Health Financing & Economics

For these two prompts please write a response/reply. you may agree or disagree with their perspective in a respective manner, add new information, include evidence for scolarly literature and or pose a question. 130 words for each

Prompt 1
The first article I found came from Huffington Post, and is a few years old, about the likelihood of economic trends like those that drove Amazon to success coming to bear in healthcare settings (Judson, 2017). The second article I found, which is more recent, came from mHealth Intelligence and discussed the barriers to increasing telehealth availability in emergency departments (Bailey, 2021). The Huffington Post article, by Bruce Judson, goes on to talk about the market opportunities in rural and urban healthcare due to provider shortages and the ability to increase volume without reducing quality like Amazon’s entry into the digital retail business (Judson, 2017). Judson contends that existing health care organizations ignore this trend at their peril (2017).
However, the second article regarding Emergency Department telehealth brings up some strong financial barriers to implementing telehealth to service rural areas through the emergency department (mHealth). Specifically, reimbursements go to the specialist providing the telehealth service while emergency departments bear the cost burden of technology and licensing. This could be resolved by either the telehealth provider shouldering costs and charging the providers fees to use the system, changing how reimbursements are made by allocating them to the emergency department, or by providing a public investment to create regional centers that contain the technology, training, and consolidate administrative needs via collaborative procurement or centralizing operations to reduce startup costs (Bailey, 2021).
Overall, the issues at play in encouraging and promoting telehealth are complex. The demand to increase convenience and reduce time spent traveling for these services, or to fill gaps in geographic labor shortages, will continue to exert pressure on the need to broaden the availability of telehealth services. Counterposed to this are the issues raised in the article I found via twitter this week, Majority of healthcare orgs CONDUCTING less than 20% of visits virtually, where author Kat Jercich noted technology and broadband availability issues driving some of the difficulties for patients (2021). While there are certainly economic forces driving demand pressures for telehealth services there are counterposing microeconomic issues with access to these tools whether they be facility related finance issues, technology access for both providers and patients, or the lack of widespread availability of broadband in rural areas generally. Likely, as with many other economic forces, these trends will start in urban areas where technology is more widely available and larger health systems are at play and the learnings and economies of scale will be passed on to rural health facilities once perfected in places where patient volume is higher.
One thought occurs to me, though, the technology itself offers the early benefit of allowing specialists and doctors to see patients far and wide without direct utilization of rural facilities which may create a disparity that ultimately further degrades rural health profitability without vertical or horizontal economic integration like the consolidations of health systems in the previous decades or drive further consolidation of health systems (Stultz & Young, 2018, p. 88-89; 97).
3b Identify and evaluate current changes in reimbursement models
Stultz & Young, in their textbook, Health care USA: Understanding its organization and delivery, often make mention of diagnosis-related groups (DRGs) as a major change in reimbursement models (2018, p. 86). Stultz & Young explain the transition from prior system of per diem payments, which incentivized longer stays and created additional exposure risk by being in an environment for those with critical illness, to DRGs which prioritized shortening length of stay to match aggregated expectations (Stultz & Young, p. 220). More recently the use of DRGs was modified in 2007 to take into account hospital-acquired conditions (HACs) which reduced reimbursements for hospital errors and secondary diagnoses that were the result of the hospital stay further putting pressure on shortening length of stay to avoid HACs and reduce other risks during a stay (Stultz & Youngs, p.225). Yet additional effort to reduce HCAs by the Centers for Medicare & Medicaid Services only raised concerns around the validity of their report and the benefit of the Partnership for Patients program (Stultz & Young, p. 225).
The implementation of DRGs had the intended effect of reducing hospital length of stay and reducing unnecessary procedures and testing (Stultz & Young, 2018, p. 88). However, the reform to DRGs by CMS in 2014 and the questions surrounding their efforts to pilot a program to reduce HCAs brings into focus two difficulties with current reimbursement models. First, that reimbursements are a net profit versus the standard expectation there is a continuing emphasis on discharging as soon as possible in stable condition, an effect mirrored by EMTALA, while limited exposure and error. This likely allows for a subset of people to fall through the cracks where marginal investments in testing, stay or procedure would’ve seen gains in overall quality of care. Second, pilot projects exist within a given framework of reimbursement and macro level behavior changes are difficult to deal with when layered against a localized microeconomic effort to pilot a change in behavior.
Overall the switch to DRGs and modifications made in 2014 are net positive for most people, with hospitals becoming responsible in reducing secondary costs due to exposure to the hospital environment. However, larger trends in healthcare finance such as EMTALA or the ACA’s focus on preventing readmission paint a picture in which DRGs are subverted by the desire to dump patients out of care to be readmitted later, almost like punting the football for a new attempt later in the game (Stultz & Young, 2018, p.222; 227). This suggests that DRGs are effective but vulnerable to systemic behaviors to dance around the intent or to overcome financial barriers these constraints set in motion. This implicates that much of the vulnerability to this issue falls on those with chronic illnesses, the homeless and poor, and those with lack of access to preventative care may bear the brunt of these issues. Explicitly, care is more difficult at the margins where externalities such as unstable housing, lack of access to health food, or availability of health services pushes them into hospital settings where they will find themselves funneled as quickly as possible through a system that prioritizes speed and efficiency over quality of care but for a focus on reducing readmissions via the ACA.

Prompt 2
My 1st news article is from Healthcare IT news. It talks about the Biden administration investing about $11M to increase access to behavioral and mental healthcare for children through telehealth. The money goes to support providers to offer telehealth consultation systems, training and technical assistance among other things. According to the article about 20% of children go through some behavioral or mental health issues every year and only a small fraction receive care (Jercich, 2021).
My 2nd news article is about a Medicare program in Vermont that reduced hospital stays and saved money. The model, known as the all-payer model, pays a set amount of money for each patient covered rather than paying for each service and holds both insurers and providers accountable for the quality and cost of care provided. The article looks at the 1st 2 years of the program (2018 &2019). Looking at the statistics, the cost of Medicare reduced, length of hospital stay for acute care patients reduced and readmission rates also reduced (Ring, W. 2021).
Covid19 has changed how we all interact with each other. All things being equal, I feel kids should be in school. They should be able to play with their friends, run around and form real face to face bonds. Human beings are social creatures so I can see how being cooped up can cause an increase in behavioral and mental health issues. Focusing on the health of our children today, will lead to a healthier next generation.The statistics from the all-payer model shows that the program is achieving its goal. I think it is a great reimbursement method since it is paying for quality not quantity. It mimics parts of the ACA in my opinion. Both concepts seek to provide affordable quality care and encourage communication between providers (Young & Kroth, 2018).
In the 1960’s the popular type of reimbursement model was a fee-for-service type of system that was based on cost. In this type of system, the higher the number of services provided, the higher the reimbursement provided. It was focused on volume, rather than quality and favored the provider rather than the patient and insurer. In an effort to reduce insurance cost and to compel providers to provide quality care to each patient rather than mediocre care to multiple patients, the reimburse model changed from pay per service to a prospective payment system (PPS). The PPS model is a prepaid model and the cost are established prior to the treatment. A type of PPS is per diagnoses reimbursement method which reimburses providers based on a patient diagnosis. Medicare uses this type of payment and has a database of diagnosis related groups (DRGs) which it uses to determine cost. Another type of PPS is per procedure reimbursement which like its name suggest, pays providers a set amount for each procedure performed. A pro of the PPS is that it lowers the cost of insurance and encourages providers to perform quality care at a set cost. One disadvantage of the PPS is that, it creates the environment for providers to be selective and lean towards patients with diagnoses or procedures that pay more. This means the less “favorable” patients have to seek care elsewhere which can lead to inconvenience and delayed care (Gapenski &Reiter, 2016 ;Young & Kroth, 2018).With the general reduction in the cost of insurance brought about by this change in reimbursement model, more people could afford insurance and not only the rich. Also, illiterate patients who are generally from lower socio-economic background may have their insurance claims denied because of the wrong code. This happens often because they may not be able to provide the correct information on the forms they fill or may not be able to accurately describe their conditions.

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