Running Head: KOT 1 KOT 1 Task 2 734. 3- Organizational Systems & Quality Leadership 734. 3. 4: Healthcare Utilization and Finance A1. MEDICARE PART A The discussion with Mrs. Zwicks’s daughter about coverage requirements needs to be informative and easy to understand so she can help explain it to her mother. Medicare part A is hospital coverage for inpatient stays. This particular part of Medicare covers critical access hospitals, inpatient rehabilitation facilities, and long term care hospitals. It will also cover inpatient care in a skilled nursing facility, hospice, and some aspects of home health.
Mrs. Zwick was admitted to the short term acute hospital due to a stroke and it was necessary for her to be discharged to a skilled nursing facility for further care. To determine the coverage Mrs. Zwick will have for her skilled care the requirements of the coverage need to be looked at. Due to the stroke and her inpatient admission, she required critical access to care. She was admitted for five days so both factors met the criteria for coverage for Medicare part A. These included meals, nursing care, semi private room, any hospital services, supplies, and any possible mental health needs.
Medicare part A has an annual deductible or co-insurance for the benefit period. Unfortunately, if the patient was traveling out of the country, no medical expenses would be covered under this part of Medicare. Mrs. Zwick met the eligibility for coverage for admission to the skilled facility. There must be at least a three day stay at the hospital,. She was there five days, so she began receiving Medicare covered skilled care. Because she met the criteria, Medicare part A covered the skilled stay for the first 20 days.
Medicare part A does not cover the co-insurance amount for each day after the twentieth day. Mrs. Zwick’s stay was 40 days so the patient and her daughter need to be aware the patient will owe $144. 50 per day for the remainder of her stay. Having a hospital acquired infection does not come into play when coverage is considered. Medicare part A does not pay for care of a patient that is non-medical in nature. It does however pay for medical equipment that has been approved but the patient is responsible for 20% of the cost. (Medicare Part A (Hospital Insurance), 2012). A2. MEDICARE PART B
Medicare Part B is medical insurance that covers treatments or services needed to treat or prevent medical conditions that meet the standards of medical practice. Medicare part B covers equipment that is prescribed for home use, necessary services including outpatient care, home health, lab, and some preventative services. Particular things like braces, medical supplies, surgical dressings, splints, and casts are also covered. Particular prostheses are covered. The medical equipment covered will need to be rented or purchased. Equipment vendors can help the patient know what is covered for rental or purchase. If Mrs.
Zwick needed blood, she would be responsible for the co-payment for blood processing and handling services for every unit she received. The deductible does apply to blood. If the blood is received from a blood bank at no charge then she would not have to pay for the units. If the provider pays for the blood, she must pay for the first three units of blood she receives in a calendar year. The patient may also have to pay 20% of Medicare approved premiums for doctor services, outpatient therapy, and durable medical equipment. If the patient receives outpatient mental health care, they will be responsible for 40% of the approved amount. Medicare part B (Medical Insurance) 2012). A3. MEDICARE PART D Medicare is the prescription coverage plan. Each plan has its own formulary or list of drugs that are covered. Many Medicare drug plans place drugs into different tiers on their formularies. These tiers have different costs. In most instances, the lowered tiered drug cost less the higher tiered drug. If the patient’s prescriber feels the patient will benefit from a drug from the higher tier, they can ask the patient’s plan for an allowance for a lower co-payment. Mrs. Zwicks’s part D plan will cover her rescriptions that are not covered by part A and B unless they are medications on the unapproved list. The patient will be responsible for the charges of the separate monthly premium ranging $15 to $90 or more, depending on the coverage. Mrs. Zwick’s income is a factor when Medicare part D premiums are considered. Individuals with annual incomes above $85,000, or couples with combined incomes of more than $170,000 will have a higher premium. These patients must pay the adjustment plus the standard premium amount. The annual deductible can range from $0-$320 depending on the chosen plan of the patient.
Mrs. Zwick will also have to pay a percentage of her prescription drug costs or a flat fee for her prescriptions. B. REIMBURSEMENT There is also something known as the coverage gap. For some plans, a patient can reach a coverage gap commonly as the “donut hole”. This is when the retail cost of covered prescriptions reaches the $2930 prescription limit. In 2012, a plan will pay 14% and the patient pays 86% of the cost of generic drugs during the coverage gap. The patient may get a 50% manufacturer’s discount on brand-name prescription drugs while the coverage gap is in effect.
Once the total amount of out of pocket expense of $4700 has been met, the coverage gap expires and Medicare catastrophic coverage begins. (Medicare Prescription Drug Coverage (Part D), 2012). The cost of preventable conditions, mistakes, and infections, resulting from a hospital stay; have not been covered since 2008 by Medicare. This is according to the “never event” policy. This policy was enacted to mend hospital the accuracy of Medicare’s payment under the acute care hospital inpatient prospective payment system, while providing additional incentives for hospital to engage in quality improvement efforts.
The new rules also increased the list of publicly reported quality measures and reduced Medicare’s payment for devices that hospitals replace at reduced or no cost to them. In Mrs. Zwick’s case, this means that any additional care needed after she developed her hospital acquired infection (HAI), will not be covered by Medicare. Unfortunately, due to this change, the HAI costs have been passed on to the patient as an out of pocket co-pay or higher insurance premiums. B1. ETHICAL IMPLICATIONS There does seem to be ethical implications for Mrs.
Zwick having to incur the cost related to her hospital acquired infection; these added costs seem unfair and unnecessary. For those living on a fixed income, this money is not available to cover this additional cost. It is difficult to relate the infection to hospital when the infection is not identified until ten days after being discharged from the hospital. This means the patient will incur these additional costs needed to treat the infection. Since the never event policy was put in place, hospitals have begun improving the infection prevention process and providing resources to help decrease the hospital acquired infections.
Hand washing monitoring and reporting, following bundles that list methods or routine checks that help decrease the risk of blood stream infections or urinary tract infections. If Mrs. Zwick’s hospital had practiced some of these measures; she may not have gotten her urinary tract infection. Hospitals have begun reporting publicly, infections occurring in their hospitals. This is the right thing to do and helps patients understand how they can be protected financially. Education of these changes can help provide emotional security for these patients knowing they may not be responsible for the bill after a hospital acquired infection.
It can be said that the never event policy has positive and negative ethical implications. C. COBRA At one time an employee that had group health coverage through his or her employer was at risk of losing this coverage if the employee changed jobs, was fired, or got divorced. That changed in 1986 with the passage of the health benefit provisions in the Consolidated Omnibus Reconciliation Act. Now if any of the above instances occur, an individual may now continue their coverage under that employer’s health plan for a limited time. Mr. Davis was eligible for COBRA based on the criteria.
COBRA requires that continuation coverage extend from the qualifying event for a limited period of eighteen or thirty six months. The length of time for which continuation depends on the type of qualifying event that gave rise to the COBRA rights. A plan, however, may provide longer periods of coverage beyond the maximum period required by law in certain circumstances (Fierro 2006). D. CHALLENGES When bills or acts like COBRA, public funds are paying for a greater share of these costs through Medicaid, Medicare, and other programs that are publicly funded.
It appears that every year, health care costs will use up more public funds, leaving less funding for other needed programs. This is the first challenge the state and local government face when providing care for patients like Mr. Davis. At this rate, it is estimated that states will be accountable for approximately $250 billion dollars to support Medicaid in 2014. This is at least twice what states currently contribute. Left unchecked, healthcare costs trends will continue to consume more funds that are public. This would prove to be another challenge for state and local governments to avoid or figure out how to face. (Fierro, 2006).
D1. RECOMMENDATIONS Many experts are of the opinion and recommend state and local government impact the challenges mentioned above by reducing the burden of disease. One possibly way to do this is to reduce obesity. Obesity is a key risk factor for many diseases and a key contributor to disability. A RAND study finds that if obesity trends carry on unchecked, disability rates will increase across all age groups, offsetting past reductions in disability. RAND estimates that if current trends continue, one-fifth of healthcare expenditures would be dedicated to treating the consequences of obesity by 2020 (RAND Corporation, 2002).
Lower obesity rates have the largest effect in reducing the total number of cases for high blood pressure. They could reduce reported cases for heart disease by 4. 4 million and for diabetes by 2. 8 million. Reducing obesity would result I the largest percent drop in the total number of prostate cancer cases (RAND Corporation, 2002). E. RELOCATION A comparison of healthcare for Mr. Davis would be to investigate whether it would be better for him if he were a citizen of Great Britain, Japan, Germany, or Switzerland. The percentage of Gross Domestic Product (GDP) spent on healthcare in the United Kingdom is 8. % and in Japan, the GDP is 8%. Germany spends 10. 7% and Switzerland at 11. 6%. All of these countries spend less that the United States and cover all their citizens. The US leaves out 47 million of its population and spends 16 percent of its Gross Domestic Product. Definitely an argument that Mr. Davis would benefit from any of the countries listed above. Being covered is not the only outcome that one must weigh out. The quality and options available in the other countries listed must also be examined in order to make a proper comparison (Economy of the United States, 2012).
Japan would be the country that would benefit Mr. Davis the most. This country has provided universal health coverage, which allows virtually all access to preventive, curative and rehabilitative services at an affordable cost. Patients are free to select physicians or facilities of their choice and cannot be denied coverage. In addition, hospitals by law must be run as non- profit and be managed by physicians. Regardless of age, employed or retired, you would be eligible for healthcare in Japan. Since you can select your physician there is no need for a referral to a specialist.
Public health insurance covers most citizens or residents and the system pays 70% or more of medical and prescription drug costs with the remainder being covered by the patient. You cannot be denied healthcare due to preexisting conditions. Living in Japan would be the country that would benefit Mr. Davis the most based on his chronic conditions as compared to the other countries listed. REFERENCES Medicare Part A (Hospital Insurance). (2012). Retrieved July 28, 2012 from Medicare. gov. Medicare Part B (Hospital Insurance). (2012). Retrieved July 8, 2012 from Medicare. gov. Prescription Drug Coverage (Part D). (2012). Retrieved July 28, 2012 from Medicare. gov. Rademacher, L. (2012) E How Health. Retrieved July 29, 2012 from what is COBRA Coverage RAND Corporation. (2002). The Health Risks of Obesity worse than Smoking, Drinking, or Poverty. Retrieved July 29, 2012, form RAND Corporation. Fierro, M. P. (2006). Trend Alert Costs of Chronic Diseases: What are the States Facing? Economy of the United States (2012). Retrieved July 30, 2012, from Wikipedia the Free Encyclopedia: from healthcare economist.
Health Care in Switzerland. (2012). Retrieved July 29, 2012 from Wikipedia the Free Encyclopedia. John Creighton Campbell, N. I. (2010). Lessons from Long-Term Care Insurance in Germany and Japan. Health Affair, 29(1), 87-95. Busse, R. (2004, May). Disease Management Programs in Germany’s Statutory Health Insurance System. Health Affairs, 23(3), 56-67. Health Care around the World: Great Britain. (2008, April 23) Retrieved July 29, 2012. Yosomono (November 29, 2009) “How to Navigate the Japanese Health System” gaijinass. Retrieved August 2, 2012.