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Abstract
Purpose
The purpose of this paper is to identify how the health care budget is severely impacted by health care prevention & intervention, fraud initiatives, and insurance reforms. All these are initiatives that have been formulated to reduce the strain that health care is having on the pockets of the majority of Americans. Insurance costs are estimated to cut into the pay of most workers with many families living on the edge as one accident or illness can easily ruin these families financially and emotionally. Past initiatives have been formulated but implementation has become the real challenge as has been noted by both policymakers and also the public. Prevention techniques and methods can greatly reduce the amount spent by families, employers, insurers, and the government in combating common diseases. Another cause of concern is the cost of insurance as many families remain uninsured in the face of increasing risks and unemployment. This paper will detail the successes of initiatives formed through policy and also through insurance companies and how the public stands to benefit in terms of cost reduction.
Methodology
The paper will first address the factors driving the cost of healthcare in America and the budget estimates. We will also look into how the prevention rather than treatment initiatives drive down the cost of healthcare. Insurance companies also stand to drive down the cost of premiums charged to their customers. This is all because the general health of the population is bound to improve when initiatives are implemented.
Conclusion
There is considerable impact on the budget through the above-said initiatives.
Introduction
Health care in the United States is wide and very complex due to the many factors and impact of stakeholders have on legislation and practice. Health care in the country is the most expensive in the world when compared to other health care systems around the globe. Delivery of health care services to the citizens is propagated through partnerships between various healthcare providers and insurance firms that cover the individuals. Up to recent times, unfortunately only a small number of individuals are covered by medical insurance (Cameron, 2009).
One of the biggest challenges and continuous need for preventive care are the challenges associated with demography are continually being faced by health care organizations and governments in the provision of health care to the masses. A growing population in the United States has to be taken care of by sufficiently extensive medical cover and this comes at a cost to both the government and the medical organizations as facilities are stretched to the limit (Behan, 2006). This fact is made more difficult by the increase in the population of women, as it is assumed by researchers and scholars that there will be a higher need for medical facilities to cater more to the women population. A good example of how the population has changed over the years is how in the early 1900s there were about ninety-six men for every one hundred women. In 1979, there was a dramatic drop as we now witnessed forty-five men for every one hundred women and it is estimated that there will be about thirty-nine men for every one hundred women above eighty-five years old in the second part of this decade. Change in demography is also being witnessed through the rising number of the immigrant population from all over the world. With low monthly incomes, immigrant families are placing a strain on the delivery of health care as some minority populations are more prone to certain diseases. It is estimated that a higher concentration of Hispanic women are prone to cervical cancer and this fact has manifested itself in the Texas state where over half of all cervical cancer cases are reported from Hispanic ladies.
Health caregivers have to contend with various factors and challenges to improve health care in America. We should not lose sight of the benefits that the population stands to benefit from if given a chance to ratify the issues we still have with current policies.
Prevention and Intervention Initiatives
One of the main sources of a family budgetary drain on American pockets is the high cost of health care. Scores of families are sickness or disaster outside financial destruction. Health insurance costs lessen workers pay to an extent that is both underappreciated and pointlessly huge. In the same instance, health expenses are overshadowing a mounting share of state and government resources. The United States expends over two and a half trillion on health care annually. This is approximately $8,000 per individual (Green, 2009). This number accounts for roughly 16 percent of the entire economy and is on the rise quickly. If we do not take action immediately, by 2018, almost twenty percent of the economy, more than four trillion dollars will be used upon health care.
. In estimating its budgetary effects, the regulatory body considers any projected savings that can outcome from better utilization of such preventive care as well as the estimated expenditure of that extra care. Although there is a variety of types of preventive care methods, each has a different consequence on budgetary costs. The facts imply that for the majority of preventive services, expanded usage leads to greater and not minimal, medical expenses. For instance, many onlookers point to past historical cases whereby a straightforward medical examination, if given early, can divulge a condition that can be treated at a tiny proportion of the cost of treating the disease after it has developed. In such cases, prevention advances the health of the individual and community at large and shrinks spendingfor that person.
To ward off a case of severe illness, it is usually essential to present preventive care to the majority of patients, who would not have experienced that illness. When the charge of a particular preventive service, is small; costs can mount up rapidly as soon as a big number of patients are taken care of preventively of individuals who would make greater utilization of preventive care. As a consequence, preventive care can have the major payback comparative to costs when it is aimed at individuals most prone to experience a specific medical issue; though, such targeting can be complex as preventive services are generally offered to patients with the possibility of contracting a given illness but have not yet exhibited any signs. Researchers who have studied the results of preventive care normally find that the extra expenses of extensive utilization of preventive services are inclined to surpass the money saved from prevented illness or diseases. An editorial published in the past year in the Times offers a fine synopsis of the existing proof on how preventive care impacts costs.
The researchers concluded that these measures would considerably decrease the expected number of heart attacks and strokes that took place but would also augment the total expenditure on health care as the decisive funds would balance out only about ten percent of the total costs of the preventive services, as the standard. Of specific note, the study wanted to capture the costs and payback of offering preventive care over a thirty-year timeline.
Certainly, just because preventive measures increase the total expenses, this does not imply that it is a dire investment. Specialists have concluded that a big portion of preventive care adds to household expenditure but should be seen and taken as cost-effective, in the long run denoting that it offers clinical benefits that substantiate the supplementary costs: Roughly sixty percent of the preventive services inspected in the evaluation cited above have supplementary costs that many individuals in the health sector believe to be practical in comparison to their clinical benefits. This is also considered by providing that preventive care would signify a net utilization of assets more than as a basis of backing for other activities. (About twenty percent of the medical services evaluations have costs that are big in comparison to their reimbursement, and a small portion messes up health care while totaling to costs.
Challenges to Prevention and Intervention Initiatives
Changing Demography
Challenges associated with demography are continually being faced by health care organizations and governments in the provision of health care to the masses. A growing population in the United States has to be taken care of by sufficiently extensive medical cover and this comes at a cost to both the government and the medical organizations as facilities are stretched to the limit. This fact is made more difficult by the increase in the population of women, as it is assumed by researchers and scholars that there will be a higher need for medical facilities to cater more to the women population. A good example of how the population has changed over the years is how in the early 1900s there were about ninety-six men for every one hundred women. In 1979, there was a dramatic drop as we now witnessed forty-five men for every one hundred women and it is estimated that there will be about thirty-nine men for every one hundred women above eigheighty-fivers old in the second part of this decade. Change in demography is also being witnessed through the rising number of the immigrant population from all over the world. With low monthly incomes, immigrant families are placing a strain on the delivery of health care as some minority populations are more prone to certain diseases. It is estimated that a higher concentration of Hispanic women are prone to cervical cancer and this fact has manifested itself in the Texas state where over half of all cervical cancer cases are reported from Hispanic ladies
Fraud
Health care fraud is an international crisis, widespread in federal and state as well as private insurance programs. It appears that fraud is increasing and the criminal elements who commit it have become more structured and complicated. Unfortunately, very few people know precisely how the costs of health care fraud and how it impacts our budget. We can only guess it to be in the range of billions of dollars annually. Insurance companies and the government are working hand in hand to coordinate anti-fraud initiatives across the country (Jonas, 2008). It is through the establishment of new affiliations with the private sector that the government can be able to address the issue of insurance fraud. The effects of fraud can impact improper expenditures. Fraud also results in uneconomical payments in health care programs. Payments paid to officials and programs for redundant medical services, for declarations made with inadequate records, for disqualified patients, and to ineligible contributors. These are just some of the patterns of inappropriate spending that waste taxpayer cash and push up the cost of health care.
Whether you boast of employer-sponsored health coverage or you pay for your policy, health care fraud inescapably interprets into increased premiums and extra costs to the members, as well as minimized remunerations or coverage (Gerard, 2009). For owners or managers of either private or government organizations, fraud raises the cost of offering insurance benefits to employees and which in turn, raises the cost of conducting business functions. For many individuals, the amplified cost resulting from fraud could signify the difference between offering health insurance for their employees or not.
Nonetheless, financial losses initiated by health care fraud represent only a fraction of the chronicle. This type of fraud comprises of a human face as individual sufferers of health care fraud are easy to stumble on. These are individuals who are oppressed and exposed to pointless or dangerous medical procedures. Or whose medical accounts are infiltrated or whose rightful insurance information is applied to present fallacious claims.
Description of Health Care Fraud
The bulk of health care fraud is perpetrated by a small minority of deceitful providers. The actions of these fraudulent few eventually serve to smear the reputation of possibly the mainly trusted and valued members of our communityour physicians.
Regrettably, the trade of these evildoers is to gain the assurance that has been delegated to them to gain and commit unending fraud on a very large scale (Bucy, 2007). And in envisaging fraud methods, these individuals have extra time and access to being innovative as they have contact to a vast array of variables from which to imagine all nature of the unlawful activity:
- The total populace of our countrys patients;
- The complete collection of possible medical conditions and handling methods on which to support bogus claims; and
- The capacity to distribute fake billings amongst various insurers at the same time, plus public programs such as Medicare and Medicaid, escalating fraud earnings while reducing their odds of being spotted by any sole insurer.
The most common types of fraud committed by dishonest providers include:
- Billing for products and services that have never been delivered. This is done by both, use of actual patient records, occasionally gained through identity theft, to formulate complete claims or by filling claims with costs for actions or services that have never taken place.
- Billing for more costly services or measures than what was offered or executed, commonly known as upcoding , this is erroneously charging for treatment at a higher fee than was offered ( often requiring the additional price increase of the patients analysis code to a more grave circumstance consistent with the sham process code).
- Performing medically redundant services only for the reason of creating insurance expenditure observed frequently in nerve-conduction and further diagnostic-testing formats.
- Misrepresenting a patients findings to substantiate tests, surgeries, or other procedures that are not medically needed.
- Charging a patient extra than the co-pay sum for prepaid services
- Accommodating rewards for patient recommendations.
- Ignoring patient co-pays or deductibles and overcharging the insurance provider or benefit plan.
Mitigation of Health Care Fraud
An example of fraud is being mitigated is through Mergers and acquisitions between HMOs and other care providers has been on the rise in the past few years and this can be shown through the numerous consolidations and exchange of assets between the organizations. There are different criteria of mergers and acquisitions but the major categories are ones between practitioners organizations, who are mostly primary caregivers. Health care providers, (outpatient facilities, nursing homes) and payers (Browley, 2007). This affords the merged organization the ability to expand their reach towards other people and also increase and develop the range of services offered to their clients. Both the organization that has been acquired and the acquirer profit from the initiatives. The situation has been fuelled by a condition where health care funds have been diminishing rapidly for some years now and this has necessitated the organizations to come up with better strategies in acquiring managed care monies. Apart from economies of scale a merged organization also benefits from better negotiations with insurance firms and employers.
Fraud has driven up health care costs, and in some cases, a patients life to some extent has been put in danger. Turning around the issue will entail a long-term, sustainable solution. It will require us to consider the right approach to be successful in turning over deception and abuse. It is only through coordinated efforts between the public and private sector and the general population to come together to eliminate this vice. The population should be more vigilant about their medical records. Any cases of fraud should be reported and protection given to the whistleblowers as the fraudsters have the capability of doing anything to protect their illegal acts.
Following the introduction of the National Summit on Health Care Fraud, The fraud Summit assisted in publicizing the governments advancement to improve federal inter-agency collaboration to target fraud and categorize methods to strengthen these efforts. This comprises enhanced and faster methods of exploring claims data to distinguish fraud, impeach perpetrators and use the current civil and administrative remedy to improve and reimburse back funds money to the Medicare Trust Fund, Medicaid programs, and other sufferers. The Summit has also encouraged an innovative structure of strategic ideologies to progress a CMS program integrity operation.
Case Study
Insurance Reform
Health insurance reform was enacted in March 2010. The new regulations do little to ease the fundamental pressures of rising costs but do considerably widen health insurance coverage among the population. Consequently, associations in organizations should make better financial plans for their employees healthcare benefits and remunerations (Rushefsky, 2010).
The act will expand the health insurance coverage of all citizens of America. There is a command that all persons, with definite exceptions, either be insured by employer-sponsored group plans or acquire self coverage. The command is a feeble one, though, because the fine imposed is less than the fee of acquiring an insurance cover. On the employers side, officially there is no directive to offer employees any insurance coverage.
A Delicate Grandfather Clause
Whilst the new Act grandfathers in health policies in subsistence as of the March Twenty Third which is the enactment date, the grandfather position is delicate and a little deceptive. Its deceptive because the law necessitates several reforms to grandfathered policies. It is fragile as any reforms done to a health plan, except totaling or deducting employees and individuals obligated by the law, fails grandfathered positions. In other words, if a manager or owner adjusts a grandfathered policy to limit premium rise by augmenting copays or deductiblesa characteristic policy-renewal incidencegrandfathered status is misplaced (Henderson, 2010).
Almost certainly, payments issued on grandfathered plans are set to be amplified, not just owing to normal costing pressures; this is also for the reason that regulations entail definite amendments to all policies and plans. This also includes grandfathered plans. Those changes, collectively with probable effectual dates, contain the following:
- Broadening insurance coverage to members kids up to the age of twenty-six (effectual for plan years commencing on or after September Twenty Third, 2010);
- Eliminating lifetime restrictions on vital health benefits (September Twenty Third, 2010), which are to be described in policies;
- Allocating minimum yearly restrictions via guidelines (September Twenty Third, 2010) and later barring yearly restrictions (January First, 2014) on vital health benefits ;
- No rejection of insurance coverage for preexisting provisions for children under nineteen (September Twenty Third, 2010) and afterward none for any person (January 1, 2014);
- Apart from fraud and material falsifications, no rescission of insurance coverage (September Twenty Third, 2010);
- The waiting stage to go into plans cannot go beyond ninety days (January 1, 2014);
- For owners or managers with more than two hundred employees, automatic enrollment into the plans (almost immediately as the regulations are issued).
Requirements for New Plans
These changes will have an effect on charges, and to control costs, owners and managers have to make the necessary proposal changes to numerous, save for most, plans. When this occurs, the grandfathered position will be misplaced (Northrop, 2008). New plans have to include several extra features, together with:
- No cost distributioncopays or deductiblesfor preventive care, which is to be described in policies (September Twenty Third, 2010);
- Nondiscrimination regulations (September Twenty Third, 2010);
- Assured accessibility and renewability (January First, 2014);
- Restrictions on distributing costs with members. Part of the prerequisite is that members may not be obligated to shell out additional cash than the health savings account caps, currently $5,950 for one person and $11,900 for family insurance coverage (January 1, 2014).
Many reforms will occur almost immediately as plan renewals come to effect in the final quarter of this year. Under these situations, association managers should arrange to get together with their health insurance brokers in advance and more regularly than usual to get a deep perceptive of the impact on their budgets.
That credit, which totals to twenty-five percent for tax-exempt institutions (Thirty-five percent after 2013) of the sum utilized by the owner or manager of the business on health insurance, is relevant for those with less than Twenty-five FTEs who have a standard reimbursement of fewer than Fifty thousand dollars. The highest credit affects the organizations with ten or fewer employees and an average reimbursement of twenty-five thousand dollars, and phases out fully at the twenty-five employees, fifty thousand average reimbursement stages.
Conclusion
The cost of health care is bound to come down when these initiatives are carried out by a collaboration of honest health providers and the government. This will ensure that the bulk of the population is covered sufficiently and that benefits and compensation are rewarded to those who need them. Many patients will continue to suffer if the fraudsters continue to perpetrate their trade of falsifying records which jeopardizes the health and safety of many individuals.
Prevention initiatives also lead to further reduction of costs on family and government budgets. Savings will be achieved in the long run if these initiatives are implemented as soon as possible. Many persons are bound to benefit also health-wise as diseases can be detected earlier and medications administered in time.
References
Behan, P. (2006). Solving the health care problem: how other nations succeeded and why the United States has not. California: SUNY Press.
Browley, R. (2009). Healthcare fraud: auditing and detection guide. London: John Wiley and Sons.
Bucy, H. (2007). Health Care Fraud. New York: CRC publishers.
Cameron, E. (2009). Essentials of health care finance. Perth: Jones & Bartlett Learning.
Gerard, P. (2009). National health insurance in the United States and Canada: race, territory, and the roots of difference. Vancouver: Georgetown Press.
Green, M. (2009). Health Care Prevention. London: Oxford Publishers.
Henderson, W. (2010). Health Economics & Policy. Washington: Cengage Learning.
Jonas, S. (2008). Health care Delivery in the United States. Washington: Springer Publishing Company.
Northrop, E. (2008). Health Insurance Resources: A Guide for People with Chronic Disease and Disability. New York: Demos Medical Publishing.
Rushefsky, M. (2010). Health care politics and policy in America. New York: M.E. Sharpe.
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