Healthcare Organization: Chapters 7 & 8

Study Guide Test 2

• The exam covers chapters 6, 7, 8, 11, 12, 13, and 16, along with A&M readings.
• It will be in the same format as test 1, with 50 multiple-choice and true/false questions.
• The test duration is one hour and fifteen minutes.

Chapter 7 & 8: Organization and A&M Text

• The levels of care include primary, secondary, and tertiary.
• Tertiary care is the most costly.
• Primary care addresses common health issues, accounting for 80-90% of visits.
• This includes immunizations, colds, physicals, and ear infections.
• Secondary care deals with problems needing specialized clinical expertise, such as OB/GYN, ENT, surgery, and cancer treatment.
• Tertiary care involves rare and complex problems like organ transplants and congenital malformations.

Regionalized vs. Dispersed Model

• The dispersed model has grown in the U.S.
• Regional care is highly structured, based on primary care, and has an upward organization.
• General Practitioners (GPs) primarily practice at the primary care level, relying on coordinated resources in a geographic region.
• Dispersed model allows patients to seek care where they prefer, with an emphasis on tertiary expertise.
• In the dispersed model, primary care is spread among specialists, increasing the total supply of generalists.

Arguments for and against Dispersed Model

• Pluralism enables more available providers and facilitates access.
• Americans value choice of providers, access to specialists, and technology.
• The dispersed model lacks coordination
• It maintains quality of care with fewer resources.
• Research indicates comparable outcomes for patients treated by general practitioners and nurse practitioners.
• It is inconsistent with the health needs of the majority,common disorders usually occur, rare ones occur rarely.
• ex: URI, skin disorders, emotional disorders, preventive care
• Generalists practice a less resource-intensive style of medicine contrasting with specialists.
• Costs are lower when patients are treated by generalists versus specialists, after adjusting for illness severity.

Supply of U.S. Generalist Physicians

• There is a huge shortage of Primary Care Physicians (PCPs).
• In 2023, there was a projected shortage between 17,800 and 48,000 PCPs.

Vertical Integration (First Generation HMOs - Kaiser)

• The vertical integration model consolidates all care levels, staff, and facilities under one organizational ownership.
• The model does not cover the entire population but ensures the delivery of all services to its enrollees.
• Physician group practices care for members under a capitated plan
• This enables a more population-based health model.

Virtual Integration - Independent Practice Associations (IPAs) and Integrated Medical Groups

• Virtual integration involves hospitals and insurers recruiting office-based, fee-for-service community physicians into an IPA to create a basis for an HMO and negotiate contracts for care.

Benefits of Virtual Integration

• Allows insurers to respond to market changes by renegotiating contract bargains with providers.
• Low capital costs since the HMO does not have to own buildings.
• Integrated medical group model: physicians do not own their practices, but are employed by medical group organizations.
• Value of telehealth and digital care
• Telehealth brings together patients and providers over a distance through electronic communication.
• Patients can use digital care apps to access health data, manage medication dosing, and receive lifestyle coaching.
• Virtual integration coordinates healthcare services without direct provider ownership.
• This relies on strong partnerships, digital systems, and shared information networks, commonly seen in managed care plans and ACOs.

Advantages of Virtual Integration

• Reduces administrative and operational costs.
• Improves communication among insurers, providers, and patients via Electronic Health Records (EHRs).
• Allows quick adaptation to healthcare changes without the burden of physical infrastructure.
• Provides access to a wide range of specialists and hospitals without restricting patients to a single system.
• Empowers the use of analytics and digital instruments to monitor patient outcomes, cost-saving opportunities, and improve population health management.

Disadvantages of Virtual Integration

• Insurers have limited influence over clinical decisions due to lack of direct ownership.
• If communication and data-sharing systems are poorly integrated, patient care may fragment.
• Compliance with healthcare laws and regulations can be complex.
• Some providers may hesitate to integrate due to concerns about autonomy and reimbursement structures.
• Successful virtual integration relies heavily on robust and costly IT infrastructure.

Importance of HMO Act 1973

• The Act provided federal funds to promote prepaid practice and IPAs.
• Medium to large businesses then offered one HMO plan to employees.
• IPAs were easier to organize, but faced financial risks in the 1980s.
• Gatekeepers were used for cost containment, causing problems as physicians did not always know accepted hospitals/specialists.

Reform

• Needed changes included reforming payment models, making electronic medical records user-friendly, increasing access points, and interprofessional care teams.
• A hospitalist is a physician whose role is to care for hospitalized patients, then return them to their regular physicians at discharge.

Patient Centered Medical Home

• The solution for complex patients is based on the following characteristics:
• PCP is the source of first contact.
• Care focused on the person over time, and is comprehensive.
• Care is coordinated when patients need outside specialist care.
• Patient needs are managed through a single center using bundled payments.
• High-need patients are targeted, such as those with chronic illnesses.
• Practices must meet standards and be certified for quality.

Accountable Care Organizations

• Networks of physicians and providers are held accountable for cost and quality of care delivered to a group of Medicare patients.

Organizational Reform

• Increased fees for primary care delivery.
• It supports patient-centered medical home systems and community health centers.
• Increases access to care by increasing funding to community health centers and the National Health Service Corps.
• It establishes new programs to support school-based health centers.

Chapters 11-12: Health Expenditures and Costs

(Use slides and text to reinforce understanding).

• Health expenditures are about 18% of the GDP.
• Health expenditures increased from 9.2% GDP in 1980 to 17.9% GDP in 2021.
• By 2026, national health expenditures per capita are projected to increase to $16,167 from $1,110 in 1980.

Health Costs and Outcomes Model

• Provides a framework for discussion, analysis, and decision-making.
• Enables examination of the relationship between health care costs and benefits in terms of improved health outcomes.
• The relevant outcome is the overall health of a population rather than any one individual.
• Quantifying health at a population level is possible.
• Cost control can be painless or painful.
• Cost equals Price x Quantity.
• A cost increase that represents higher process without additional quantities of health care is an inefficient use of resources.

Painless Cost Control

• Controlling fees and provider incomes
• Cutting the price of pharmaceuticals and other supplies
• Reducing administrative waste
• Eliminating medical interventions with no benefit
• Substituting less costly technologies that are equally effective
• Increasing the provision of those preventive services that cost less than the illnesses they prevent.
• Price inflation is a major contributor to increased health care costs.
• 2/3 of this high growth rate is from health care prices rising more rapidly than other prices in the economy.
• 1/3 is from the increase in quantity of goods and services.

Prescription Drug Prices

• They are often 50% higher than other countries.
• Prescription drug prices increase either in January or July each year.
• In January 2022, the average price increase was nearly $150 per drug.

Strategies for Cost Control

• Financing = flow of money (taxes, premiums) from individuals and employers to health plans.
• Government regulation of taxes serves as control over public expenditures for health care (Canada/Germany are tax financed, US uses Medicare A).
• Inadequate tax support can result in budget deficits.

Competitive Strategies - U.S. Model

• Health insurance plans compete on price, and market forces pressure plans to restrain their premium prices and overall costs.
• Employers, employees, and individuals are more cost-conscious in choosing plans.
• Weakness: the U.S. has not controlled costs or quantity of care successfully, which results in rising insurance plan premiums.
• C = P x Q
• Competitive bidding for contracts/services can be initially effective.
• States with highly regulated or competitive pricing have had some success in controlling hospital service prices.
• limits to success: Insurers shift costs to other payers.

Quantity Controls (Utilization)

• Changing the unit of payment
• Patient cost-sharing
• Utilization management
• Supply limits
• Controlling the type of supply
• Paying at point of purchase for premium payments.
• Point of service-utilization
• Individuals with cost-sharing plans made 1/3 fewer office visits and had 1/3 the rate of hospitalization.

Utilization Management

• Insurers examine physician behavior and service use as a micromanagement approach.
• Movement is currently away from individual case examination to practice profiling.
• Controls are put on the number of providers and material resources.

Impact

• Supplier-induced demand is affected by quantity.
• This is displayed by a large variation across the country in the number of elective operations and invasive procedures due to the number of surgeons and cardiologists.
• A built bed is a filled bed.
• Supply limits require physicians to prioritize services based on appropriateness and patient need.
• Impact: controlling the number of generalists vs. specialists • Lower income and less resource intensive style of medicine
• Macro management addresses capacity and budgets.
• paying by capitation or aggregated methods
• limiting size and specilaty mix of providers
• focusing on quantity, more costs exist in areas with more specialists and hospital beds
• decreasing administrative waste.

Reducing Quantity

• Stop doing things with no proven clinical benefit.
• Eliminate ineffective/inappropriate care such as long bed rest after stroke.
• U.S. administrative expenses account for 15-25% of health care expenses.

Issues of Controlling Cost

• Prevention programs may cost more than treatment.

Chapter 13: Quality

(Focus on slides, use text to reinforce/help you fully understand slides).

• Primary reasons why quality is lacking in the U.S.:
• Lack of access to care
• Practice variations
• Higher volumes (office visits, hospitalizations, tests, procedures) OR more COSTLY specialists, tests, procedures, and prescriptions than are appropriate
• The quality of care is better when there is a heavy burden of uncompensated care,More primary care physicians was strongly associated with less overuse.

Inefficiency and Waste

• Include waits and delays, operating room throughput, post-operative intubation time, and medical record availability.

Underuse of Effective Care

• Underuse of statins, beta-blockers, and ACE inhibitors after a heart attack due to cost.
• Underuse of controller medication in pediatric asthma.

Misuse and Errors

• Cost U.S. health care system $20 billion each year.
• Approx. 400,000 hospitalized patients experience preventable harm each year.
• There are over 200,000 medical errors that result in death each year Never events include:
• Surgery on the wrong body part or wrong patient
• Wrong surgery on a patient
• Foreign object left in patient after surgery
• Death/disability associated with intravascular air embolisms, incompatible blood, or hypoglycemia
• Stage 3 or 4 pressure ulcers after admission
• Death/disability associated with electric shock, a burn incurred within facility, or fall within facility

Donabedian's Quality Assessment Model

• Composed of process, structure, and outcomes. Structure includes facilities:
• licensing and accreditation - Joint Commission
• Number of personnel or hospital beds/1,000 population and equipment.

Process includes:

• actual delivery of services
• interpersonal aspects of care - communication, respect, and dignity
• technical aspects of care - diagnosis/treatment and cost of services.

Healthcare Effectiveness Data and Information Set (HEDIS)

• It evaluates the quality of health plans operating in the U.S. by comparing performance and publicizing information to clinicians.
• Performance indicator: children immunization, mammograms, pap smears, prenatal exams, eye exams for diabetic patients, osteoporosis screening, flu shots, BMI Assessment Methods to achieve malpractice reform • Improving quality includes
• continuous quality improvement: ongoing effort to reduce waste
• rework and complexity.
• clinical practice guidelines-explicit descriptions representing preferred clinical processes like evidence-based practice.
• quality report cards-for specific health plans or institutions.

Proposals to improve quality measures include:

• Licensure, accreditation, peer review
• Clinical practice guidelines
• Measuring practice patterns
• Public reporting of quality
• Electronic health records
• Artificial intelligence
• Interdisciplinary teams,
• continuous quality improvement
• Balancing payment incentives

Pay for Performance

• It is aimed at encouraging improved quality of care in all health care settings where Medicare beneficiaries receive their health care services

Chapter 6: Medical Ethics Review

(Text and slides are relevant to the concepts noted below).

• Clinical ethics focuses on the analysis and resolution of ethical challenges in patient care.
• Shared decision-making is a goal to incorporate respectful & educated clinician-patient relationship.
• The Principle of rule based approach= good for good itself (it is always right to tell the truth)
• Codes of ethics for professional organizations: AMA, ASHA, APTA, ANA

Principle or Rule based approach: • Autonomy=a capacitant individuals right to make descions for themselves • Beneficence=to do good for the patient • Non-maleficence=to do no harm to the patient Justice=fair and equitable treatment for each individual

• Casuistic approach is using a paradigm case against which similar cases are weighed.

Clinical Decision-Making Models-Four-Box Model

• Stay above the double line.
• Rationing by medical effectiveness and equal opportunity. Concept- distributive justice

Medical (Clinical) Indications involve:

• Goals of medicine that are clinically important.
• Efficacious and taking into account the medical history, accurate diagnosis, accurate prognosis and all treatment options.

Patient Preferences

• Examination of the patients ability to participate in decision-making
• Patients personal history, religious and personal values communicated preferences, advance directives, and self-assessed quality of life are all relevant here.

Quality of Life

• Is considered third party assessment (whose responsibility is it to decide when the patient cannot?).

Contextual Features

• External issues to consider such as economic constraints, family preferences, burdens on caregivers, other psychosocial parameters, and legal issues.

Patient Self-Determination Act

• All healthcare facilities that receive medicare and medicaid reimbursement are required to ask patients if they possess advance directives.
• Provide patient education regarding their rights in relation to these documents.
• Competence is assumed.
• DMC (decision-making capacity)- assess a patients ability to make authentic, self-determining decisions (task specific).

Has DMC if:

• Can comprehend the clinical information being presented regarding their condition

• Can understand each of the treatment or NON-treatment options and their consequences

• Has the ability to make and communicate a choice

• Can demonstrate a rational thought process in weighing the risks and benefits in relation to their personal, authentic values. Two types of advanced directives are used most • Legal document that allows an individual to state their wished for future medical decisions under certain qualifying conditions:

• Living will- written requests to forego life-sustaining treatments in the event of a terminal condition when the patient lacks DMC

• Durable power of attorney that helps to indicate how you would like your care to be given

• Informal agreements also apply.

• surrogate decision-makers One who has the moral and legal authority to make decisions for an individual who cannot make decisions for themselves.

• Making decisions the patient would have, based on their values and preferences is Substitute judgment

Meaningful language:

• Withholding and withdrawal of treatment

Informal agreement obtained from a person who is unable to fully participate:

• Informal agreement is obtained from a person unable to participate but able to provide a preference with the medical agreement

Informed consent:

• A patient is informed of the risks and benefits of a proposed diagnostic procedure or treatment as part of a health provider process.
• Refusal of treatment is the right of adults with DMC, even life-sustaining treatment.
• A surrogate decision-maker has the right to refuse medical treatment for a non-capacitant individual provided the decision is made based on the patents values, expressed wishes or in their best interest.

ACA: National Health Reform

(Slides and Chapter 16 text). The 4 Main Components of Reform are ACA:

• individual mandate
• employer mandate
• medicaid market expansion
• insurance regulations.

Employers must offer insurance or they will face approximately a $2000/employee penalty, excluding the first 30 employees.

The following is what the main components of ACA Reform cover:

• individual mandate is required but you pay a penalty
• employers with 50 + employees must provide coverage
• Medicaid can expand to cover more low income individuals

Small Business Tax Credits

• A small business with less than 25 employess and has an average annual wage under $50,000 will receive 35% to employ health insurance.
• This is designed to encourage small businesses to provide health coverage
• Taxing People Without Coverage: The original penalty was $695/year or 2.5% was eliminated in 2018 Higher Taxes applies to higher-income individuals as well (0.9% tax) and unearned income (taxed at 3.8%).
• Excise tax on insurers that offer costly health plans ($10,200 to individuals and $27,500 for families).

Medical Device Tax

• It is a 2.3% amount. Marketplaces should be able to look and buy between private and health insurance plans There are four tiers based on what coverage type:
• Bronze at 60 percent
• Silver at 70 percent
• Gold 80 percent and finally platinum at 90% The Centers for Medicare and Medicaid innovation helps to come to a cost-saving strategy. Generic drugs and strong fraud can help with Medicare savings, as can stronger fraud measurements.