Introduction to Health Care and Public Health in the U.S.

1. Introduction to Health Care and Public Health in the U.S. Financing Health Care, Part 2 Lecture c This material (Comp 1 Unit 5) was developed by Oregon Health & Science University, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology under Award Number 90WT0001. This work is licensed under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-sa/4.0/.

2. Financing Health Care, Part 2Learning Objectives - 1 • Describe the revenue cycle and the billing process undertaken by different health care enterprises. (Lecture a) • Explain the billing and coding processes, and standard code sets used in the claims process. (Lecture a)

3. Financing Health Care, Part 2Learning Objectives - 2 • Identify different fee-for-service and episode-of-care reimbursement methodologies used by insurers and health care organizations in the claims process. (Lecture b) • Review factors responsible for escalating health care expenditures in the United States. (Lecture c) • Discuss methods of controlling rising medical costs. (Lecture d)

4. What’s Driving the High Cost of Health Care in the U.S. • Review U.S. health care expenditures and medical inflation • Examine the factors contributing to the increase in health care expenditures in the United States • Describe the Emergency Medical Treatment and Active Labor Act (EMTALA) • Discuss the cost of care to the uninsured

5. Factors Contributing to High Health Care Expenditures • Technology • Increased demand and utilization • Chronic disease • Aging population • Administrative costs • 7% of health care expenditures in the U.S. • Twice the average of other industrialized countries

6. Technology and National Health Care Expenditures • Congressional Budget Office Estimates • 40-50% of total expenditures • Technology in health care • Procedures • Equipment • Processes by which medical care is delivered

7. Technology - 1 • Previously untreatable conditions • Arthritis in hips and knees • New medical and surgical procedures • Angioplasty • Joint repairs/replacements

8. Technology - 2 • Medical devices • Computerized Tomography (CT) scanners • MRI imaging • Implantable defibrillators • Health Information Technology (HIT) • Electronic medical records • Telemedicine

9. Pharmaceutical Costs • Estimated 10% of total health care expenditures • $298 billion in 2014; $40.3 billion 1990 • Average ~12% increase over the last 10 years • Drug costs inflated above Consumer Price Index (CPI)/other health care sectors • Increased availability • Medications for chronic disease • e.g. cholesterol, diabetes • Increased demand • Cancer chemotherapy

10. Administrative Costs • Approximately 7% of annual U.S. health care expenditures • Administrative costs more than twice average of other western industrialized nations • Estimated excess expense = $91 billion

11. Physician/Hospital Costs • Increased demand • Utilization • Positron emission tomography (PET) • Magnetic resonance imaging (MRI) • Techniques • Minimally invasive surgery • da Vinci robotic surgery • Imaging techniques

12. Chronic Disease - 1 • Ongoing, generally incurable, illness or condition • Heart disease • Obesity • Cancer • Diabetes • Preventable/Manageable through: • Early detection • Diet • Exercise • Medical treatment

13. Chronic Disease - 2 • Affects 1 of 2 adults in the U.S. • Accounts for 7 of 10 deaths • Daily activity limitations for 1 in 4 with chronic disease • Obesity major concern and contributor • 1 in 3 adults • 1 in 5 children between ages 2 and 19

14. Chronic Disease and Health Risk Behaviors • CDC: Four health risk behaviors • Lack of physical activity • Poor nutrition and obesity • Tobacco use • Excessive alcohol consumption

15. Prevalent Chronic Diseases • Asthma • Chronic obstructive pulmonary disease • Chronic renal failure • Congestive heart failure • Coronary artery disease • Diabetes • Mood disorders/senility • Cancer • Hypertension

16. Chronic Disease and Increased Demand for Services • Increased Utilization of Services • Management/treatment to decrease risk of complications • For example, aggressive treatment of diabetes to avoid such complications as heart disease, kidney failure, or blindness • Early intervention at risk groups • For example, weight loss, smoking cessation

17. Early Detection and Prevention • Increased Preventive Services • Detection • Screening mammograms • Colonoscopy • Prevention • Immunizations

18. Increased Demand: Aging • Increased utilization of services for chronic illness above age 64 • 1946-1964: 66 million children • Medicare eligibility beginning in 2011 • Additional 10 million enrollees by 2018 • Projected costs > $13,000 per capita with comparable increase in Medicare costs

19. The Uninsured • Receive • Less preventive care • Diagnosed at more advanced disease states • Once diagnosed, received less therapeutic care • Have higher mortality rates • Cost of care is twice as much for uninsured vs. insured

20. The Uninsured 2014 • Enrollment in ACA coverage corresponds with large declines in the uninsured rate • Uninsured rate dropped from 16.2%, last quarter of 2013 to 12.1%, last quarter of 2014 • Barriers: • 48% coverage too expensive • 12% unemployed or not offered through work • 13% ineligible

21. EMTALA • Emergency Medical Treatment and Active Labor Act of 1986 • Legal mandate to offer medical care to all patients regardless of ability to pay • Anyone presenting to an ED must be: • Examined to determine if there is an emergency • Treated until stabilized, discharged to self care or continuing care • Transferred to a facility capable of providing care if the facility is unable to provide the required care

22. ED Utilization and Uninsured • Uninsured care cause for ED overcrowding? • 2008, Weber examined ED use • Percent of uninsured using the ED did not change over 10 years • Non-poor insured with PCP accounted for most increase in ED visits

23. Emergency Department Overcrowding • Lack of key clinical staff a driver of overcrowding • Care provided to uninsured and patients with non-urgent conditions not a cause of overcrowding • Evidence links overcrowding to reduced health care quality and patient safety

24. Financing Health Care, Part 2Summary – 1 – Lecture c • U.S. health care expenditures highest worldwide • Both per capita and % GDP • Factors • Increase demand and utilization • Aging and chronic disease • Technology • Pharmaceutical costs • Administration costs

25. Financing Health Care, Part 2Summary – 2 – Lecture c • EMTALA • Not resulted in increased utilization by the uninsured • Not a major cause of increased utilization of the ED • Uninsured costs • 7% of total health care expenditures in 2004 • Receive less care and treatment, sicker, higher mortality rates

26. Financing Health Care, Part 2References – 1 – Lecture c References Adapted from: DeLia, D., Cantor, J., Emergency department utilization and capacity; The Synthesis Project, Robert Wood Johnson Foundation. Research Synthesis Report 17, July 2009. California Healthcare Foundation. Health care costs 101: reaching a spending plateau? http://www.chcf.org/~/media/MEDIA%20LIBRARY%20Files/PDF/PDF%20H/PDF%20HealthCareCosts15.pdf November 2015. Accessed January 24, 2017. Callahan, D. (n.d.). The Hastings Center Bioethics Briefing Book. Retrieved January 24, 2017, from http://www.thehastingscenter.org/uploadedFiles/Publications/Briefing_Book/health%20care%20costs%20chapter.pdf Centers for Medicare and Medicaid Services. National health expenditure accounts. https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NHE-Fact-Sheet.html. Updated December 2, 2015. Accessed January 24, 2017.

27. Financing Health Care, Part 2References – 2 – Lecture c References Fisher E, Bynum J, Skinner J. The Policy Implications of Variations in Medicare Spending Growth. The Dartmouth Atlas: The Dartmouth Institute for Health Policy and Clinical Practice Center for Health Policy Research, February 27, 2009. Available at: http://www.dartmouthatlas.org/downloads/reports/Policy_Implications_Brief_022709.pdf. Accessed January 24, 2017.  Robert Wood Johnson Foundation. Available at: http://www.rwjf.org/. Source for health issue research and health policy. Accessed January 24, 2017. The Congress of the United States Congressional Budget Office. Washington DC: 2008 [cited July 31, 2010]. Technological Change And The Growth Of Health Care Spending. Available at: http://www.cbo.gov/ftpdocs/89xx/doc8947/01-31-TechHealth.pdf.Accessed January 24, 2017. 

28. Financing Health Care, Part 2References – 3 – Lecture c References The Peterson Center on Healthcare and the Kaiser Family Foundation. Menlo Park, CA (2016) Health costs. Available from: http://www.healthsystemtracker.org/. Provides background information, links to key data and policy information on US healthcare costs. Last accessed January 24, 2017. Weber EJ, Showstack JA, Hunt KA, et al. “Are the Uninsured Responsible for the Increase in Emergency Department Visits in the United States?” Annals of Emergency Medicine 52(2): 108–115, 2008.

29. Introduction to Health Care and Public Health in the U.S.Financing Health Care, Part 2Lecture c This material was developed by Oregon Health & Science University, funded by the Department of Health and Human Services, Office of the National Coordinator for Health Information Technology under Award Number 90WT0001.