practitioner: for the health care professionals of the VA, DoD, and PHS , 33 (5), 9–11. U. S. Department of Veteran's Affairs (2021). Health Services Research and Development Service (HSR&D). VA research on Health Care Delivery. https://www.research.va.gov/topics/healthcare_delivery.cfm U. S. Department of Veteran's Affairs (2023) VA Benefits and Community Care; Provider Payments https://www.va.gov/COMMUNITYCARE/revenue-ops/provider-payments 7

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