Healthcare Reimbursement, Essay Example

The U.S. healthcare sector is faced by eminent collapse because it is unsustainable and indefensible (Gerald 2008). The imminent collapse is clearly shown by the following facts: first the universal coverage is not affordable and hence the system leaves 47 million Americans uninsured. This is because high costs of insurance cause instability on the voluntary, private, and employer based system because increases in cost means purchasers limit coverage or increase the amounts they charge their workers hence the workers choose not to be covered.

The rules of enrollment in government and private programs result in millions of Americans going without health care coverage, including children. The U.S. Census Bureau estimates that 45.7 million Americans (about 15.3% of the total population) had no health insurance coverage at some point during 2007(Us census Bureau, 2008) .This was mainly due to affordability constraints. International comparison by the Commonwealth Fund showed that among adults surveyed in the U.S., 37% reported that they had foregone needed medical care in the previous year because of high costs. They either avoided seeing a doctor when sick, or skipped medications or avoided other recommended care. The rate was even higher, 42% among those with chronic conditions. The study reported that these rates were well above those found in the other six countries surveyed: Australia, Canada, Germany, the Netherlands, New Zealand, and the UK (Health Affairs, 17) in this study it was also found that 19% of U.S. adults surveyed reported serious problems paying medical bills, more than double the rate in the next highest country.

Second the U.S. system is in fact a not homogeneous, it is an incoherent pastiche that has long repulsed reforms sought by private and public stakeholders and the last evidence is the extremely high health care costs Separate legal entities offer health care service in United States. United States is the nation that spent highest amount of money and resources for its healthcare requirements. The costs on pharmaceuticals and other expenses are so high that a good percent of the GDP is streamed to the health care sector.  United States spends 16%of it s annual gross domestic product on health care compared to a country like France which is capable of providing cover for its population at only 11%GDP (Gerald 2008). State budget deficits and federal cuts result in reduction in Medicare and Medicaid programs and employees are devoid of employment-based benefits.

The out of pocket health care expenditures represent consumers’ rapidly growing burden both in terms of their fast growing size and the unavailability of financing options to address them. while  there re many  finance companies which  re ready  to provide credit for discretionary medical expenses , the  funding sources  available to consumers who need money to pay for necessary  medical  procedures re few. These consumers re often forced to rely on regular credit cards after which they turn to other sources like retirement savings , home equity,  friends and family when they reach their credit limit. Flexible spending accounts and health savings accounts have assisted consumers save money to meet their medical expenses to a limited extent however the need for more solutions far outweighs the capacity of this program. Retail clinics, which offer affordable basic medical services in a retail setting, have been of help somewhat but they cannot address high cost medical treatments related expenses.

a study carried out to evaluate of the effect of a prospective payment method on hospital charges and  the mixture of services offered to a group of Medicare patients  with mental disorders who were treated  in general acute care hospitals in Maryland showed  that per case reimbursement have the advantage of providing  incentives to minimize  the cost one sty t  hospital however  this  reduction in cost  is possibly offset by  higher  charges upon readmission or by higher readmission rates . This study focused on per case reimbursement, in which hospitals are guaranteed a level of grand revenue depending  on the number and case mix of discharges then  evaluated its impact  on hospital charges during an index admission and  non- hospital and hospital  charges for period of  three month after the  index admission. The authors concluded that  there was not significant impact of  the per case payment method on the grand  cost of mental health care over a specified period of time but  the payment method  seemed to  influence the pattern of  health care.

Reimbursement Policies of Healthcare and How They Impact on Acute Care Hospital Especially in Managing Pain in Cancer Patients

Many people at one time will need services to manage pain due to the widespread existence of cancer as well as other pain causing conditions. Therefore access to prescription drugs, medical equipment and professional services is very vital in getting sufficient management of pin. In America, who to access these services and products is determined by the capability of paying for the services and insurance coverage

Coverage Problems

There are four classes of insurance cover for the Citizens of the United States these are the underinsured, the uninsurable, the insured and the uninsured.  Uninsured citizens’ access to health services is limited because of the little ability to pay.  Estimates show that the number of medically indigent citizens under the age of 65 years in America ranges from   31 to 40 million. The poor who do not qualify for Medicaid services make the biggest number in this (Earnest, 1990). The American Cancer Society  argue that  low income citizens go through  greater cancer  pain and suffering compared to other citizens in the united states (The American Cancer Society , 1989). The classes of underinsured have insufficient an income to cater for insurance costs, services and deductibles costs which are not under coverage of their policies.  Approximately 80 million citizens fall under this group Earnest (1990). Citizens under the category of uninsurable are prevented from getting the insurance policy however they have chronic diseases which need high cost care .The minorities also get disproportionate representation in these classes of uninsurable and the underinsured (Earnest, 1990).

In addition to addressing other health care problems healthcare reforms main focus is ensuring that these groups get insurance cover. The present system may appear to be comfortable for those who have insurance cover but the reality is that they also do not get enough from this coverage. For instance, acute cancer pain management needs therapy from drugs. Unlike the U.S government which covers about 12% of prescription drug costs only, in many industrialized nations the government covers almost all costs of the drugs prescribed. Often the health insurance cover limits ambulatory care (Lyles$ Steinwachs 1991). Coverage is seemingly insufficient especially for older Americans who often rely on incomes which are fixed and therefore they require sufficient medical cover in order to get relief from pain. Reports from The American Association for Retired Persons (AARP) show that people over the age of 65 years incur more expenses in purchasing prescription drugs than people of 45 to 64 years of age (AARP, 1992). In addition, the rate at which prices of prescription drugs is increasing has surpassed the increase in purchasing power of the aged (Special Committee et al., 1992).

Reform Issues in Management of Pin

Medicare

Cover for drugs prescribed to outpatients is not included in Medicare coverage.  Proposals to have prescription drugs coverage included in the legislation of national healthcare reimbursement which include Medicare have been made. In the present system Medicare caters only for medication prescribed by a practitioner incidentally and the aged are often forced to absorb medications costs managing pain in an outpatient setting.

The fact that there is coverage if such patients get an inpatient service can result in the aged patients with cancer being admitted to the hospital because to show there is reimbursement without even making considerations of the patients medical needs.

A patient may be reimbursed for PCA morphine which cost $4,000 but lack coverage for orally administered solution of morphine costing $100 (Ferrell 1993). The need   to have prescription included in the coverage is therefore a core reason as to why most recipients of Medicare purchase the additional insurance called Medicare Supplemental or Medigap to supplement Medicare cover (AARP, 1992). Hospice care: this type of insurance cover provide pain management and palliative care for dying people.  Data from some sources show that hospice patients receive care of better quality than those patients who receive conventional care (Rhymes, 1990).

According to Rhymes (1990),   fewer people than anticipated have been able to use hospice care  because of various reasons : one is because  the hospices getting certificate of Medicare re few , second,  hospice admissions has restrictions , Medicare limitation and the fact that people are ignorant when it comes to hospices .the  law requires  hospices to provide pain and palliative care of high  quality no matter whether the cost is higher than  per each reimbursement therefore increasing  costs for analgesic medication may impact on  hospice  expenditure plans , cause advanced screening during  admissions and limit some services  (Health Care Financing Administration, 1990).  Incapable hospices who cannot utilize the advantages of hospital charging have switched to the possibilities of making purchases as group (Beresford, 1992).

Medicaid sources its funds from both the states and the federal government. It is the core insurance program available to the public especially for families with low income the disabled, the blind or members belonging to families who have children who are dependent. In the 1990 Reconciliation Act of the Omnibus Budget the Medicaid drug rebate law sought to give respite for professionals in the field of pharmacy, which had raised the brunt of programs for containing drug cost programs .This act also aimed at ensuring   that drugs re accessible  through the provision  state programs which had  rebates.  Most states give their citizens cover for a variety of analgesic drugs with some having enlarged drug coverage for the aged (Martin, 1991).

Although approximately a quarter of Medicaid programs have restrictions on drugs. A review by Soumerai and colleagues (1991) on studies which show the reform policies affect clinical costs and outcomes showed that state caps on the prescription numbers decreased the use of analgesics by chronically ill disabled patients. Such restrictions increase the risk of medication becoming unaffordable as well as the risk of having aged patients’ go to nursing homes.

Health maintenance organization the number of citizens said to have complete cover of pharmaceutical range from 80 to 95 percent under Health maintenance organizations (HMOs) coverage   however HMOs still exert controls on dispensing and prescribing (Anderson & Dunn, 1991). The HMO coverage my offer benefits on drugs prescribed to outpatients   with either co-payment through riders which are extended from standard plan) or in a standard plan itself both of which may not include certain medications and restrict quantities (Anderson & Dunn, 1991).

Private Insurers

High competition among insurance companies in the private sector as well as cost-containment measures was borne in 1990s .The extent to which every carrier of privte health insurers make reforms on prescription medications is not known although it is known that there is considerable variation in the policies with some states allowing the sale of empty policies whose general focus is to provide disastrous coverage instead of providing coverage for prescription drugs. Several policies of health insurers’ offer very little coverage for medications prescribed to outpatients which include   analgesic drugs.

Review by Anderson and Dunn (1991) on the disclosing HMOs practices  in marketing found that there re often benefits of  restricting  prescription medication however the benefits are not explained fully in materials used for promotion. Moreover motivation is not sufficient to have such benefits described because there are no laws requiring such disclosure.

Other Issues Regarding Management of Pain

Prescription in Restricted Quantities

According to Joranson (1990), several states put restrictions on the dosage units’ number for controlled substances which can be dispensed to a limit of 100 units. It is obvious that the restriction my have negative effects in managing pain.  The Wisconsin Cancer Pain Initiative of 1991 worked in conjunction with state regulatory boards towards the successful elimination of Wisconsin’s restriction which allowed a dosage of 120 units.

Some policies of insurance also require that pharmacies make orders through mils which provide guidelines on the restriction number of units that make complete dose which is dispensed without considering prescriptions by the physician be used. A practitioner from India has given reports that patients re often forced to ration pain relieving medication because delivery dates re uncertain and may make them experience  pain before the package with the medication reaches them (Joranson, 1990).

Issues Concerning Pharmaceuticals

most pharmacies bare prescriptions costs themselves till they get reimbursed. There is delay in  reimbursement  made by Medicaid and hence some pharmacies re closing down due to lack of liquid  cash  and consequently blocking patients’ access to these products and services (Illinois Pharmacists Association, 1991). In Illinois, it was reported that in Illinois the period before reimbursement exceeded 100 days (Reutzel, 1991).despite the additional record keeping and security costs on controlled substance prescription drugs, pharmacists re often forced to purchase these drugs at small  discount or without it completely. These unreimbursed pharmacy costs may be shifted to patients who rely on csh payment (Kreling, 1991).  Despite the demonstration of the value of techniques which employ behavioral pain management, the underinsured and uninsured patients’ access to these treatments is limited in general. Only certain specific techniques may be under insurance cover. In addition they vary depending on whom the service is offered to; that is if it’s offered on inpatient or outpatient basis as well as the insurance policy.

Conclusion

The net impact of healthcare reimbursements on the sector of acute care sector not well understood and there are possible variations in size and way forward Health systems and individual hospitals. Fitch revised the outlook of insurers’ reflects the financial stress which is likely to occur as a result of healthcare reimbursement. While there is no doubt that   health care providers would bare the insurers financial stress, the negative push that may be exerted by the reforms could be mitigated by potential positive reform elements like fewer uninsured.  Fitch’s negative views for the acute care sector dates to the beginning of 2009.  In huge measures because of the present recession pressures and also the uncertainty of the healthcare reimbursement mandate that came with introduction of a new administration. The numerous proposals suggested at present do not have definite timetables for implementing the reforms as well as clarity and Fitch believes that it will take some years to have major reform changes implemented. the various proposals on health care target the removal of charges from the health care system and provision of wider access to insurance cover as well as quality improvement directly have raised concerns in the health sector however it is not very clear how changes in the methodology of reimbursement like bundled payments, disproportionate share payments, changes restricted to quality and charity care would impact on position of hospital individually in terms of quality of services. Considering these reforms as making part of the several proposals, health care systems with specific features will be better placed to adopt and get benefits in the environment following reforms. These features include high integration levels and solid strategies by physicians, being able to measure and produce very good results and positions that are cost favorable in relation to competitors, financial flexibility and scale to gain sufficient reductions in reforms and  the same time not destroy financial stand  severely.  Providers of acute care have shown capability to consolidate, reduce and adjust Services and look for extra effectiveness to maintain financial viability at a time when there are industrial changes and pressures. In addition, viability of stimulus funds for qualified information technology and capital projects, charity care as well as the context of decreased bad debt as more people get health insurance covers the financial effects of healthcare reimbursement on the acute care sector is still unclear.

Due to current rapid changes in economies of countries like the current economic recession, emergency of new diseases with public health concern and rapid spread of the known ones, there is need for countries to design sound health care policies that protect its population against those diseases. To ensure the policy implementation is successful and sustainable, the individual countries should put up a fight against corruption and ensure the policies favor the majority of its population. The world health organization should encourage research on diseases of public health concern and coordinate the designing and implementation of health care policies that favor all in individual countries. A good health care policy is the key to a healthy and productive population (Health Affairs, 2007).

References

American Association of Retired Persons. (1992). Older Americans are pinched by drug costs. AARP Bulletin, 33, 3.

American Cancer Society. (1989). Cancer and the poor: A report to the nation. Atlanta:

Anderson, M., & Dunn, J. (1991). Disclosure of outpatient prescription drug benefits in HMOs. Chicago: Health Affairs.

Beresford, L.J. (1992). Hospices and hospice groups explore ways to “buy smart.” Hospice News Service, 3, 1. Blumenthal, D., & Epstein, A.M. (1992). Physician-payment reform. New England: Journal of Medicine.

Earnest, M. (1990). Access to health care in the United States: Barriers for neurologic patients, challenges for neurologic physicians. Neurology, 14, 1815-1819.

Ferrell, B. (1993). Cost issues surrounding the treatment of cancer related pain. Journal of Pharmaceutical Care in Pain & Symptom Control, 1, 9-23.

Gerard F. et al. 2008. Health Affairs. Harper Perennial : New York.

Health Affairs. 2007. Toward Higher-Performance System.  PMID : London

Health Care Financing Administration. (1990). National Clinical Panel on High-Cost Hospice Care: Summary of panel meeting deliberations. Washington, DC

Illinois Pharmacists Association. (1991). Speak out for pharmacy. Chicago.

Joranson, D.E. (1990). Federal and state regulation of opioids. Journal of Pain and Symptom Management 5 ,.

Joranson, D.E. (1994). Are health care reimbursement policies a barrier to acute and cancer pain management? Journal of Pain and Symptom Management, 9.

Kreling, D.H. (1991). A comparison of pharmacists acquisition costs and potential Medicaid prescription ingredient cost reimbursement in Wisconsin. Journal of Research in Pharmaceutical Economics, 3, 25-53.

Martin, S. (1991). The four-year moratorium on pharmacy reimbursement secured by APHA under the Medicaid drug rebate law is helping pharmacists fight for and win the reimbursement they deserve. American Pharmacist, NS31, 476-478.

Reutzel, T.H. (1991). Hidden costs: A simulation of the effect of a public aid payment lag on community pharmacies. Illinois Pharmacist, 53, 16-17, 23-25.

Rhymes, J.A. (1990). Hospice care in America. Journal of the American Medical Association, 264, 369-372.

Soumerai, S.B., Ross-Degnan, D., Avorn, J., McLaughlin, T.J., & Choodnovsky, I. (1991). Effects of Medicaid drug payment limits on admission to hospitals and nursing homes. New England Journal of Medicine, 325, 1072-1077.

Weiner, J.P., Lyles, A., Steinwachs, D.M., & Hall, KC. (1991, Spring). Impact of managed care on prescription drug use. Health Affairs, 140-153.