This is the healthcare delivery providers part of the healthcare marketplace specialization. This is module 1.2.6 Payers for Healthcare delivery. Learning outcomes for this lecture are to understand who pays for healthcare delivery in the US and then understand the concept of insurance payment versus a customer or a patient paying out of pocket for the health care expense. Private Health Insurance, PHI, Medicare Advantage plans, or MA. So in our last lecture we looked at how the payment for some of the healthcare providers is calculated. And in this lecture we will look at who pays for the healthcare provider. So a lot of the times it's private health insurers. So these are insurance companies that are private. Or sometimes it's the governmental programs. For example, social welfare programs that we have in the US. So let's look at those. This is a chart taken from MedPAC that we have talked about before. Which looks at the types of purchasers or insurance companies that pay for healthcare in the US. So private health insurance companies 34%, Medicare 22% Medicaid, 17%. And some of the other payers that make up the total 2.5 trillion in 2013. Let's begin with Medicare. This is the largest governmental payer. It is a national social insurance program that was introduced in 1966. It covers and pays for medical expenses for individuals 65 years and older who have worked and paid into this pot of money that is used to pay out these expenses. Also, it covers some other individuals, for example, younger patients with disabilities or some other very complicated conditions. For example, end stage renal disease, which is a type of kidney failure that typically needs dialysis or kidney transplant. The next biggest governmental program is Medicaid. This is a social insurance program jointly funded by the Federal government and the State government, and it is run and managed by each of the 50 states. This particular program is geared towards individuals and families who have low income and very limited resources. So these are the types of individuals, and some of them have disabilities and other needs, but these are the types of individuals and families that benefit from this particular social program. One of the largest payers of healthcare expenditures in the US are private health insurance companies. So these are companies that pay for medical expenses in the form of healthcare insurance. These can be purchased by either individuals in the market or as is emerging in the last couple of years, over health insurance exchange, or HIE. Or these can be purchased in groups of individuals. For example employees through the employer. So mostly there are purchased through the employer of groups of individuals that is their employees. Now, some of the newer emerging models in private health insurance that you've heard about in the previous course are high deductible plans, where the deductibles are higher, and so, the premiums might be lower and these will only pay for catastrophic illnesses and not for the routine medical expenses. So that's a tradeoff that individuals and families have to make. Another new emerging idea is the tax preferenced health spending accounts or HSAs where individuals and families can put away some money that is tax preferenced, and then use it for paying off medical expenses. So sometimes these are used in combination. And so again, the direction that a lot of these various models are going is to start shifting some of the cost and hence some of the accountability of the health care expenditure directly to the individual and their families. Let's do a short quiz. Let's look at some more data from MetPak as we've discussed. This particular chart looks at Medicare spending in 2013, and I want you to notice how Medicare versus Medicaid versus other insurers differ in the various categories of providers. So for the hospital the other is the highest amount. Medicare and Medicaid are lower. For physicians, again, the other insurances, pay much more than Medicare and Medicaid. However, for nursing home, you will notice that Medicare and Medicaid are getting much higher, but still a chunk is paid by other insurance, for example long term care insurance that some individuals buy. Home health care is really dominated by the governmental payers of Medicare and Medicaid, and so on and so forth. This particular chart, also from MedPAC, shows that the spending by the government in the form of Medicare is concentrated in certain services. And is slowly shifting as the health care delivery system changes. So managed care is increasing, again. Medicare also partners with private insurance companies through Medicare Advantage plans, and uses these private insurance plans to do case management and also administer some of the medicare dollars, the inpatient hospital has significantly gone down and we saw that in the previous lectures as well. The physician fee schedule has also changed slightly and as you can see, the total spent from 2006 to 2013 has significantly increased to $574 billion with a b. Particular chart also from MedPac shows a very important point in payers and payment in that there's a very small percentage of beneficiaries or individuals here for Medicare, it's 1%, that are driving 15% of the program spending and the next 4% is driving 24% of the program spending. So, between these 5% of individuals, the spending is almost close to 40%. So the very highly complicated individuals are obviously the very costly ones, and they drive the entire national expenditure. In summary, the governmental payers of Medicare and Medicaid and the private health insurance companies pay for most of the healthcare delivery expenses. Some emerging models like the high deductible insurance plans and other programs are shifting the cost and the accountability to the consumers, the individuals and the families. And that is directly impacting the behavior of the individuals, the families but also on the mega health care delivery system, as we shall see in the upcoming lectures.
