MHA5030 WEEK 5 DISCUSSION AND PROJECT INSTRUCTIONS

2

MHA5030 WEEK-5 LECTURE NOTES

Different Approaches to the Role of Government

Just as every country has differences, they also have differences in the way they involve government in the financing and delivery of health services. Views differ on the proper role of government in the healthcare sector. One area where countries seem to agree is that government should have a strong role in the monitoring of health services and making health policy. Contrarily, most would also agree that the production of medical supplies (i.e. gloves) should be left to the markets. You have the extremes of the potential for great competition among producers of equipment while the measuring of information is straightforward. With these two extremes, the proper degree of government involvement is not obvious.

The four models that show how government interaction can take place are:

1. Parallel Public and Private Systems – separately privately financed system exists as an alternative to the public system 

2.  Copayment – Financing for a broad range of services is partially subsidized through public payment, with the remainder financed through out-of-pocket payments and private insurance

3.  Group Based – Certain population groups are eligible for public coverage; others rely on private financing 

4.  Sectoral – Certain healthcare sectors are entirely publicly financed; others rely much more heavily on private finance

Government can play a role in all four areas: Structure of the system; nature of coverage and delivery; control of input supply; and control of expenditure.

Each approach has its pros and cons.

Additional Materials

From your textbook, The Economics of Healthcare Revisited, read the following chapters:

· Chapter 12-Healthcare Systems in Developed Countries

From the South University Library, read the following articles:

· Cavalieri, M., & Ferrante, L. (2016). Does fiscal decentralization improve health outcomes? Evidence from infant mortality in Italy. Social Science & Medicine, 16474-88. doi:10.1016/j.socscimed.2016.07.017

· Schneider, S. M., & Popic, T. (2018). Cognitive determinants of healthcare evaluations – A comparison of Eastern and Western European countries. Health Policy, 122269-278. doi:10.1016/j.healthpol.2017.12.012

· Wang, H. (2009). A dilemma of Chinese healthcare reform: How to re-define government roles?. China Economic Review, 20(Symposium on Health Economics Issues in China), 598-604. doi:10.1016/j.chieco.2009.04.001

Provider Payers

The system used in the United States does not have a statutory requirement coordinating provider payment. Each insurer establishes its own provider payment mechanism. Even insurers with similar systems (i.e. fee-for-service), the amount they pay may differ.

Contrary to the U.S. System, an All-payer system, where all insurers pay providers the same amount. As example of an all-payer model is the system used in Japan. In their system the fee schedule sets the price for procedures, drugs, devices, etc. and it applies uniformly to all plans for reimbursement to virtually all hospitals and physician’s offices.

In some all-payer systems government regulators establish the budgets or fees (i.e. France). In Germany the government is less involved. Germany has a consortium of sickness funds that negotiates joint rates with hospitals. These rates are increasingly based on DRGs. In countries like this, the rates are the norm for physician payment as well.

All-payer advantages:

· Less economic incentives for providers to favor one type of patient

· Inability of providers to cost-shift

·  More simple and less costly

The main disadvantage for all-payer systems have is that all providers tend to receive the same payment regardless of their skills or the quality of care delivered. Therefore, other ways of rewarding providers are needed.

Hospital and physician payment are two areas where governments may need to intervene in the marketplace. The U.S. led the way in paying hospitals a fixed amount for an entire patient stay. It did not take long for other developed countries to follow.

The DRGs have been the basis for pay in the U.S. Looking at the DRGs and Global Budgets to pay hospitals lead to their own controversies. As far as physicians go, fee-for-service remains the most common method of compensating physicians in developed countries. You may also have some hospital physicians on salary while primary care physicians n England are paid using capitation.

Examine the specifics of payment further in chapter 12.

Additional Materials

From your textbook, The Economics of Healthcare Revisited, read the following chapters:

· Chapter 12-Healthcare Systems in Developed Countries

You can break items with an h3 subhead

From the South University Library, read the following articles:

· Twedt, S. (2016, March 31). Medicare testing new payment model in the Pittsburgh region. Pittsburgh Post-Gazette (PA).

Access to Care

As long as there are individuals who need care there will always be the question of access to that care. Much of the questions will revolve around how access is defined. Diving in a bit deeper into that concept leads us to compare countries and coverage rates and other measures of access or utilization. Many will look at insurance coverage rates among different countries as if they are apples-to-apples comparisons. Regardless of the country, we must understand the differences in systems, etc., prior to equivocating measures.

Access deals with insurance coverage. Regardless of sources, public or private, access is thought to be simply tied to insurance. This is not necessarily the case. Those who are uninsured could pay for healthcare themselves, or they can use the safety net of facilities and providers designed to serve the poor and uninsured.

Insured individuals may still face access barriers if, for example, the supply of medical personnel, facilities, and technologies is insufficient to serve the population. Remember, in the United States those who are uninsured are more likely to report barriers to access than those who are insured.

Additional Materials

From your textbook, The Economics of Healthcare Revisited, read the following chapters:

· Chapter 12-Healthcare Systems in Developed Countries

You can break items with an h3 subhead

From the South University Library, read the following articles:

· Caldwell, J. T., Ford, C. L., Wallace, S. P., Wang, M. C., & Takahashi, L. M. (2016). Intersection of Living in a Rural Versus Urban Area and Race/Ethnicity in Explaining Access to Health Care in the United States. American Journal Of Public Health, 106(8), 1463-1469. doi:10.2105/AJPH.2016.303212

· VanGarde, A., Yoon, J., Luck, J., & Mendez-Luck, C. A. (2018). Racial/Ethnic Variation in the Impact of the Affordable Care Act on Insurance Coverage and Access Among Young Adults. American Journal Of Public Health, 108(4), 544-549. doi:10.2105/AJPH.2017.304276