PMO 526 (HSA)

Lecture 1: History of Health Care

1. Discuss the historical development of U.S. health care system.

  • Late 1880s – Wild West era.
  • Profession – Private Medical Schools, apprenticed experience. Hospitals were alms houses. Care usually given at home.
  • Society – Competitive, fee for service, caveat emptor. Funding came from individuals
  • 1882 – No. Pacific Railroad offered health care coverage
  • 1887 – Mayo Clinic formed as group practice
  • Legal – No real laws regulating health care at this time
  • Early 1900s
  • Profession – 1910 Flexner Report: Medical schools developed curricula and affiliate with hospitals. Licensing became common. 1910 EA Codman censured by Mass Med Soc. (created and end-results hospital and was run out of town). Formed American College of Surgeons
  • Society – WWI.
  • 1914 – Workers Compensation. War Risk Reduction Act (beginning of benefits for military personnel and VA)
  • 1917 – Oregon allows for-profit hospitals to deliver care
  • 1929 – Baylor Hospital develops pre-paid policy for teachers (beginning of Blue Cross)
  • Legal – Not much

Mid 1900s

  • Profession: Faced QA audit (two-letter Q). Both QA and QC
  • Society – WWII.
  • 1942 – Kaiser Permanente created (mining and railroad)
  • 1947 - Group Health Pugest Sound started (logging)
  • 1935 – Social Security Act (coverage for children and disabled)
  • 1946 – Hill-Burton Act (improve access and increase hospitals)


  • Profession – Expansion period, growth of scientific knowledge, MDs experienced rise in prestige, status, and income. Hospitals became places to recover (secondary and tertiary care). Research funding available (NIH, interests groups, etc.)
  • Society: Great society and creative federalism.
  • Rising concerns about cost of health care
  • Businesses began to lose world markets
  • Three-letter Q developed (TQM, TQI etc.)
  • Emergence and strengthening of private insurance
  • Legal
  • 1953 – DHEW created (?ministry of health) – conduit for funding
  • 1965 – Medicare/Medicaid (Title 18/19 of SSA) compromise for a national healthcare system
  • 1973 HMO Act (Nixon administration, tax breaks, didn’t work)
  • 1974 – National Planning and Resource Development Act


  • Profession – under fire; errors become public. 3 LQ comes to medicine. Death of “Trust me, I’m a doctor.” Most payment for healthcare is third party or government.
  • Society – concerned about healthcare costs; not willing to accept federal oversight. More involved in care (98 million get health info from Internet).
  • Never about healthcare reform, but healthcare finance reform (form follows funding)
  • Legal
    • 1993 – Health Security Act
    • 1994 Health Care Reform (failed)
    • 1996 – Health Insurance Portability and Accountability Act

2. Explain how the theories of market and social justice affect allocation of health care resources.

In a “market justice” theory, economic factors drive the system. Supply and demand determines cost. The focus of healthcare is treatment of disease on the individual level and the individual (or insurance) pays. Physician income is activity-based and the risk is in over-utilization of resources.

In a “social justice” theory, society’s needs are considered first since we cannot grow or function in society if we are not healthy. Allocation of resources is based upon need, rather than the supply/demand model. Populations are considered first and financing is collective. Physicians are salaried and the risk is under-utilization.

3. Describe how complexity theory relates to the current health care delivery “system” in the U.S.

Decisions were made based on the issue of the moment, sensing the desire of the people, making as little change as possible, and to keep the system alive. These decisions were made in the zone of complexity, without a big plan, to not rock the boat, to settle for small win, so the result was the patchwork quilt that we now have.

Lecture 2: Organization of Health Services

1. Explain the general organization and component parts of the U.S. health care system.

The American healthcare system is not a real system, but a multi-layered medical enterprise with complex modes of access, delivery, payment, and financing, further influenced by private and government intervention. It employs 9.7 million people, making the world’s 8th largest economy. It is comprised of:

  • Policy makers which include states, purchaser, and third-parties. Thus, there is no coordination on the policy level.
  • People – Doctors, nurses, pharmacists, and administrators. Nearly ½ million allied health personnel. Overall 9% of working adults are employed in the sector. 142 medical, 54 dental, 78 schools of pharmacy, 1500 nursing programs.
  • Places – Clinics, hospitals (412 billion), LTC facilities (92 billion), home care (36 billion). Cost-shifting to home care due to managed care contracts in hospital. 6,500 hospitals, 17,000 nursing homes, 1700 inpatient mental health facilities, 13,500 home-health agencies, and 800 primary care programs
  • Technology – Advances in diagnostic testing and therapeutic modes have increased greatly and have driven up costs.

2. Discuss the trends and drivers of change in this system.

The major trend and driver of the system has been to control costs. Prior to managed care, the insurance industry distributed risk and money to multiple levels, the result being that procedurists and specialists getting the lion’s share. The Gatekeeper model distributed the risk and money to the primary care giver who would control access to the more costly parts of the system. Legally, the health Maintenance Act (1972) was intended to create emphasis on the development of Managed Care Organizations (MCOs) because managed care was more efficient and delivered both better quality and lower cost. However, because of patient complaints – and threatened legislative action – the HMOs increased access and ‘went around’ their own gatekeeper. The net result was that costs began to increase again – and people complained!!

3. Describe the current status of the system and impending stressors.

Currently consumes 16% of GDP, employs 9.7 million people, and forms the world’s 8th largest economy. Impending stressors include escalating costs, access to care for the uninsured (17%), and the impending retirement of baby-boomers (Medicare and social security).

4. Describe the origins and current status of the two largest federal health care delivery systems.

Military (readiness and health benefit components)

  • Early history – assumption was to care for active duty component
    • Frontier America had field care post hospitals
    • Dependents treated on Space A basis. Made legal (and permanent) by Congress in 1889.
    • System unchanged until post WW-2

Post WW-2

  • Social pressures increased to widen benefits
  • Private sector offered insurance benefits, why not military?
  • 1943 – Congress approved maternal and infant care for dependents (first entitlement for dependents)
  • 1945 – GI Bill allowed federal funding for more specialty training
  • 1947 – Creation of DoD
  • 1954 – Military Medicare passed
  • 1965 – Medicare and the Great Society (CHAMPUS/VA). Name changed to avoid confusion with civilian Medicare
  • 1970s – Costs escalate. Congress bails out military.
  • 1980 – Military build-up; businesses are self-insuring (HMO style)
  • 1982 – CHAMPUS reform initiatives (CRI)
  • 1992 – TRICARE implemented as the MHS managed care organization. Some initial troubles, but now equivalent to any large HMO.
  • 2001 – Tricare for Life: the best benefit in the world.

Issues for today

  • Cost – insurance v. uncovered dependents; rising costs of drugs
  • Quality – civilian standard of care v. bureaucracy
  • Access – cost containment efforts v. public desire for more
  • National structural shifts
    • From multiple sites and mechanisms (three services) to 12 regions in the U.S. to 3 regions.

VA (health, benefits, memorial services). History steeped in war.

  • Colonial America – statutory benefits established, 1636. Based on English tradition.
  • Revolutionary War – Pension Law 1776. March 4, 1789 Constitution enacted (Pension law included)
  • War of 1812
  • 1833 – Philadelphia (US Naval Asylum)
  • 1851 – Washington, DC (Soldier’s and Airman Home)
  • Civil War
    • 1865 – National Home for Disabled Volunteer Soldiers


  • 1914 War Risk Insurance Act (first acceptance of federal responsibility for health and welfare of military conscripts)
  • 1919 – Public Health Service
    • Operated a system of hospitals for WWI veterans.

Post WWI

  • 1930 Veterans Administration created by merging Veterans Bureau, Bureau of Pensions, and National Home for Disabled Volunteer Soldiers.
  • 1944 – GI Bill of Rights
  • 1945 - Omar Bradley, VA Administrator and Paul Magnusson, MD created:
    • Memorandum #2 (agreement between VA and medical schools)
    • Title 38 (for physician and other healthcare professional pay)
  • 1960s-1980s – increased construction and research funding
    • many new hospitals
    • two Nobel laureates
    • Pioneering efforts
      • CAT scanner, cardiac pacemaker, etc.
  • 1989 – VA given departmental status. Name changed from Veterans Administration to Department of Veterans Affairs now composed of three parts:
    • VBA (few people, much money)
    • NCS (fewer people, little money)
      • Originally formed following battle of Antietam
      • Consolidated in 1973
      • In 2000 – 210 cemeteries
    • VHA (most people, moderate money)
      • Inpatient care (4%)
      • Outpatient care (12%)
      • Long-term care
  • Customers
    • 26 million eligible (90 days in uniform)
    • 10 million entitled (SC, POW, IR, agent orange

5. List some structural and historical similarities between the two systems.

Both began with the emphasis on taking care of the wounded soldier/veteran
Both increased in size (and cost) during the post-WWII buildup
Both underwent consolidation of regions
Both shifted from inpatient focus to outpatient care focus
Both engaged in quality improvement and have performance-based measures.

6. Explain the relationship between certain administrative actions and the public perception of the system(s).

There is a general public perception of poor quality of care within the military and VA health care systems. This perception is not correct. New evaluation and incentive systems were created that initially focused on structure, then process, and finally to outcomes and are tied to annual evaluations. These have resulted in benchmark level activity in prevention and care of patients with chronic conditions leading to cost-effective and high-quality outcomes. Beats Mayo, Kaiser and others.

Lecture 3: Economics and Healthcare

1. Discuss the 3 perspectives of health.

The principle of perspective states that individuals make choices based on their own narrow perspective. The 3 perspectives of health are: The monotechnic point of view
, the romantic point of view and the economic point of view. The romantic point of view refuses to accept the notion that resources are inherently scarce. The monotechnic point of view, frequently found among physicians, engineers, and others trained in the application of a particular technology, is quite different. Its principal limitation is that it fails to recognize the multiplicity of human wants and the diversity of individual preferences. The optimal solution thru the eyes of the engineer or doctor may not be optimal for the population as a whole. The economic point of view is that resources are limited and choices have consequences. The economic point of view takes both the romantic point of view and the monotechnic point of view and states the opposite: 1) Scarce resources: Resources are not abundant, they are in fact scarce. 2) Alternative uses for resources. 3) Different preferences/Different things: people make different choices under the same circumstances.

2. Describe the problems we face in health care.

1) Cost: Medical costs are increasing faster than inflation. The US spends more per capita than any other country on health care.

2) Access: The US government will spend hundreds of billions of dollars in Medicare and Medicaid, mostly on healthcare for the elderly, while many pregnant women and children are uninsured. Millions of Americans are without health insurance at any one time, and tens of millions more are underinsured.

3) Quality: Despite a high level of spending and the most advanced technology in the world, the US is 15th in life expectancy, 22nd in infant mortality. Americans are unhappy with their health care system. Almost 90% of Americans said that the health care system “requires change or complete rebuilding.”

3. Explain positive and normative analysis.

1) Positive analysis makes statements or predictions regarding economic behavior. A: What is? B: What happened?

2) Normative analysis deals with the appropriateness or desirability of an economic outcome or policy. A: what ought to be? B: Which is better?

Examples of the positive and normative analysis:

According to Becker and Murphy (1988), a 10% increase in the price of cigarettes leads to a 6% reduction in the number of cigarettes consumed. (Positive analysis)
The government should increase the tax on cigarettes to prevent people from smoking. (Normative analysis)
It is in our country’s best interests that the federal government take a more active role in the prevention of AIDS. (Normative analysis)

A study by Hellinger (1991) estimates that the average yearly cost of treating someone with AIDS is $38,300, while the lifetime costs equal $102,000. (Positive analysis)

To control health care expenditures, the United States should adopt a national health insurance program similar to Canada’s. (Normative analysis)

National health care expenditures per capita in the U.S. equaled $4,094 in 1998.(positive analysis)

4. Discuss uses of Net Benefit Calculus.

The Net Benefit Calculus (benefits minus costs): Health care providers,
government agencies, and individual consumers use such cost-benefit analysis
to make decisions. (Explicitly or implicitly).
Formula: NB*(X) = B*(X) - C*(X)
X = choice or activity under consideration
NB* = expected net benefits
B* = expected benefits
C* = expected costs
Example: Cost of treatment = $100
Outcome resulting from treatment = $1,000
By subtracting the costs ($100) from the benefits ($1000) the results can be
said to have a $900 net benefit.
When comparing two treatment alternatives, the one with the greatest cost
benefit ratio would be considered the most efficient use of resources
Benefit ($1,000) / Cost ($100) = Cost benefit ratio of 10 to 1
The ratio could be interpreted as a treatment that produces $10 of benefit
for every $1 spent
Economic models assume that individuals are rational.
People can rank their preferences from high to low, or best to worst.
People never purposely choose to make themselves worse off.
If expected benefits > expected costs for a given choice, it is in the agent’s best interest to make that choice.

5. Differentiate between health, health care and health care economics.

1) Health: A generic interpretation of health is “a state of physical, mental and social well-being and the absence of disease or other abnormal condition.”
Economic insights: Health is a durable good or a type of capital that
provides a steady flow of service. The flow of service produced from the
stock of health are consumed continuously over a person's life. Death occurs
when an individual's stock of health falls below a minimum level.
Augmenting the stock of health: Life Style, Nutrition, Environment, and Medical Care.
Diminishing the stock of health: Age, Life style, Environment, and Adverse events.

2) Health care: is the prevention, treatment, and management of illness and the
preservation of mental and physical well being through the services offered
by the medical, nursing, and allied health professions. According to the
World Health Organization, health care embraces all the goods and services
designed to promote health, including "preventive, curative and palliative
interventions, whether directed to individuals or to populations".

3) Health economics: The study of the supply and demand of health care resources and the impact of health care resources on a population.
The goal of health economics is to promote a better understanding of the economic aspects of health care problems so that corrective policies can be designed and proposed.
The Four Basic Questions of Health Economics: 1) What combination of non-medical and medical goods and services should be produced in the macro-economy? 2) What particular medical goods and services should be produced in the health economy? 3) What specific health care resources should be used to produce the final medical goods and services? 4) Who should receive the medical goods and services?

Lecture 4: Health Insurance

1. Describe the effect of health insurance on health care costs.
I think this question is asking about moral hazard which states that insurance increases use of services because there is little cost to the user. "Hazard" - purchase is of little value or unnecessary.

  • Insured individuals are less like to postpone seeking care or fail to fill a prescription because of cost.
  • Uninsured individuals are 3-4x more likely to have negative barrier to healthcare (i.e. postponed seeking care because of cost, needed care but did not get it, did not fill a prescription because of cost, skipped recommended treatment because of cost)
  • Uninsured individuals are 2-3x more likely to have medical debt and unable to pay on time.
  • Uninsured individuals are almost 2x more likely to be diagnosed with colon cancer at a later stage (increased health care cost on chemo, radiation, surgery)

2. Identify the causes of increases in cost of health insurance.

We have more options in healthcare, which are driving up the cost of healthcare.

  • Technology
  • Includes pharmaceuticals
  • Ability to identify disease or underlying condition earlier-body scan
  • Increase in chronic conditions
  • Aging population
  • Increase in ability to treat disease
  • Sensitivity to condition – We are more sensitive to mental health conditions
  • State coverage mandates
  • Demand for more services
  • Coverage of larger variety of conditions – e.g. infertility
  • Defensive medicine – more services are ordered to avoid a bad outcome or a lawsuit.
  • Malpractice

3. Learn cost reduction strategies in health insurance.
1) Insurer efforts to reduce cost

  • Prospective payment – Each patient is classified into a Diagnosis Related Group (DRG) on the basis of clinical information. The hospital is paid a flat rate for the DRG, regardless of the actual services rendered.
  • Utilization management – utilization nurses call to see if patient is ready for discharge.
  • Tiered coverage
  • Disease management – Home monitoring/home care are being offered to detect and treat early signs of complications from surgery.
  • Early efforts in pay for performance
  • Better rates for healthy lifestyle
  • Consumer directed health plans (CDHP) - consumers seek a greater role in determinig what benefits are provided, what providers are included, and other matters of plan design

2) Employer efforts to reduce cost

  • Change benefit design
  • Change insurance carriers
  • Pass on more costs to employees
  • No longer offer insurance to retirees
  • Consumer directed health plans (CDHP)

3) Consumer efforts to reduce cost

  • Change lifestyle habits

- Stop smoking
- Lose weight
- Exercise

  • Change insurance vehicle

4. Describe the concept of Health Savings Accounts.
Health Savings Accounts is a type of insurance product authorized by the 2003 Medicare Modernization Act that may be offered by an employer. Employees can choose this high-deductible type of plan that allows them to own and control their health care spending and save for future health care costs with tax-free inerest until retirement. No to be confused with medical savings account.

Health Savings Accounts (HSA)

  • Tax deductible, and earning of HSA are tax free
  • Can be used for qualified medical expenses
  • Is owned by the employee
  • Funds left over at end of year carry over to following years
  • Funds are portable – can be taken to next job
  • MUST be coupled with a high-deductible health plans (HDHP)-high deductible and low premium plan
  • Maximum amount that can be put into an HAS is either the deductible or IRS limits ($2,850 for single, $5650 for families), whichever is less

Lecture 5: Health Care Finance / TRICARE

1. Discuss the function of financial management in health care organizations, including the resource management process.
a. Resource management process includes 1) Planning 2) Programming 3) Budgeting 4) Accounting 5) Analysis and reporting
b. Planning proceeds from mission, vision, goals.
c. Planning cycle flows:  Strategic Performance (income)  Operational performance (costs)  Financial Performance (manage cash in/out)  Capital position (funds available)
2. Describe how organizations make investment decisions and allocate capital among competing investment opportunities.
a. As above, considers how much capital available, considers projected earnings, considers how money is spent, evaluates performance
3. Explain how managers use financial information and budgets to evaluate and control healthcare organizations. Need help with this one, not clear from the slides. Likely expect a general answer derived from objectives 1, 2.
4. Describe the DoD Planning Programming and Budgeting System (PPBS) and explain how it interfaces with the Congressional Appropriation Process.
b. Planning, Programming, and Budgeting System (PPBS) A rigorous process to Allocate resources among competing programs while considering perceived threats
c. Apparently cumbersome process ensures due process. Direct logic path from war plans to execution of programs in the field. Multiple forums and hearings prior to final decision
d. Administration provides guidelines (targets, limits) to federal agencies. Agencies prepare budget requests. OMB review and consolidation
e. Key steps: 1)Appropriation 2)Apportionment 3)Allotment 4)Commitment 5)Obligation 6)Expense (outlay)
5. Describe the TRICARE financial system.
Administrative costs
Claims processing, Disease management programs, Administrative Services, Award Fee
Health care costs
MTF Enrollee care in the network (underwritten) Non-MTF Enrollee care (underwritten) Underwriting Fee/Risk Sharing payment, Some reimbursable healthcare costs (not underwritten)
• Performance Guarantee - Funded by the Contractor, Minimum of 3% of the Administrative Price per Period of Performance, Objective measurable standards set at industry benchmarks e.g., Phone response standards, Claims processing standards
• Award Fee for customer satisfaction - Customer Satisfaction Award Fee. Subjective, based on surveys of: Beneficiaries, Regional Directors, MTF providers, Network providers. Amount available equal to amount bid for Performance Guarantee. Minimum of 3% of the administrative price to a maximum of 10% of the administrative price
• Underwriting Fee - Government and Contractor will share the risk for underwritten healthcare costs. The risk sharing arrangement is fixed - 80% for the Government, 20% for the contractor

Intended Benefits of underwriting: 1) Shared risk promotes Government/contractor partnership to control purchased care costs. 2) Annual determination of target cost minimizes contractor’s long term risk - Reduces “risk premium” and potential for disputes. 3) Lack of adjustment for MTF usage creates strong incentive to maximize use of the MTF - More MTF care means less purchased care, more realized fee for the contractor and less cost for the Government. 3) Paying healthcare costs in real time improves budget execution and predictability

Points of Emphasis 1) Financial structure promotes joint management and control of underwritten health care costs. 2) Both parties have strong incentives to maximize the use of MTFs and minimize the use/costs of purchased care. 3) Financing mechanisms are much simpler than under the current contracts and should provide more budget predictability. 4) Government retains the lion’s share of the risk

Lecture 6: Health Care Policy

1. Discuss factors that influence health policy in the U.S.

  • Individual autonomy and self-determination
  • Personal privacy
  • Commitment to justice
  • Deep faith in technological rescue
  • Obsession with prolonging life with little regard to cost
  • Real reluctance regarding government control

2. Identify the characteristics of U.S. health policy.

  • Incremental
  • Piecemeal
  • Not comprehensive or integrated
  • Law of unintended consequences

3. Discuss the impact of health policy on health.

The impact of health policy on health involves the formulation of policy, its implementation, and modification. This affects health on the federal, state, and local levels in addition to help shape market forces.

4. Outline the public policy making process.

A dynamic process involving:

  • Policy formulation - law passed (see below)
  • Implementation
  • Modification - first implementation may not have gone as well and needs to be modified

5. Discuss the key features of the policy process.

  • Policy formulation (agenda setting) - done by special interest. Help develop legislation. Problems, possible solutions, and political circumstances. This phase and next bridged by formal enactment of legislation.
  • Policy implementation - rule making and operation. Not always clear.
  • Modification - revise regulations or revise law if necessary based on feedback from individuals and organizations.

Lecture 7: Managed Care

1. Discuss the key characteristics of managed care systems.

  • There is administrative efficiency (personnel, economy of size)
  • There's also agreements and/or negotiated discounts with providers, hospitals, etc
  • It manages how your care is delivered through case management and discharge planning
  • Outcomes management
  • Plan management - every year you're going to manage plans to meet the needs of the beneficiares; may add or delete grups
  • Risk-sharing
  • Utilization review and management
  • There's emphasis on prevention/wellness/healthy behavior

2. Describe and distinguish among the predominant models of managed care (HMOs, PPOs, and Managed Indemnity plans).

  • You have a "home" to go to for care
  • Staff model - practitioners are salaried
  • Group model - group has exclusive contract with HMO
  • IPA model - HMO contracts with various practitioners
  • Network model - HMO contracts with many IPAs
  • Direct contract - HMO contracts with groups, individuals and IPAs


  • A PPO is made up of doctors and/or hospitals that provide medical service only to a specific group or association. Rather than prepaying for medical care, PPO members pay for services as they are rendered.
  • The PPO sponsor (usually an employer or insurance company) generally reimburses the member for the cost of the treatment, less any co-payment. In some cases, the physician may submit the bill directly to the insurance company for payment. The insurer then pays the covered amount directly to the healthcare provider, and the member pays his or her co-payment amount. The price for each type of service is negotiated in advance by the healthcare providers and the PPO sponsor(s).
  • Contracts directly with hospitals, physicians and diagnostic facilities
  • Increased flexibility - allows members can use non-PPO providers but apply copayment rates or deductibles for out of network services
  • Utilization programs are common

Managed indemnity
*An indemnity plan reimburses you for your medical expenses regardless of who provides the service, although in some cases your reimbursement amount may be limited.

  • Best suited for individuals who desire maximum flexibility and cost is not a major factor
  • Similar to indemnity fee-for-service plans
  • May restrict access to specialists, hospital utilization, LOS (length of stay)
  • Restrict people to regional places

Point of Service (POS) option

  • A point of service plan is a type of managed healthcare system where you pay no deductible and usually only a minimal co-payment when you use a healthcare provider within your network.
  • ou also must choose a primary care physician who is responsible for all referrals within the POS network. If you choose to go outside of the network for healthcare, you will likely be subject to a deductible and your co-payment will be a substantial percentage of the physician's charges.
  • A mix between HMO and an indemnity plan
  • Members do not have to choose how to receive services (select a plan option) until they need them
  • Limitations on some services not authorized for out of network

3. Describe methods of cost containment in a managed care system.

Administrative costs
• Control of both insurance and care costs; economies of scale
• Personnel management

Plan management
• Restrictions on choice (services, gatekeepers, etc.)
• Restrictions on services
• Tiered co-payments, POS fees

Health services costs
• Discounted/negotiated fees, large contracts, market power
• Use of clinical practice guidelines, benchmarks
• Utilization management and review
• Risk profiling
• Case management
• Wellness emphasis
• Reimbursements for non-physician providers
• Provider reimbursements (salary, modified FFS, incentives, capitation)

4. Discuss the Military Health System as a managed care system.

Due to escalating costs and government expenditures, the increasing administrative burden of running the military health program and beneficiary dissatisfaction with it, the CHAMPUS Reform Initiative was established in the late 1980's to contain costs and improve services. One way to achieve these desired changes was to introduce aspects of managed care, including enrollment into specific placs, utilization management, assistance in referral to the most cost-effective providers and reduced paperwork.

**5. Debate the role of managed care practices in the future of the U.S. Health Care system.

Greater emphasis on case/disease management, continuity of care, and healthy behaviors
• Financing of basic public health, preventive services for entire population

Better data and dissemination of provider and provider system profiling, quality assessments
• More electronic information exchange

Changes in risk assumption
• Consumer driven health care, health savings accounts
• Catastrophic coverage, high deductibles

Insurance purchasing cooperatives for small business and self employed

Lecture 8: Medicare and Medicaid

1. Understand the roles that the Centers for Medicare & Medicaid Services (CMS) play in assuring access to health care for millions of Americans.

I)Medicaid program-created in 1965, initially linked to AFDC (Aid to Families with Dependent Children) and SSI (Supplemental Security Income) and was expanded

A) Provides for 55million “categorically eligible” (>13% of US population’s health services)
B) Includes low income families with children (46%), parents of dependent children, pregnant females, elderly, disabled
C) Income eligibility varies by state
D) Coverage includes: Inpatient, Outpatient hospital servies, Physicians, Midwives, Nurse Practitioners, Nursing homes and Home Health services for 21y/o, Early preventative services and screening for children, Family planning services, Rural health services, Long term care
E) Covers Disproportionate Share Hospitals (enables charitable care)

II)Medicare program-created in 1965

A) Provides for 43 million people and pays for medical resident training to ensure access to care for elderly
B) Includes elderly >65y/o, permanently disabled (includes End Stage Renal Disease and Lou Gerhig’s patients)
C) To qualify you must have contributed social security payments and made tax payroll contributions for at least 10 yrs
D) Coverage includes: Part A-inpatient services, home health, hospice
Part B-outpatient services, physicians, prevention as mandated by Congress
Part C-Medicare Advantage (involves managed care and combines Parts A, B, D coverage)
Part D-Prescription drug benefits

2. Identify strategies required to administer and manage these programs.
A) Medicaid-Overseen by Centers for Medicaid and Medicare
*Financing-Joint Federal and State Funds, Federal contribution varies by state (50-76%)
*Flexible with income eligibility determined by states (waivers granted)
*2005-Deficit Reduction Act-Limits benefits to some groups and expands cost sharing

B) Medicare (14% of federal budget)-Overseen by Centers for Medicaid and Medicare
*Financing-dependent on plan with Part A funded by 2.9% of earnings paid by employers and employees; Part B funded by taxpayers/general revenues/beneficiary premiums; Part C involves managed care with funding by private premiums; Part D funded by general revenues/beneficiary premiums/state payments
*Beneficiary cost sharing, out of pocket expenses, and private insurance (through Medisup and Medigap programs) provides additional coverage
*Coverage determined by Evidence Based Medicine
*Social Security Act gives CMS legal authority to reimburse only those items that are “necessary and reasonable” for diagnosis and treatment
*Most coverage decisions are local (90%), remaining 10% is national
*National coverage decisions (NCD) take 6-9months from preliminary decision to final decision memorandum and implementation
*NCD prompted by external request (through substantial LCD variation) or internally generated (due to important new study, technological advance with major clinical or economic impact, and concern about inappropriate use)

3. Recognize ways in which Medicare and Medicaid interact with states, health service organizations, and individuals using health services in this country.
a) Medicaid:
• Each state creates its own program.
• Determines type, amount, duration and scope of services.
• Copays, co insurance and deductibles can be instituted by states for certain services.
• Federal contribution varies by state (50-75%).
• States may expand income eligibility beyond federal minimus.
• 2005 Deficit Reduction Act expands states’ discretion to use premiums and cost-sharing.
• Intensive, acute and long-term services utilized.

b) Medicare:
• Not state friendly.
• Covers less than 45% of beneficiaries’ total costs.
• Part A funded mainly by a dedicated tax of 2.9% of earnings paid by employers and workers.
• Part B funded by taxpayers through general revenues and beneficiary premiums.
• Part C: beneficiaries can enroll in a private managed care plan such as an HMO, PPO or private fee for service plan.
• Part D funded by general revenues, beneficiary premiums and state payments.

4. Understand how Medicare and Medicaid influence health care policy, finance, and delivery in this country.
CMS has the legal authority for coverage. They determine if the service can be offered to the Medicare population or to the general provider community. This decision is made based on evidence showing improvement on the net health outcomes. This decision will affect the entire country.

5. Understand the relationship of publicly financed health insurance to public health and the role that prevention plays in each.
I need help with this one.
Preventive care is not included unless it is congressionally mandated.

6. Recognize the political and managerial challenges these programs face, including rising health care costs, managed care, an aging population, the rise in the uninsured, emergent diseases, the prescription drug benefit, and other trends influencing health care delivery in the future.
a. Aging population
b. Gaps: Long-term care needs, dental, vision
c. Smaller workforce paying in
d. Medical care is expensive, market over-inflated
e. Part A trust funds reserves projected to be exhausted in 2018.
f. Biomedical progress

Lecture 9: Health Care Law and Ethics

1. Develop a basic understanding of the application of law to medical care / medical administration / public health.
2. Develop familiarity with specific topics where law and medicine currently interface including liability of health care providers, rights of patients, consent issues, ethics, research, and administrative law.

1. Sources of law applicable to medical practice and health care administration include:
• The Common Law
• The Constitution
• Statutes

2. The U.S. Supreme Court resolved that Armed Forces personnel may not sue for malpractice in military hospitals because of:
• The existence of a comprehensive military disability compensation scheme
• Concern about adverse impact on military discipline and effectiveness
• The doctrine of Sovereign Immunity

3. Culpable negligence by a health care provider can lead to criminal prosecution and involves:
• A gross departure from the applicable standard of care

4. Military physicians:
• May be reported to the National Practitioner Data Bank under procedures established by the Surgeon General of their service

Lecture 10: Human Capital of Health Care

1. Discuss the education, training and work aspects of those involved in health-related professions.


-Doctors 4 years MD/DO, PGY1 (Internship) followed by Residency (PGY 2-9, depends on residency ie prev med is three and plastic surgery is 9), Fellowships can follow in sub specialty areas. Key point LONG TIME TO TRAIN. Probably enough Doctors, but not the right mix.

-Nurses. Aide requires High School diploma, LPN 1 year of college, formal courses and license, RN has bachelor level training in nursing, APN is RN with advanced training like Nurse practitioneer or highly specialized CNS. Not enough of them and not enough of them any time soon.

-Administrators (HCA), Masters level training and ACHE designation, Fellow status is goal. Currently BS and Masters programs: (MHA/MHSA, MBA(health), MPA or MPH)Probably have enough administrators, some may argue too many administrators.

2. Identify and examine factors that influence the supply of, and demand for, health care professionals.

-Aging workforce. Decline in Nursing school enrollees. Work environment leading to job burnout. High Nurse turnover and declines in relative earnings.
-Outdated system to determin supply vs demand. Limited instructors/training institutions causing bottlenecks.
-Legislation (read funding) could better be allocated to address current and future shortages.
-Perceived job satisfaction to potential members of the healthcare profession (ie does a high school graduate want to become a Doctor, Nurse or administrator).

3. Understand the major issues facing health professions in the future.

Doctors: Not enough in "under served areas." More specialty than primary care physicians. Many leaving medicine because of "administrative over control" / oversight, and unrealistic productivity mandates.

Nurses: Not enough of them, and not enough any time soon. Better distribution away from admin jobs, and to "underserved" areas may address many of the perceived shortfalls.

-Vacancies increasing in hospitals over time. Defining and assuring an adequate number of healthcare professionals.
-Solving pipeline issues for schools (curruculum, funding, emphasis, faculty, number of students, etc.) and graduate programs (IMG's, slots, etc).
-Developing and assuring an appropriate mix of providers and fair distribution across the country.
-Defining a reasonable scope of practice for non-physician practitioners.
-Pursuing a reasonable course for assuring competency, testing and life-long learning by all professionals.

From LCDR Corriere's lecture notes:

There are more than 250 different health care professions. Health care professions are jobs that maintain the health and condition of the human body. Some of these jobs, like being a physician, require a lot of schooling; others can be had with a 2-year associate's degree or even less time spent in a certificate training program. What this says is that nearly every one can qualify for a health profession. Of the 13.1 million wage and salary jobs, 41 percent were in hospitals; another 22 percent were in nursing and residential care facilities; and 16 percent were in offices of physicians. About 92 percent of wage and salary jobs were in private industry; the rest were in State and local government hospitals. The majority of jobs for self-employed and unpaid family workers in health care were in offices of physicians, dentists, and other health practitioners—about 282,000 out of the 411,000 total self-employed. Health care jobs are found throughout the country, but they are concentrated in the largest States—in particular, California, New York, Florida, Texas, and Pennsylvania. Workers in health care tend to be older than workers in other industries. Health care workers also are more likely to remain employed in the same occupation, due, in part, to the high level of education and training required for many health occupations.

Job opportunities should be excellent in all employment settings because of high job turnover, particularly from the large number of expected retirements and tougher immigration rules that are slowing the numbers of foreign health care workers entering the U.S. Wage and salary employment in the health care industry is projected to increase 27 percent through 2014, compared with 14 percent for all industries combined (table). Employment growth is expected to account for about 3.6 million new wage and salary jobs—19 percent of all wage and salary jobs added to the economy over the 2004–14 period. Projected rates of employment growth for the various segments of the industry range from 13 percent in hospitals, the largest and slowest growing industry segment, to 69 percent in the much smaller home health care services.

Employment in health care will continue to grow for several reasons. The number of people in older age groups, with much greater than average health care needs, will grow faster than the total population between 2004 and 2014; as a result, the demand for health care will increase. Employment in home health care and nursing and residential care should increase rapidly as life expectancies rise, and as aging children are less able to care for their parents and rely more on long-term care facilities. Advances in medical technology will continue to improve the survival rate of severely ill and injured patients, who will then need extensive therapy and care. New technologies will make it possible to identify and treat conditions that were previously not treatable. Medical group practices and integrated health systems will become larger and more complex, increasing the need for office and administrative support workers. Industry growth also will occur as a result of the shift from inpatient to less expensive outpatient and home health care because of improvements in diagnostic tests and surgical procedures, along with patients’ desires to be treated at home.

Hospitals. Hospitals employ workers with all levels of education and training, thereby providing a wider variety of services than is offered by other segments of the health care industry. About 3 in 10 hospital workers is a registered nurse. Hospitals also employ many physicians and surgeons, therapists, and social workers. About 1 in 5 hospital jobs are in a service occupation, such as nursing, psychiatric, and home health aides, or building cleaning workers. Hospitals also employ large numbers of office and administrative support workers.

Nursing and residential care facilities. About 2 out of 3 nursing and residential care facility jobs are in service occupations, primarily nursing, psychiatric, and home health aides. Professional and administrative support occupations make up a much smaller percentage of employment in this segment, compared to other parts of the health care industry. Federal law requires nursing facilities to have licensed personnel on hand 24 hours a day and to maintain an appropriate level of care.

Offices of physicians. Many of the jobs in offices of physicians are in professional and related occupations, primarily physicians, surgeons, and registered nurses. About two-fifths of all jobs, however, are in office and administrative support occupations, such as receptionists and information clerks.
Offices of dentists. Roughly one-third of all jobs in this segment are in service occupations, mostly dental assistants. The typical staffing pattern in dentists’ offices consists of one dentist with a support staff of dental hygienists and dental assistants. Larger practices are more likely to employ office managers and administrative support workers.

Home health care services. About 57 percent of all jobs in this segment are in service occupations, mostly home health aides and personal and home care aides. Nursing and therapist jobs also account for substantial shares of employment in this segment.

Offices of other health practitioners. Professional and related occupations, including physical therapists, occupational therapists, dispensing opticians, and chiropractors, accounted for about 2 in 5 jobs in this segment. Office and administrative support occupations and healthcare practitioners and technical occupations also accounted for a significant portion of all jobs—about 33 percent each.
Outpatient care centers. This segment of the health care industry employs a high percentage of professional and related workers, including counselors, social workers, and registered nurses.

Other ambulatory health care services. Because this industry segment includes ambulance services, it employs 2 out of every 5 emergency medical technicians and paramedics and ambulance drivers and attendants.
Medical and diagnostic laboratories. Professional and related workers, primarily clinical laboratory and radiologic technologists and technicians, make up about 43 percent of all jobs in this industry segment. Service workers employed in this segment include medical assistants, medical equipment preparers, and medical transcriptionists.

As in most industries, professionals and managers working in health care typically earn more than other workers in the industry. Earnings in individual health care occupations vary as widely as the duties, level of education and training, and amount of responsibility required by the occupation. Some establishments offer tuition reimbursement, paid training, child day care services, and flexible work hours. Health care establishments that must be staffed around the clock to care for patients and handle emergencies often pay premiums for overtime and weekend work, holidays, late shifts, and time spent on call. Bonuses and profit-sharing payments also may add to earnings. Earnings vary not only by type of establishment and occupation, but also by size; salaries tend to be higher in larger hospitals and group practices. Geographic location also can affect earnings.

Although some hospitals have unions, the health care industry is not heavily unionized. In 2004, only 11 percent of workers in the industry were members of unions or covered by union contracts, compared with about 14 percent for all industries. The American history is clearly linked to British practices like apprenticeships. The AMA originally formed as a union of state medical societies interested in improving the quality of medical education in the country (unsuccessfully). Part of the problem was the conflict of interest between the AMA members’ financial interests in the poor medical schools and the organization’s desire to close such schools. Changes in curriculum by Harvard & Hopkins in the 1890s requiring four years of formal training set the stage for a national survey and the dramatic changes that followed the Flexner Report in 1910.
Abraham Flexner visited every medical school in the United States and Canada and found little for America to be proud of. He recommended closing about 100 of them (he noted that the District of Columbia had three medical schools and only one of them had a reason for existence – Howard University School of Medicine. Urged the medical education community to rid itself of institutions that were run on a for profit basis.

Government support to medical education began in the 1960s when there was a perceived shortage of physicians. Since then the government has determined that we have too many physicians and stopped its support of post-grad training and now we are hearing the clamoring from medical school deans that we need more schools and larger classes. The average specialist has completed 26 ‘grades’ of schooling (12 thru high school; four college; four medical school; three residency and three fellowship).
How do you become a physician? The education of physicians in the United States is lengthy and involves undergraduate education, medical school and graduate medical education. (The term 'graduate medical education' [GME] includes residency and fellowship training; the American Medical Association does not use the term "postgraduate education.")

• Undergraduate education: Four years at a college or university to earn a BS or BA degree, usually with a strong emphasis on basic sciences, such as biology, chemistry, and physics (some students may enter medical school with other areas of emphasis).

• Medical school (undergraduate medical education): Four years of education at one of the U.S. medical schools accredited by the Liaison Committee on Medical Education (LCME). Four years at one of the LCME-accredited U.S. medical schools, consisting of preclinical and clinical parts. After completing medical school, students earn their doctor of medicine degrees (MDs), although they must complete additional training before practicing on their own as a physician. (Note: Some physicians receive a doctor of osteopathic medicine [DO] degree from a college of osteopathic medicine.)

• Residency program (graduate medical education): Through a national matching program, newly graduated MDs enter into a residency program that is three to seven years or more of professional training under the supervision of senior physician educators. The length of residency training varies depending on the specialty chosen: family practice, internal medicine, and pediatrics, for example, require 3 years of training; general surgery requires 5 years. (Some refer to the first year of residency as an "internship"; the AMA no longer uses this term.)
• Fellowship: One to three years of additional training in a subspecialty is an option for some doctors who want to become highly specialized in a particular field, such as gastroenterology, a subspecialty of internal medicine and of pediatrics, or child and adolescent psychiatry, a subspecialty of psychiatry.

After completing undergraduate, medical school and graduate medical education, a physician still must obtain a license to practice medicine from a state or jurisdiction of the United States in which they are planning to practice. They apply for the permanent license after completing a series of exams and completing a minimum number of years of graduate medical education. The majority of physicians also choose to become board certified, which is an optional, voluntary process. Certification ensures that the doctor has been tested to assess his or her knowledge, skills, and experience in a specialty and is deemed qualified to provide quality patient care in that specialty. There are two levels of certification through 24 specialty medical boards — doctors can be certified in 36 general medical specialties and in an additional 88 subspecialty fields. Most certifications must be renewed after six to 10 years, depending on the specialty. Learning does not end when physicians complete their residency or fellowship training. Doctors continue to receive credits for continuing medical education, and some states require a certain number of CME credits per year to ensure the doctor's knowledge and skills remain current. CME requirements vary by state, by professional organizations, and by hospital medical staff organizations. In 2003-2004, the average tuition and fees for first-year medical students at public schools was $16,172 for state residents and $33,653 for nonresidents. For students at private schools, average resident tuition was $32,488 and nonresident tuition $34,067. To these costs must be added possible tuition and fee raises, books, housing, and other living expenses during the traditional 4-year programs.

International Medical Graduates (IMGs; formerly FMGs) make up a sizeable proportion of the graduate medical education workforce (residents and fellows). Sometimes they represent the result of “brain drain” from their native country with the US benefiting from their capability; often they are willing to take positions that American graduates shun (inner city; mental institutions, etc.).

The primary reason for the number of slots greater than American graduates is = money. Graduate medical education workers perform highly skilled round-the-clock medical services far more cheaply than full-time board certified professionals.

While the ratio of physicians to population has increased, no one can say what the right number should be. Problems currently may be more with the distribution than the actual number (access, access, access!). In spite of several attempts to increase the number of generalists, specialty numbers have kept apace and the ratio has not appreciably changed. Other countries use a primary physician as the entry point for care in the system; some even ‘ration’ the number and placement of specialist positions. Cost pressures continue to mount; for every $1 of preventive services, America spends about $5 on advice lines, $15 on physician extenders, $50 or primary providers and $150 on specialty care.

State and national government efforts continue to try to push more medical graduates into primary care specialties by offering targeted loans, setting up practices in small towns and rewarding schools that place 50% of their graduates into primary care. Not solved yet: the disparity in reimbursement for non-procedural care (cognitive involvement) by specialists and generalists (generalists are re-imbursed less).
Medical schools develop their class size by the needs of their constituents (e.g., residents of the state) and not by national needs or trends.
Post-graduate trainees earn money for their employers so there is incentive to have them.

Residency Review Committees (RRCs) do not see it in their own interest to reduce the number of trainees in their specialty because of the money, power and prestige they bring ALTHO they sometimes see the need to reduce trainees as their own graduates begin to erode their practice base as competition in the local area.
Effect of managed care is increased emphasis of “population health”, less expensive ways of treating illnesses and increasing numbers of less expensive practitioners. Physicians are more likely to be employees (of HMOs) than independent practitioners and more likely to be part of teams caring for populations of patients rather than fighting disease one-on-one.

50% increase in total # of residency positions from 1971 to 1999

Medical schools and their affiliated hospitals have been forced to compete for patients by managed care plans (this has resulted in a downsizing of some medical schools and mergers of some others)

Future Trend: Growth in number of medical school graduates and Growth in the number of IMGs practicing within the US.

The U.S. healthcare system has changed significantly over the past 2 decades, affecting the environment in which nurses provide care. Advances in technology and greater emphasis on cost-effectiveness have led to changes in the structure, organization, and delivery of health care services. While hospitals traditionally were the primary providers of acute care, advances in technology, along with cost controls, shifted care from traditional inpatient settings to ambulatory or community-based settings, nursing facilities, or home health care settings. The number of hospital beds staffed declined as did the patient lengths of stay. While the number of hospital admissions declined from the mid-1980s to the mid-1990s, they increased between 1995 and 1999. At the same time, the overall acuity level of the patients increased as the conditions of those patients remaining in hospitals made them too medically complex to be cared for in another setting. The transfer of less acute patients to nursing homes and community-based care settings created additional job opportunities and increased demand for nurses.

RNs make up the largest group of health care providers, and, historically, have worked predominantly in hospitals; in 2000, 59.1 percent of RNs were employed in hospital settings. A smaller number of RNs work in other settings such as ambulatory care, home health care, and nursing homes. Their responsibilities may include providing direct patient care in a hospital or a home health care setting, managing and directing complex nursing care in an intensive care unit, or supervising the provision of long-term care in a nursing home. Individuals usually select one of three ways to become an RN—through a 2-year associate degree, 3-year diploma, or 4-year baccalaureate degree program.

Current problems with the recruitment and retention of nurses are related to multiple factors. The nurse workforce is aging, and fewer new nurses are entering the profession to replace those who are retiring or leaving. Furthermore, nurses report unhappiness with many aspects of the work environment including staffing levels, heavy workloads, increased use of overtime, lack of sufficient support staff, and adequate wages. In many cases this growing dissatisfaction is affecting their decisions to remain in nursing.

Lecture 11: Hospitals and Health Systems

1. Discuss major periods in hospital industry transition in the U.S.

During the 1800’s – 1900’s, there were 6 major developments:
Advances in medical science increased the efficacy and safety of hospitals
Technology and specialization of medicine
Development of professional nursing
Advances medical education added teaching and research to hospital’s role
Growth of health insurance industry (stable $$)
Government influence

Over the last 25 years, Our US health care system has encountered the following challenges:
Payment shortfalls for Medicare and Medicaid
Worker shortages
Rising demand and constrained capacity
Rapidly rising costs
Decreased access to capital
Increase in uncompensated care
Regulatory burden

2. List and account for the trends in system indicators of hospital usage.

Total national health expenditures have exponentially increased over the last 25 years from roughly 200 billion to 2 trillion dollars (2,000 Billion) with inflation adjusted expectations settling around 800 billion. With an ever-increasing amount of money spent on healthcare, there is a shift in the way the health care dollar is distributed. Most notable changes seen with prescription drugs doubling their share of the pie from 5% to 10%, home health care from 1% to 2.5%, and a drop in hospital care from 43% to 33%. Also health care expenditures by payment source have changed drastically oveer the last 25 years. Out of pocket form 24% to 13%, private insurance from 28% to 35%, Medicaid from 11% to 16%. Medicare has expanded it coverage of beneficiaries from 29 million to 41 million. Medicaid has more than doubled it enrollees from 25 million to 57 million. Uncompensated care increased from 19 billion to 25 billion. Number of ED visits increased 88 to 112 million while the number of ED decreased from 5,100 to 4,600. Medical technology expense has increased. Workforce shortages continue and speculate to be worsening over time.

3. List and account for trends in development of health care systems.

Reduction in the number of hospitals
Reduction in hospital capacity
Increase in the number of inpatient admissions and the number of outpatient visits
Increase in hospital reliance on outpatient revenue
Increase in the number Medicare and Medicaid enrollees
Increase in number of ED visits
Rapidly rising costs, decreased access to capital

These changes in health care systems reflect changes in hospital usage addressed in the previous question.

Lecture 12: Health Care Technology and Informatincs

1. Describe key concepts in health technology assessment.
- defined as the systematic evaluation of properties, effects, and/or impacts of healthcare technology. May include a focus on safety, efficacy, feasability, indications for use, cost, and cost effectiveness of health technology.
-HTA is an interdisciplinary effort using many analysis methods
-Purpose of HTA -

2. Discuss the birth and maturity of health technology assessment within the United States.
-evolved in the 1960's to assess new engineering processes. Transitioned over to science and medicine by 70's when Congress commissioned specific studies. Office of Technology Assessment opened in 1973 to research how technology makes an impact. Early tech assessments in health included in vitro fertilization and behavioral modification by neurosurgery. Private industry began to use TA to help marketplace competition and corporate decision-making.
Ten basic steps of HTA —1.identify assessment topics, 2. specify the assessment problem, 3.determine focus of assessment, 4. retrieve the evidence, 5. collect primary data, 6. appraise/interpret evidence. 7, integrate evidence, 8. formulate recommendations, 9. disseminate recs, 10. monitor impacts

3. Understand the key constraints and current issues in health technology assessment.
— no standard approach to analysis of issues, may make things more complex. Often times randomized controlled trials not used for data(although this may not hurt internal validity). HTA limited by financial and time constraints. Must stay within organizational responsibilities to focus on role of HTA program. Must make difficult decisions regarding where fixed allocations of funding are used.

4. Describe the various types, and terminology associated with, the concept of informatics.
— Informatics deals with the storage, retrieval and the optimal use of information, data and knowledge in order to facilitate problem solving and decision making. Example of informatics related to health systems involve biomedical, clinical, nursing, imaging and public health informatics.

5. Describe how informatics applications are changing health care delivery and research.
— The application of informatics can positively influence patient outcomes by introducing more evidence into clinical practice, decreasing errors, facilitating problem solving, educating practitioners, empowering patient involvement in care and coordinating care between providers.

6. Describe how informatics plays a pivotal role in the translation of research into clinical practice.
— Informatics applications are critical in the management and organization of massive amounts of medical information and knowledge. By utilizing informatics, clinicians can efficiently extract and employ knowledge resulting from research.


Lecture 14: The U.S. Health Services Delivery System and Health Promotion/Disease Prevention

1. Describe the continuum of health services.

Prenatal care, health promotion, primary prevention, disease diagnosis, secondary prevention, acute care, mental health care, tertiary prevention, chronic illness care, rehabilitative care, long term care

2. Describe the breadth of public health, health promotion, and preventive medicine practice in the U.S.

Public health – emphasizes the prevention of disease, the promotion of health, the reporting and control of communicable diseases, the responsibility for environmental factors such as air and water quality that affect the public’s health, and the collection and analysis of vital event data to provide indicators of the public’s health.
The responsibility of public health is divided amongst the federal, state, and local levels. The national responsibility for public health resides within the Public Health Service (PHS); state and local governments have established health departments to deliver and regulate public health services.

Health promotion – is the science and art of helping people change their lifestyle to move toward a state of optimal health, which includes the balance of physical, social, emotional, spiritual and intellectual health. Changes in lifestyle may be facilitated through a combination of efforts to change behavior, enhance awareness, and create environments that support good health practices

Preventive medicine – includes primary prevention (health enhancement and hygiene), secondary prevention (early detection), and tertiary prevention (therapy to prevent sequelae or reoccurrence)

3. Describe the content and technology of public health practice, with an emphasis on its application to under served populations in a community.

The Emerson report in 1945 identified six public health functions that both state and local health departments should be expected to perform: vital statistics, public health education, environmental sanitation, laboratory services, prevention and control of communicable diseases, and maternal and child health services. The IOM in 1988 recommended a three-part governmental role in public health: (1) assess the health of the community; (2) develop comprehensive public health policy; and (3) ensure the provision of needed health services.

4. Articulate the functions of national, state and local public health providers/agencies.

• Federal level: Public Health Service; Military Health system; VA
• State public health functions: Communicable disease control; maternal and child health services; environmental sanitation; health education; laboroatory services; vital statistics’ cancer tracking; chronic disease control; nutrition services; occupational health; mental illness; facility licensure
• Local level: direct health services (immunizations, screening, clinics, counseling, STD treatment); Environmental services (vector control, waste management, water purity, emergency environmental response); Inspection/accreditation ( health facilities, recreation facilities, food and milk control, restaurants)

5. Describe the major categorical functions of public health in relation to the year 2010 national health goals.

• Goals of Healthy People 2010: To increase quality and years of healthy life; To eliminate health disparities
• Major functions of public health relate to leading health indicators: physical activity; overweight and obesity; tobacco use substance abuse; responsible sexual behavior; mental health; injury and violence; environmental quality; immunization
• Major functions involved: health promotion, population health, and disease prevention

6. Describe the links between public health & medical care.

• Preventive Services Task Force under HHS provides the Guide to Clinical and Preventive Services to facilitate use of preventive services by clinicians
• Changing influence of managed care, with emphasis on support of health promotion, health protection and disease prevention, reinforce public health functions
• Recommendations of other agencies directly influence medical care (CDC, FDA)

7. Discuss how public health activities strengthen the community's health status and interrelate to public and private human service agencies.

• Several voluntary agencies involved in public health which strengthen community health, such as professional organizations (AMA, religious organizations); disease-specific organizations (American Heart Association, American lung association, leukemia foundation); population specific agencies (AARP, Red Cross); philanthropic foundations (Kaiser foundation, Robert Wood Johnson foundation)
• Public health activities such as reportable disease monitoring directly effect community health

Lecture 15: Levels of Care

1. Discuss current issues in primary care, secondary care, and tertiary care.


Primary Care: Basic or general care, traditionally provided by family practice, pediatric and internal medicine providers. (Barton, p. 535)

Primary care: Defined (with key issue terms underlined)
“The provision of integrated, accessible health care services by clinicians who are accountable for addressing a large majority of personal health needs, developing a sustained partnership with patients, and practicing in the context of family and community (Institute of Medicine, 1994).” [Lecture ppt]

Secondary Care: Specialist-referred care for conditions of a relatively low level of complication and risk. May be provided in an office or hospital and may be diagnostic or therapeutic.
(Barton, p. 539)

Tertiary Care: Highly specialized care administered to patients who have complicated medical conditions or require high-risk pharmaceutical treatments or surgery by specialists and subspecialists in a setting that houses high-technology and intensive care services. (Barton, p. 541)

Quaternary Care: Advanced levels of high-technology services, such as burn units or other specialty care, usually offered by academic health centers or other teaching facilities. (Barton, p. 537)

Levels of Care (defined by type of prevention—per lecture ppt)
• Primary – seeks to decrease the number of new cases of a disorder or illness
• Secondary – seeks to lower the rate of established cases of a disorder or illness in the population (prevalence)
• Tertiary – seeks to decrease the amount of disability associated with an existing disorder

Major Points: [Lecture ppt]

• Shifts in demographics, disease, and financing of health care have influenced levels of care
• AMCs operate in an environment of constraints and challenges
• Where one obtains care within the various levels of care depends on several factors – some settings more costly than others
• Primary care also faces substantial challenges…how (and if) we address these challenges matters!
• EMR implementation will influence care delivery at various levels
• Despite challenges in delivering care – practice/organizational survival possible through innovation

2. Account for trends in usage patterns of different levels of care.

Increasing use of ambulatory care in the U.S. today due to the fact that “Complexity increases the cost of care” as follows: [Lecture ppt]

ICUs cost more than General Medicine Wards, Wards cost more than Observation Beds, Observation Beds cost more than Clinic visit, Specialty clinic visit costs more than General

[“More training, more equipment, more time, more people, older patients, more drugs, more diseases” with increasing levels of care. ]

3. Explain distinguishing characteristics of Academic Health Centers from other providers of high levels of health services.

Distinction between Academic Medical Centers vs. Academic Health Centers [NOT likely to be on exam per LCDR Gimbel] is that an Academic Medical Center (AMC) is a large tertiary care teaching hospital (e.g. NNMC) whereas an Academic Health Center (AHC) INCLUDES an AMC PLUS a medical school PLUS a training center for NURSING and ALLIED HEALTH personnel.

Definition: What are academic medical centers (AMCs)? [Lecture ppt]

• Large referral centers
• Specialty equipment and specialists
• Focus on training, education and research
• Trauma centers and neonatal intensive care
• Complex surgical and medical cases
• Fed by ERs, community hospitals and group practices

4. Understand policy issues related to primary care, secondary care, and tertiary care

LCDR Gimbel’s clarification [my interpretation]:

Multiple Policy issues pertain to levels of care:

• Policy makers seek to incentivize appropriate levels of care for patients
• Appropriate COST x QUALITY for a specific patient
• Multiple policy factors in ensuring delivery of high quality primary care
- Electronic Medical Record (EMR)
- Implementation of quality controls based on EMR
- Push vs. Pull models for medical information (see informatics lecture)
- [LWS: Coders doing added RVU coding based on provider’s note rather than provider having to burn clinic time on a hunt for codes that reflect the clinical
encounter…supposedly AHLTA will soon have this capability if funded.]
• Ensuring appropriate funding/reimbursement for primary care, other levels
• Ensuring staffing with correct training and qualification at each level
• Appropriate mix of specialty vs. primary care physicians and other providers
• Influencing mix of specialists versus primary care by shifting funding from overrepresented GME specialty programs to primary care emphasis GME programs.

Major Points: [Lecture ppt]

• Shifts in demographics, disease, and financing of health care have influenced levels of care
• AMCs operate in an environment of constraints and challenges
• Where one obtains care within the various levels of care depends on several factors – some settings more costly than others
• Primary care also faces substantial challenges…how (and if) we address these challenges matters!
• EMR implementation will influence care delivery at various levels
• Despite challenges in delivering care – practice/organizational survival possible through innovation

Lecture 16: Long Term Care

1. Identify the unique aspects of the long-term care environment.
Consider the aging of America's baby boomers, particularly the projected increase in the oldest of the old (> 85 years-old).
Demand for long-term care for the elderly projected to double in the next 30 years.
Today's nursing home residents are generally older and more ill than previously.
The continuum of care includes a variety of settings, including skilled nursing facilites, home health care, hospice care, community care services, and adult day care.

2. Describe the payment mechanisms for long-term care.
Nursing homes — Medicaid >50%, out-of-pocket 30%, Medicare 12%, third-party 8%
Home care — Medicare 32%, Medicaid 13%, State/local govt 16%, oop 18%, private 18%
Adult day care — oop, third-party, public/private philanthropy
Hospice — Medicare 70%, Medicaid 5%, private 10%

3. Understand policy issues related to long-term care.
Although the elderly are the only group of US citizens with universal entitlement to health care through Medicare, long-term care benefits are not included. The Medicaid safety net provides services which vary by state.
Financial burden on families: more than 25% of long-term care costs are paid directly. No sinurance system exists to spread the financial risk; unpaid family caregivers are changing their work schedules and experience physical/mental problems related to caregiving.
Elderly people may go without care due to expense, difficulty finding care, or ineligibility based on income or medical criteria. 1/5 adults with long-term care needs are unable to get the care they need.
Medicare/Medicaid fiscal "tug-of-war."
"Policymakers continue to face an array of complex policy problems regarding the balance between nursing home and home care, assurance of quality, integrating acute and long-term care, and affordable access."

Lecture 17: Complementary and Alternative Medicine

1. To define complementary and alternative medicine (CAM).
a. CAM: A group of diverse medical and health care systems, practices, and products that are not presently considered to be part of conventional medicine
b. Complementary Medicine. Treatment used together with conventional medicine.
c. Alternative Medicine: Treatment used in place of conventional medicine. An unrelated group of non-orthodox therapeutic practices, often with explanatory systems that do not follow conventional biomedical explanations
d. There is no ‘alternative’ medicine. There is only scientifically proven evidence-based medicine supported by solid data, or unproven medicine for which scientific evidence is lacking.
e. Once a treatment has been tested rigorously, it no longer matters whether it was considered alternative at the outset. If it is found to be reasonably safe and effective, it will be accepted.

2. To list major forms of CAM therapy used in North America and the conditions for which patients use them.
a. Who uses CAM?
i. 6 - 80 % of use world wide
ii. 40% of Americans use (50% of women)
iii. more visits than to primary care (600M)
iv. "minor" - self care, weight loss, pediatrics
v. 50% of cancer patients; AIDS users
vi. Paid - $10.3B in 1990; $24B in 1997
vii. Concealed - 72% don't talk about it to doctor
viii. Combined - 83% used conventional
ix. When prayer specifically for health reasons is excluded from the definition of CAM, 36% of U.S. adults used CAM during the past 12 months

b. What are major forms of CAM?
i. prayer specifically for one’s own health (43.0%)
ii. prayer by others for one’s own health (24.4%)
iii. natural products (18.9%)
iv. deep breathing exercises (11.6%)
v. participation in prayer group for one’s own health (9.6%)
vi. meditation (7.6%)
vii. chiropractic care (7.5%)
viii. yoga (5.1%)
ix. massage (5.0%)
x. diet-based therapies (3.5%)

3. To understand the reasons for CAM use by patients and how to inquire about such use.
a. Desire for health and wellness
b. Prevention of aging
c. Sense of empowerment, authenticity
d. “Purification” of self, return to simplicity from technological society
e. Vitalism- enhancement of own “life forces”
f. Tradition- relying on the history of human experience
g. Connection between health and spirituality
h. Numerical Data:
i. To control pain 87%
ii. Heard it will help 86%
iii. CAM is safe and will not hurt 72%
iv. Helped someone else 62%
v. Prescribed medication not working 46%
vi. Will cure my condition 10%
Social Factors:
i. Increased prevalence of chronic disease
ii. Increased access to health information
iii. Increased fitness movement with health promotion
iv. Increased democratization of medical decision making
v. Increased concerns over side effects and costs
vi. Increased heterogeneity of population
vii. Increased pluralism in health care systems
viii. Increased profit-making corporation participation
ix. Decreased conventional medicine monopoly
x. Decreased faith in scientific breakthroughs

4. To identify the role of the conventional physician in inquiring about CAM use by patients, including searching and critically analyzing the research literature on CAM.
a. How Physicians can inquire about CAM:
i. Always ask! “What else are you doing for your health?”
ii. Be open and nonjudgmental.
iii. Consider patient preferences and values.
iv. Encourage self-monitoring of results.
v. Coordinate care as appropriate.
vi. Be honest about your lack of knowledge and open to education.
vii. Monitor safety and efficacy, arrange follow-up.
viii. Document all discussions and advice.
b. Physician responsibilities:
i. Protect
1. from toxic therapies: meditation vs. megavitamins
2. from ineffective therapies: substitute for effective
ii. Permit
1. if safe, inexpensive: homeopathy vs. herbalism
2. if helps disease management (non-specific effects)
iii. Promote
1. if safe and effective: P6 for nausea; relaxation for pain
2. do we know mechanism ?
iv. Partner
1. communicate with patient
2. co-manage illness
3. provide the input on evidence
c. Analyzing CAM Research:
Evaluate efficacy and safety in the literature, and discourage patients from using products/therapies that are not safe or effective.

Lecture 18: Mental Health Care

1. Understand the complex history relating to the development and current status of mental health delivery systems within the U.S.
2. Understand public health strategies and approaches to reduce mental health disparities, improve quality of treatment and aftercare services, and promote mental, social and emotional wellness.

Common themes in defining mental health include positive states of well-being, adequate coping and adaptation skills, economic productivity, and fulfilling relationships. In contrast, mental illness is defined as changes in one’s emotions, cognitions or behavior that cause distress and impaired functioning.

Diagnostic Groups of Mental Illness:

  • Anxiety Disorders -Panic Disorder, Obsessive-Compulsive Disorder (OCD), Posttraumatic Stress Disorder (PTSD), Generalized Anxiety Disorder (GAD), and Specific Phobias are often comorbid with affective and substance abuse disorders.
  • Affective (Mood) Disorders - Major Depressive Disorder (MDD), Dysthymic Disorder, Bipolar Disorder, Cyclothymia, Premenstrual Dysphoric Disorder (PMDD)
  • Thought Process Disorders (Psychoses) - Shizophrenia, Schizophreniform Disorder
  • Cognitive Disorders - Alzheimer’s Disease is the most common cause of dementia in those 65 years old and older. Those with Alzheimer’s survive half as long as their non-Alzheimer’s counterparts.
  • Also Substance Dependence, Somatoform Disorders and Disorders of Childhood
  • Suicide - In 2004, there were 32,439 completed suicides, with the highest rates in white males over age 85. Though women attempt suicide 2-3 times more than men, men die 4x more than women.

Making Diagnoses:
Criteria for mental illnesses delineated in the DSM-IV (Text Revision). The Structured Clinical Interview for DSM-IV is a kind of decision tree in establishing diagnoses and is consider the gold standard for research in terms of identifying cases. Though there are many objective tests utilized in psychology, most diagnoses are made on interview, with the focus on symptoms on self-report.

Factors Influencing Mental Illness:
Biological, such as genetics and possibly infectious etiologies
Psychological, as interpreted in psychodynamic theories, behaviorism, or social learning theories.

Mind Body Connection:
Psychological and physical health are intertwined and the reason why we have in the psychiatric diagnostic system and Axis III that lists medical problems is that medical problems and mental illness do not exist in isolation of one another, but are intertwined with environment to create illness. (The example was made of cardiovascular disease and mental illness each being made worse by the other.)

History of Mental Health:
Mental illness was once often seen in magical or religious terms, with mythical beings, possession and witchcraft often explain behavior that deviated from societal norms. In time, mental illness was seen as a medical condition, amenable to medical treatment. In the U.S. much of the push came from the VA system as they began to treat World War II veterans with mental illness. The National Mental Health Act of 1946 created the National Institute of Mental Health (NIMH) and thus a larger Federal interest in mental illness. As psychotropic medications were developed in the 1950’s, mental health institutions grew in number, though ultimately in the U.S., they would close down in subsequent decades as the U.S. moved to focused on outpatient treatment of mental illness.

23-30% with mental disorder in a year (including substance dependence). 15% of adults and 21% of children access the mental health care system, but this includes treatment in primary care, specialty services, and the voluntary support network sector. In general however, most receive little or no treatment. Most treatment goes to those with chronic conditions or significant morbidity.

Mental Health & The Military:
Troops deploying to combat zones report higher rates of mental distress than those who deploy, and those with mental illness are administratively separated at higher rates than their counterparts with other illnesses.

U.S. Mental Health Care System:
Four Sectors: Specialty mental health care (i.e. psychologists and psychiatrists), Primary care (family physicians, internists), Human services (prisons, schools, religious groups), Voluntary support network (self help groups and organizations). Financing comes from the public sector as well as private insurance and employee assistance programs.

Psychotherapy – psychoanalysis, cognitive behavioral therapy (CBT)
Biomedical – psychopharmacology, electroconvulsive therapy (ECT)

Cultural Diversity:
Cultural values, beliefs, and biases of both providers and patients can negatively affect access to appropriate mental health treatment. Culture bound syndromes exist where symptom clusters generally are found in specific ethnic groups.

As an example, African-Americans often enter treatment later than other groups, are over-represented in inpatient care, and access the system through emergency departments. However, racial differences in utilization patterns disappear after controlling for SES. As another example, Asian-Americans exhibit low treatment-seeking behavior. Identified barriers to care include lower treatment seeking behavior, mistrust, stigma, cost and clinician bias.

Burden of Disease:
50% of Americans will develop one or more mental disorders in a lifetime, and 1 in 4 meet criteria for a mental illness in any given year, though only 13% receive adequate care.

Lecture 19: Quality of Care

1. Discuss the importance of the need for health care quality and performance

Basic concept: Value = Quality / Cost

Important for patient safety, accreditation, & reporting to higher HQs and public

(See notes on quality & performance measurement)

2. Describe key people and events in the history of health care quality measurement and improvement.

• Ignatz Semmelweis
o Vienna, 19402
o Handwashing and puerperal fever
o Ineffective communication & personality issues …

• Florence Nightingale
o Reported high mortality among London hospitals
o “poor grasp of statistics”

• Ernest Codman
o Boston 1912-1920
o Anaesthesia record
o Wanted hospitals to report surgical outcomes
o Lost privileges at Mass Gen
o Later founded American College of Surgeons

• Chicago Bell Labs 1930-1950
o Walter Shewhart, W. Edwards Deming
o Statistical Quality / Process Control
o Enormous success when applied to manufacturing
o Applications to health care (2LQ): cost control, medical errors

• IOM and WHO reports on patient safety
o “To Error is Human: Building a Safer health System” IOM 1999
o “Crossing the Quality Chasm” IOM 2001

Measuring Quality of Care – 2LQ
• Statistical comparisons – look for ‘outliers’
• Practitioner focus
• Unidisciplinary
• Doesn’t address root causes
• Retrospective look at “wrongs”
• Punitive nature

Measuring Quality of Care – 3LQ (1980s) – Deming, Baldridge
• Emphasized customer feedback and satisfaction
• Focus on understanding and improving underlying work processes and systems
• Measurement of performance in several steps of ‘the process’

Measuring Quality of Care – value approach
• Patient perspective
• Provider prospective

Current Measures – triangle with patient, cost and quality
• Patient feedback
• Cost – must measure episode and continuum; include cost-avoidance
• “Quality”
o Structure
 accreditation
 providers - % board qual
 workload volume
o Processes
 waiting time (access)
 screening/preventive measures
 chronic disease management
o Outcomes
 mortality rates
 admissions
 BDOC (biodegradable dissolved organic carbon? I must have dozed off …)

3. Discuss the difference between measuring “Quality” of care and “Performance”.

Justice Potter Stewart: “In the eyes of the Beholder”

Robert Brook: “You can’t measure quality … So go for the lowest price!”

Performance measurement – given that you can’t measure “quality” directly, choose a few critical important costs, processes or outcomes, and follow them closely

4. Describe the characteristics of an impressive health care system improvement.

• Performance measurement
o Focus on a critical few
o Use a dashboard to monitor indicators
o Cascade measures downward – explore processes through hierarchical and departmental levels – probe causes of errors
o Reward accountability

• Several methods have been used to improve quality
• We measure performance – and indirectly allow the determination of quality
• Focus on outcomes was not as useful as focus on processes
• Systems approach
• Must study cohorts to avoid missing effects that may crossed levels of care (ambulatory, surgery, rehab, long-term, palliative)
• Success comes from measurement, change, and re-measurement
• Commit adequate resources to error prevention
• Solutions often come from unexpected sources
• Leadership and organizational culture !

Specific examples: decreased mortality in anesthesia; injury rates at ALCOA

Lecture 20: Patient Safety

1. Define and evaluate the role of quality of care in patient safety.

Institute Of Medicine

  • Patient Safety - Freedom from accidental injuries during the course of medical care; activities to avoid, prevent, or correct adverse outcomes which may result from the delivery of health care.
    • IOM
    • 2.9-3.4% Preventable adverse event rate (Canadian study 2004- 7.5%)
    • 44,000 - 98,000 people die each year from preventable medical errors (50-60% are preventable)
    • Total national cost $17-$29 billion
    • 42% of Americans have experienced a medical error
    • 8.1 million American families (1 out of 5) have experienced a serious medical or drug error
    • Likelihood of experiencing a medical error increases 6% for each day of hospital stay

2. Describe the role of various systems and factors in creating safety and in causing errors and adverse events.


  • Large numbers of healthcare staff involved in provision of care
  • Multiple transitions
  • Deficient patient and provider communication
  • Deficient provider to provider communication


  • Stress/fatigue/distraction
  • Volume of information
  • Multi-tasking
  • Time constraints (need for rapid decision-making)
  • Higher acuity of illness (In patient/Out patient)


  • Poorly designed or non-functional process
  • Barriers (communication) - uncoordinated patient and information flow (critical information)


  • Use unfriendly information technology


  • Productivity priority
  • Hierarchical structure
  • Infrastructure support
  • Staffing
  • Expectation - Inappropriate delegation, lack of awareness of true level of knowledge-skill of staff


3. Discuss problems and issues in measuring and reporting safety

  • Six Sigma = 3.4 errors/million exposures
  • Medicine runs 1 error/2000 exposures
  • 1 in 20 chance of being injured if hospitalized
  • 1 medication error per patient per hospital day
  • Organizational Silence
  • "Collective level phenomenon of saying or doing very little in response to significant problems that face an organization"
  • Less than 10% of physicians, nurses and clinical staff confronted a colleague when they became aware of poor clinical judgement or shortcuts that could result in patient harm
  • 20% of physicians stated they had seen harm occur to a patient as a result of the observed but not commented upon act
  • Healthcare starts from a baseline of low process reliability
  • Lack of an understanding between process and outcome
  • Standardization conflicts with issues of physician autonomy
  • Lack of an understanding (direct connections) between an action and apparent result
  • IHI has defined any process with less than a 80% success rate as chaotic or with lack of defined reliability-focused processes

4. Discuss the current state of safety and quality, and how to translate national research into actionable improvement activities.


  • "A system is a regularly interacting or interdependent group of individual items forming a unified whole"
  • Develop a culture of safety
  • Engage practitioners and staff - Establish a sense of pride and ownership in the work services. Create an environment that is open, honest and respectful for everyone in the system
  • Engage patients
  • Measureable improve outcomes and patient safety
  • Create a transparent learning organization
  • Continually assess real costs; remove/prevent waste and rework

Lecture 21: Comparative Health Systems

1. Describe the principal organizations, institutions and services involved in the provision of health care in health systems throughout the world.
2. Discuss the differences in the financing and the organization of health care services among countries at different levels of income and development.
3. Describe how personal and cultural values and beliefs affect expectations of health care.
4. Assess the impact of globalization on health system development.
5. Analyze the U.S. health system from a comparative perspective.

Lecture 22: Future of Health Services

1. Discuss health services trends

• It is unlikely we will have dramatic change in the US health system in our lifetime.
• Americans will seek “work arounds” for the purpose of:
a. Increased access to health care services
- medical tourism/ “patients without borders”
- specialty hospitals
b. Decreased personal financial contribution to the cost of care
c. Increased quality of outcomes
- increased emphasis on primary care (PCM)
~ bridges overlap of clinical medicine and public health
~ informed healthcare decision making
~ shared medical decision making with patients

2. Describe the continuing change in the U.S. health services delivery system

• Movement toward integrated systems of care delivery of the 1990’s has halted
• Alliances/networks being dismantled
• Hospital streamlining and belt tightening has resulted in reduced capacity in some areas (decreased beds, ER closings, workforce reductions)
• Surplus of physician specialists has led to some medical school curricula changes to train generalists
• HMOs curtailed use of prior authorizations (not cost effective) and less gatekeeping practices (did not change specialist use)
• Gradual climb of public sources of health insurance (Medicare)- aging population
• Increased out-of-pocket costs for patients
• Benefit reductions/ increased co-payments
• Public and private payers will look for ways to curb outlays for health benefits
o Defined contribution- payer provides a standard dollar amount of health benefits to subscribers (individuals who desire more benefits than can be purchased with defined contribution will pay out-of-pocket)
o Premium support- provides standard premium amount for beneficiaries with which to purchase inpatient and outpatient services (additional benefits out-of-pocket)
o High deductible plans and HSAs
• Increased research in evidence-based health services

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