Features of Third-Party Payers:
How reimbursement and coding affects the healthcare system
The healthcare services market is a very unique entity from the perspective of an economist. Unlike conventional markets, where consumers can very easily compare prices, patients face a very opaque market where costs are largely concealed from them. This is further complicated by the fact that the majority of consumers do not pay for their healthcare directly; rather this payment is mediated through third-party payers in the form of for-profit or not-for-profit private health insurance companies or, in the case of Medicaid and Medicare, state and federal agencies ("Chapter 3," n.d., p. 64). Some patients obtain their care through Health Management Organization (HMOs) and Managed Care Organizations (MCOs) (both of which usually created by insurance companies), which use a system of rationed services and gatekeeping to manage costs within their network. The theory is that by integrating preventative and rehabilitative services with conventional medicine there is less of an incentive to over-treat and over-screen for conditions and thus encourage cost savings ("Chapter 3," n.d., pp. 64-65).
Reimbursement methods may include fee-for-service models: in this method the greater the number of services and the more costly they are, the higher the level of reimbursement. The criticism of this model, however, is that unlike the HMO approach, it encourages more heroic and unnecessary measures because reimbursement...
Days earlier, Democratic Senator Pat Moynihan said pretty much the same on Meet the Press. Yet the public continued to demand changes. The changes they eventually got are still to be seen, as to their level of effectiveness. Changes that many see as temporary and not far reaching enough, such as when any sort of national health care plan was squashed by the stakeholders, fearing loss of revenue and convincing
While many insurance companies may have limits in place, those limits are easily raised when requested by doctors (Maschue 2012). Under the current Medicare and Medicaid plans, however, the government sets specific amounts that doctors and hospitals may bill and any amount over that will not be paid. This limit leads to many doctors refusing to accept government patients or reducing the amount of care for those patients (Maschue
Second, the fact that medical costs are billed to health insurance companies is responsible for an industry-wide culture of financial irresponsibility where little concern is given to avoiding unnecessary or duplicated costs of healthcare services (Kennedy, 2006; Reid, 2009). Unfortunately, political opposition to healthcare reform throughout 2009 made it impossible for the Obama administration to achieve this essential goal but it is likely that the current system cannot be sustained
Admittedly, there have been some minor improvements since 2007. Specifically, legislation enacted in 2009 by President Barack Obama eliminated the ability of health insurance companies to exclude certain individuals from coverage and to deny coverage to beneficiaries in need of expensive healthcare services by simply canceling their policies. That legislation extended the maximum age that children may remain on their parents' policies as well. Unfortunately, the Obama administration essentially gave
Drug costs have gone from 26% of health care spending by private insurance companies in 1990 to 44% in 2006 (Kaiser Foundation, 2008). This issue has not been adequately addressed by health care reform. Instead, a deal appears to be made for $80 billion in concessions from the pharmaceutical industry in exchange for its support of health care reform (Kirkpatrick, 2009). The underlying trend in each of these major issues
The natural history of disease is an epidemiological model, showing how an individual’s health condition will progress over time without any interventions. Intervening at the weakest link in the chain of progression of specific diseases sometimes means addressing the symptoms of a problem long after the disease has progressed past a treatable point. Usually, high technology, high-cost solutions are required when intervening late in the stage or progress of a
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