Healthcare Coverage: Third Party Payers

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Questions and Answers

What are out-of-pocket expenditures typically spent on in the healthcare system in Lebanon?

paying insurance premiums and directly on the purchase of health services from private practitioners and pharmacists

According to the content, what does the distribution of residents by covering funds depend on?

their eligibility

Who is considered the first party in healthcare coverage?

The patient

What do second parties in healthcare provide?

Healthcare services Signup and view all the answers

Health insurance is a system of reducing a person's exposure to risk of loss.

True Signup and view all the answers

The __________ party pays the physician, clinic, or other second party provider for the care or services provided to the first party (patient).

third Signup and view all the answers

Match the healthcare funding mechanism with its characteristic:

Direct taxation = Taxes imposed on individuals, households, or firms Indirect taxation = Taxes on consumption Signup and view all the answers

What term refers to the compensation or repayment for healthcare services?

Reimbursement Signup and view all the answers

How are social health insurance contributions typically shared between employees and employers?

Deducted from the employee's wage by the employer Signup and view all the answers

Private health insurance premiums can be individually risk rated based on the probability of an individual requiring healthcare. True or False?

True Signup and view all the answers

Medical savings accounts are individual accounts where people deposit money to be spent on ____________ medical expenses.

personal Signup and view all the answers

Match the following healthcare funding categories with their descriptions:

Government Finance = Funded by the government Social Insurance = Contributions shared between employees and employers Private Insurance = Voluntary enrollment with risk-based premiums Direct payment for services by Patients = Patients pay directly for healthcare services Signup and view all the answers

What are some examples of financing schemes for healthcare in Lebanon?

National Social Security Fund (NSSF), Civil Servants Cooperative (CSC), Military Schemes, Ministry of Public Health (MOPH), Private insurance companies Signup and view all the answers

Study Notes

Healthcare Coverage: A Focus on Third Party Payers

A third party payer is an institution/organization that provides reimbursement to healthcare providers for services rendered to the patient.
The third party payer may be a public or private body.
Collects revenue directly or indirectly from the population it protects.
Revenue is used to reimburse the provider or the patient.

Health Insurance

Generally, reimbursement for healthcare services is dependent upon patients having health insurance.
Insurance is a system of reducing a person's exposure to risk of loss by having another party (insurance company or insurer) assume the risk.
The risk the healthcare insurance company assumes is the unknown cost of healthcare for a person or a group.
By distributing the risk among a larger group of individuals (known as a risk pool), the insurance company reduces its own risk of loss.

Healthcare Reimbursement Methodologies

Reimbursement is the healthcare term that refers to the compensation or repayment for healthcare services.
Reimbursement is being repaid or compensated for services that have already been provided.
In healthcare, services are often provided before payment is made.

Problems of Unregulated Health Insurance Markets

Risk selection and adverse selection
Moral hazard
Risk selection: Insurers manage to select the "best risks", for example the young and healthy, and tend to exclude the elderly, women of fertile age and the sick.
Adverse selection: Refers to the problem in which insurance buyers have more information about whether they are high-risk or low-risk than the insurance company does.

Insurance and Moral Hazard

Health insurance reduces price sensitivity because patients do not pay for medical care at the point of service.
This separation of consumption and payment makes people act as though they are receiving low-cost or even free services.
Leading to a tendency to overconsume medical care as others bear the cost.
This is a "moral hazard" which is a tendency to take on more risk as the costs are shifted to others.

Functions of the Healthcare System

To finance health care services, the third party must collect revenues directly or indirectly from the population it protects.
Revenue is used to reimburse the provider or the patient.
The health care system can be broken down into functional components:
- Revenue collection
- Fund pooling
- Purchasing of health care
- Provision of health care

Funding Mechanisms

Taxation (Direct/ Indirect)
Social insurance contributions
Private insurance premiums
Individual savings
Out of pocket payments and loans
Donations

Social health insurance contributions are usually related to income and shared between the employees and employers.
Law compels employers to deduct a percentage of each employee's monthly wage for health to be paid to a "social insurance fund".
Law compels employee to pay a percentage of his/her monthly wage, (deducted by the employer) to "social insurance fund".
Contributions are usually obligatory.
NOT RELATED TO RISK.
Social insurance funds can be managed publicly or privately.

Private Insurance Premiums

Private health insurance premiums are:
- Paid by an individual
- Shared between the employees and the employer
- Paid wholly by the employer
Premiums can be:
- Individually risk rated: based on an assessment of the probability of an individual requiring health care
- Group rated: based on an estimate of the risks across all employees in a single firm.

Individual Savings

Medical savings accounts are individual savings accounts into which people are either required to or given incentive to, deposit money.
The money must be spent on personal medical expenses.
Patients may be required to pay part of all of the costs of medical care/services in the form of user charges.

Health System in Lebanon

Government Finance
Social Insurance
Private insurance
Direct payment for services by Patients
Multiple public, private not-for-profit, and private for-profit financing schemes including:
- National Social Security Fund (NSSF)
- Civil Servants Cooperative (CSC)
- Military Schemes
- The Ministry of Public Health (MOPH)
- Private insurance companies (as alone, or complementary to NSSF)
- Out of pocket expenditures### Health System Financing in Lebanon
The Ministry of Public Health (MOPH) provides health benefits to uncovered Lebanese citizens, with 85% of hospital care costs paid directly by the government and 15% co-payment with some exceptions.
MOPH also provides benefits for dispensing expensive drugs for catastrophic illnesses, vaccines, and essential drugs to public and NGOs health centers.

Private Insurance

Private insurance is voluntary, with variable benefits and funding from households (risk-based premiums) and employers and employees for complementary insurance.
There are around 70 private insurance companies in Lebanon, with 20 companies controlling over 70% of the market.
Private insurance companies take advantage of the system by selecting younger and better-off clients, while chronically ill patients are discouraged by high premiums.
Expensive interventions like open-heart surgery, chemotherapy, and transplantation are often excluded from private insurance coverage, shifting the burden to the Ministry of Public Health.

Out-of-pocket Expenditures

Out-of-pocket expenditures are spent on paying insurance premiums and directly on the purchase of health services from private practitioners and pharmacists.

Distribution of Residents by Covering Fund

According to a 2005 study, the distribution of residents by covering fund is not specified in the provided text.

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Description

Identify key features of private and public payers of health care, including modes and mechanisms of payment. Learn about third party payers in the Lebanese healthcare system.