Nurses have a responsibility to be aware of how the cost of
healthcare impacts clients’ choices and well-being. Healthcare-funding issues
are constantly in the news, and cuts threaten the health of our nation. As
healthcare expenditures continue to rise, both government and private payers of
healthcare costs are pursuing various methods of cost containment.
Modern reforms began in the 1980s when the Medicare payment
system for inpatient healthcare services changed from a cost-based
retrospective payment system to a prospective payment system based on
diagnosis-related groups (DRGs). This change meant that reimbursement for
services followed specific guidelines and restrictions, including the
requirement of prior approval for treatment. Since then, many changes and
upgrades have been made in this payment system, such as all-patient refined DRGs
(or APR-DRGs) and severity DRGs, to better reflect the complexity of a client’s
condition or care needs; however, reimbursement still remains below billed
costs. Now, as a result of budgetary concerns, most states are considering or
have already developed options to similarly curb Medicaid reimbursement. These
changes have widely affected both access to healthcare and healthcare delivery
systems.
One of the most far-reaching solutions for cost containment has
been the implementation of managed care services and the building of health
maintenance organizations (HMOs) or physician provider organizations (PPOs).
The high prevalence of unhealthy behaviors of healthcare consumers (such as
smoking, lack of exercise, poor dietary habits, and obesity) causes concern for
healthcare policymakers as well as healthcare providers. In some managed care
systems, special financial incentives (such as paid health club memberships,
substance abuse programs, smoking cessation programs, etc.) are provided to
consumers to promote health or to manage their disease risk factors. The
expectation is that health promotion will reduce future healthcare
expenditures.
Healthcare financing will always be an issue. In the United
States, healthcare has largely been based on employersponsored insurance
coverage, which has seen a significant increase in the average premium levels
for individual coverage accompanied by a decline in the percentage of eligible
privatesector employees enrolled in health insurance programs (State Health,
2006b). The high cost of insurance has prompted many employers to pursue other
methods of providing benefits, such as self-funded insurance plans in which the
employer sets aside funds to pay for anticipated employee healthcare claims
instead of paying premiums to a health insurance carrier. This method reduces
overhead costs and permits employers to try innovative approaches, such as
on-site walk-in clinics managed by nurse practitioners.
Most insurance plans require preauthorization for services
and/or procedures based on established protocols. In addition, they encourage
early discharge from hospital care, preferring to provide payment for
outpatient healthcare providers with whom they have contracted services.
Service fees are also subject to capitation, which means
providing services for a preset fee regardless of actual cost. This affects
both the healthcare provider and the healthcare consumer. Healthcare providers
must pick and choose between procedures and treatments they deem necessary and
those that the client can pay for, whether by their insurance plan or out of
pocket. Many healthcare providers have been unable to operate their businesses
under the reduced payment for services resulting in the provider limiting
services offered or leaving private practice altogether. Inversely, many
healthcare consumers are unable to pay for services not included in their
insurance plans or cannot afford the high premiums required to maintain health
insurance.
Thus there are a rising number of underinsured and uninsured
healthcare consumers impacting both access to healthcare and the cost of
healthcare. Studies have shown that adults who lack health insurance coverage
are more likely to rate their health status as poor or fair and are less likely
to receive preventive services and cancer screenings than adults with insurance
(State Health, 2006a). Uninsured individuals are more likely to seek healthcare
from hospital emergency departments. The high cost of emergent care has
required some hospitals to engage in cost-shifting to cash or self-pay clients,
or in some cases, to even close emergency departments.
Major disparities exist in health and healthcare based on socioeconomic
status, race, ethnicity, and insurance status. Disparities in risk factors and
morbidity also exist and vary by race and ethnicity. Socioeconomic status,
health practices, psychosocial stress, limited resources, environmental
exposures, discrimination, and access to healthcare are all issues that the
policymakers and the healthcare profession must address (Health, United States,
2007).
Nurses need to be familiar with the agencies that are involved
in the trends and responses to healthcare reform. The Centers for Medicare and
Medicaid Services (CMS) has a strategic action plan entitled “Achieving a
Transformed and Modernized Healthcare System for the 21st Century.” The CMS
vision of modernizing healthcare will have a huge impact on the recipients of
nursing care. Specific areas of concentration of the CMS strategic plan
publicized by the U.S. Department of Health and Human Services (HHS) include:
1. implementing the Medicare Modernization Act successfully by
energizing broad participation, emphasizing preventive care, reaching out to
those eligible for low-income subsidies, and stimulating a competitive market;
2. modernizing Medicaid to ensure program dollars are used
appropriately, to make consumers more cost-conscious, to tailor benefits to
need, to allow home and community care for the elderly and persons with
disabilities, and to stop inappropriate intergovernmental transfers;
3. creating workable methods of rewarding healthcare providers
for positive outcomes; and
4. positioning HHS at the forefront of the health information
technology interoperability movement.
Legislation related to these initiatives will impact nursing and
healthcare and requires that nurses be involved.
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