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With these changes in place, Medicare enrollment in HMOs increased rapidly to a level of about 1. The average hospital occupancy rate, 66 percent, is lower in the United States than in other OECD countries, however this rate varies and may be 40 percent or lower in rural areas American Hospital Association, ; National Center for Health Statistics, Advantages of employer-based approaches either a mandate or play or pay include expanding, rather than replacing, the current employer-based insurance system to uncovered workers thereby reducing the current problem of cost shifting.

In the past, most high-technology equipment was purchased by hospitals. Health reform in the s and s In recent years, health reform in the United States has focused on controlling rapidly rising health costs and increasing financial access to health care.

A layman’s guide to the U.S. health care system

However, for two key reasons, growth then leveled off. They have found that the incidence of inappropriate use of such expensive and potentially dangerous procedures as coronary artery bypass surgery accounts for between 20 and 35 percent of care Chassin et al. Various systems to improve data and to coordinate data systems are under development.

Although Federal and State mortgage loan guarantee programs assist some hospitals to secure financing for construction and renovation projects, it is more common for hospitals to secure private mortgage insurance when floating a construction bond. As a result, hospitals engage in what has been called a medical arms race, in which each competes to own state-of-the-art technology. Health outcomes Despite the highest health expenditures in the world, the United States does not perform particularly well in terms of gross health outcome measures.


Employer mandates have not resulted in significant problems in Hawaii for a variety of reasons, including a history of employer paternalism employer-provided health benefits were widespread prior essentisls the State mandateand the State’s geographic isolation that prevents employers and health care providers from easily moving to a different State.

Industries with strong unions e.

If RBRVS is broadly adopted by private payers, the ability of physicians to recoup revenue by increasing charges to other payers cost shifting—a dynamic that also applies to hospitals under PPS would be significantly reduced. The Quadrennial Commission recommended a series of demonstrations in the States prior to fundamental reform at the Federal level Advisory Council on Social Security, Employee Benefits in Medium and Large Firms, Inthe Medicare system of paying physician charges was changed to a resource-based relative value scale RBRVS to be phased-in starting in The fear of a malpractice suit is said to induce doctors to order unnecessary tests and services.

Studies suggest that HMOs can save about percent compared with FFS insurance, primarily by reducing inpatient hospital days Manning et al.

Bureau of the Census, b. However, critics argue that the proposal does not guarantee universal coverage, and hence the problems surrounding the uninsured will not be fully remediated. Medical malpractice Another alleged source of excessive health spending is the high cost of medical malpractice premiums and defensive medicine.

Current Population Survey File. In fact the majority of the uninsured 75 percent are employees or their dependents Short, Monheit, and Beauregard, These data help to identify efficient providers with whom the purchasers should contract, and inefficient providers who should be excluded.

Essentials of the U.S. Health Care System, Second Edition

However, critics argue that employer-based approaches will increase unemployment as employers, particularly small businesses, are forced to lay u.s.heakthcare workers because they cannot or choose not to incur the tax or the cost of health insurance. One recent study of a PPO found that enrollees syshem it for preventive care and minor illnesses, but went outside the network about one-half the time for specialty care and hospitalization without surgery Wouters and Hester, Because HMOs and similar entities receive a fixed payment in advance for each enrollee, regardless of actual utilization, they have strong incentives to control costs by limiting utilization, whereas the risk of underutilization is moderated by the entity’s need to maintain membership.


The elderly were generally considered to be uninsurable or bad risks by the private insurance market. Tracing Medical Costs to Social Problems. House of Representatives, The new Medicare benefits were beneficiary-financed, first through an increase in Medicare Part B premiums affecting all enrollees, and also through a surcharge on the income taxes of high-income elderly.

However, it has been defended as achieving greater equity among the poor by giving a smaller but higher priority benefit package to a larger group of people, and allowing explicit public participation in publicly funded health insurance choices.

H and H Music Co. Some rural areas of the country have excess hospital capacity combined with a paucity of physicians.

Chapter Quizzes

Coverage under Part A includes inpatient hospital care, very limited nursing home services, and some home health services. A critical appraisal; pp.

InCongress changed the structure of Medicare payments from a retrospectively adjusted cost-reimbursement system to a prospective, risk-based one.

There are more than 1, private health insurance companies providing health insurance policies with different benefit structures, premiums, and rules for paying the insured or medical care essentilas.

A layman’s guide to the U.S. health care system

If physicians exceed the goal, they can be penalized in a future year by receiving a lower payment update than they otherwise would have received. These systems budget hospitals either by establishing payment rates for the treatment of each patient as in PPS, no matter who pays hence the term all-payeror by directly establishing annual budgets. It covers preventive, acute, and long-term care services for 25 million people, or 10 percent of the population.