Health care system (Health system)

Abstract

The health care system in the US is comprised of a multitude of subsystems with significant interstate variation. There is no universal health care coverage; there is a significant number of people without health insurance. Health insurance can be funded by the state (ie.g., Medicare), employers, or individuals.

Health insurance funding and payment models

Government-funded health insurances

Medicare

  • Eligibility
  • Subdivided into 4 parts: based on the extent of coverage
    • Part A: hospital care, hospice care for terminal patients, skilled nursing facility care (if services are needed daily after a minimum 3-day stay in a hospital)
    • Part B: doctor’s fees, emergency department visits, diagnostic tests, rehabilitation
    • Part C: all services covered by parts A and B, including preventive care
      • This plan allows people to enroll in a private health insurance plan.
      • Medicare pays other organizations, such as insurance companies, hospital systems, or managed care organizations, to provide care.
    • Part D: prescription drugs

Medicaid

Jointly funded by the state and federal governments

  • Eligibility: individuals with low income
  • Coverage: hospital care, laboratory tests, diagnostic tests (such as x-rays), doctors' visits, skilled nursing care, vaccinations, home health care

Children's Health Insurance Program (CHIP)

Eligibility: uninsured children of families with low income, but not low enough to qualify for Medicaid

Private health insurance

  • Used by more than half of the American population
  • It can be employer-sponsored (most common), college-sponsored, or individually purchased.

Health care payment models

  • Fee-for-service:
    • Patients pay for each service received.
    • Payment depends on the quantity, not quality, of care delivered.
    • Preferred provider organizations (PPOs) may offer discounts (i.e., discounted fee-for-service).
    • Poses risk for overtreatment
  • Bundled payment:
    • A single negotiated payment for all services received for a clinically-defined care such as pregnancy and birth
    • Providers can save money by increasing the efficiency of care and avoiding unnecessary procedures.
  • Capitation:
    • A fixed payment for each enrolled person, per period of time for specified medical services
    • Payment made whether or not the person seeks care
    • Providers focus on preventive medicine and saving money
    • Poses risk for undertreatment

Common types of health insurance plans

Common health insurance plans Health care delivered through Coverage Specialist care
Health Maintenance Organization (HMO)
  • Network of doctors, specialists, and hospitals
  • Primary care physician is the first contact person.
  • No coverage for out-of-network providers, except emergency visits that are covered at in-network rates.
  • Referral needed from primary care physician to see a specialist.
  • Women have direct access to obstetrical and gynecological care.
Preferred Provider Organization (PPO)
  • Network of doctors, specialists, and hospitals
  • No primary care physician needed
  • Coverage for out-of-network providers
  • But high out-of-pocket payments
  • Specialist can be seen without a referral from a primary care physician
Point-of-Service (POS)
  • Network of doctors, specialists, and hospitals
  • Primary care physician is the first contact person.
  • Coverage for out-of-network providers
  • But high out-of-pocket payments
  • Referral needed from primary care physician to see a specialist.
Exclusive Provider Organization (EPO)
  • Network of doctors, specialists, and hospitals
  • No primary care physician needed
  • No coverage for out-of-network providers
  • Specialists can be seen without a referral from a primary care physician
last updated 07/31/2018
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