Hello, and welcome to this presentation on health services management. My name is Mirza Ramin. I'm the chief safety officer at Organon and the president of the ACPM. I come to you with a little bit of love from the city of brotherly love, which is Philadelphia and I reside just outside Philadelphia. We'll be talking today about the purpose of healthcare. The universal goal of the healthcare system is to ensure adequate access, quality care, and at a reasonable price. According to the Institute of Medicine, healthcare should be safe, effective, patient-centered, timely, efficient, and equitable. Ideally, it's a systems approach that will help to ensure that this occurs. So what do we mean when we talk about a system? Again, according to the IOM, it's a set of connected or interdependent parts or agents, doctors, patients, etc., who are bound by a common purpose and acting on their knowledge. There are several advantages to systems. You've got a broader range of clinical and managerial skills. You have enhanced efficiency. There's enhanced cost control and access. Increased influence with respect to capital and human resources. More political and marketing clout. And systems allow you to better develop solutions to problems related to information systems, materials management, plant and equipment maintenance. The American healthcare system is one where it's been described in several ways. It's the population served by the systems, the insured and the uninsured, the payers, private insurance and public insurance, and healthcare delivery components, including hospitals, clinics, etc. The more cynical, of course, describe the American healthcare system as not being a system, but a patchwork that comes together to deliver healthcare in the United States. So it's a combination of resources. You've got facilities, personnel, and technology. And these are organized by various financing mechanisms to produce services for consumers. So let's talk about, in the U.S. healthcare system, the role of the government and of service delivery. The federal government has a unique role in healthcare service. It serves in many capacities as a regulator, as a purchaser of healthcare services, as a healthcare provider, as a sponsor of research, and as an educator or trainer of healthcare professionals. It's a complicated role that the government plays. The organizational structure of the Department of Health and Human Services alone is complex, as indicated by the next few slides, and it changes constantly. So here you see the secretary and deputy secretary and the chief of staff in one group. And throughout the next three slides, you've got the office of the secretary, you've got various groups that we're familiar with, including specifically here you'll see AHRQ, you've got CDC, FDA, HRSA. These are all various organizations within HHS with whom preventive medicines work. And obviously, you've got multiple others that we are familiar with, including the National Institutes of Health. So when we talk about program management versus service delivery, some of these departments are involved in only financing or managing programs that deliver healthcare services, whereas other departments actually deliver healthcare services. You also have various departments that are involved in the direct delivery of personal and community health service. And not just at HHS, you look to the Department of Veterans Affairs, Department of Defense, Department of Agriculture, and the Department of Labor. So all of these come together to regulate or to promote healthcare in the United States. So when we talk about direct service providers, what are we referring to? Well, you can have ownership of healthcare institutions, like with the VA or the Department of Defense. You've got employment of members of the healthcare workforce, and the management and operation of a comprehensive healthcare delivery system. As a direct service provider, the government provides healthcare for veterans, military personnel and their families, Native Americans, and it serves as a model for healthcare organization and delivery throughout the country, and they may do this through funding and oversight. For example, the Department of Agriculture provides funding for the Women, Infants, and Children program through the Food and Nutrition Service. So it provides federal grants to states for supplemental foods, healthcare referrals, nutrition education, and for low-income pregnant, breastfeeding, or non-breastfeeding postpartum women, and to infants and children up to age five, who are at risk for nutrition problems. So for those who are at risk for nutritional deficiencies, or who are really at risk for not getting sufficient food. So as a regulator, the FDA is one of those groups, but the government sets the standards, not just FDA, it could be CDC, it's OSHA. It set the standards for minimally acceptable performance. It establishes minimal qualifications for licensure. For example, who gets a DEA license, and it does this for both healthcare organizations and practitioners. And these are some of the agencies that play a significant role as regulatory bodies. I just mentioned the Food and Drug Administration, or FDA. We also have HRSA, Health Resources and Services Administration, which has the Bureau of Health Professions under it and the Physician Data Bank inside of that. So when we talk about FDA, what are we talking about? This is an agency that regulates about 25% of commerce in the United States. It protects the public from food, drug, and medical devices and product hazards. So when you have listeria outbreaks or E. coli outbreaks, it's the FDA's responsibility to make sure that those things don't happen. They also regulate prescription and over-the-counter drugs, biological products, human blood, and their components. It ensures drug potency, effectiveness, and safety before approval. And after approval, it focuses on ensuring safety and quality once a drug is on the market. They also regulate radiological equipment in terms of efficacy, controls of radiation, exposure, and so on. HRSA does a variety of things that are either conducted or supported by their group. The government responsibilities are mandated under federal-wide assurance and the Office of Human Research and Protections. The agency has its own policy, the Program Protection of Human Subjects Participating in Research Programs. And these protections apply to studies conducted internally by HHS staff, and it also applies to external studies conducted by grantees and contractors of HHS. As a purchaser, the federal government is the largest purchaser of healthcare services. It sets up various payment policies that either can stifle or encourage innovations, depending on what it is looking to do as it seeks to improve healthcare quality or to enhance patient safety. And these payment policies, while not mandatory, can influence access to services and delivery of services even by non-federal companies. So whether it's UnitedHealthcare or other managed care organizations, they will look to the policies from the federal government, CMS in particular, to decide what they may pay and how much they may pay. Now, as a research sponsor, federal government seeks to create more efficient delivery of high-quality, cost-effective healthcare services through health services research, and it seeks to improve the health of the nation through funding and promoting high-quality basic biomedical and clinical research. So this is what NIH does. This is what AHRQ does. And so you have these multibillion-dollar funding agencies that do this type of research, and a lot of it is basic research, but we see more and more of it related to health services research to try to get the best outcomes possible. So as a research sponsor, AHRQ is charged with improving the quality of healthcare in the United States, and the agency conducts research intramurally, and it funds extramural research. As a research sponsor, you've got a lot of funding of biomedical and clinical research seeking to improve the length and quality alike. And you can see that there are multiple agencies that are involved in this, starting with the NIH, of course, the nation's premier research institute. And it goes through the National Science Foundation, our favorite in preventive medicine, public health, the Centers for Disease Control and Prevention, and then you have other agencies that also sponsor research. The government also has a role in education and training. The government funds education and training of healthcare providers through grants from HRSA, and it seeks to help train physicians, nurses, physicians assistants, dentists, etc. And this is funding, there's also funding for graduate medical education. So when you talk about residency training in medicine, all of this or most of this is funded through the HRSA, and fellowship training is also paid for to enhance the skills of primary care faculty or community preceptors in academic medical centers. Let's talk a little bit now about healthcare delivery. There are various models that are used in terms of medical management, business management and utilization management. So when we talk about the models, we're talking about service care. So primary care refers to the activities looking at prevention and treatment of the most commonly seen medical problems, usually in an outpatient setting. So you've got primary care physicians or practitioners in the United States, who are responsible for about two to 3000 patients, and they look at the overall care. Primary care is sometimes described as, you know, first contact continuous coordinated care. Secondary care refers to treatment of disorders requiring subspecialist opinions or hospitalization. So the family doc sees patients, but then she or he may refer a patient to be seen by a particular subspecialist, whether it's a cardiologist or a gastroenterologist, and that's what we mean by secondary care. Tertiary care refers to the referral, usually to one of a super standalone specialized hospital or specialty department in a multi specialty hospital. And this is where you have a baby that's delivered at the local community hospital, and then that baby needs to be transferred to the neonatal intensive care unit. And that's what we're talking about when we talk about tertiary care, or similarly, trauma surgery or neurosurgery. These are things that take place in the tertiary care centers. And the way in which this care is financed can be different depending on how you get your insurance. So there's prepaid health care, you've got various managed care organizations, health maintenance organizations, which is a type of managed care. Fee-for-service, which is decreasing significantly, although there has been a little bit of a boom in terms of concierge care. And then public insurance, you've got Medicare, Medicaid, care that's provided by the Indian Health Service Workers' Comp, etc. So when we talk about prepaid health plans, we're talking about administrative goals. So they have two things. There's a standardized process that you try to harmonize how the care is delivered, looking to reduce unnecessary expenses, and trying to improve the overall quality of care. The financial risks are shifted to physicians and sometimes patients, where the patients may need to pay increasing amounts depending on the type of care they need, the medications they need, and so on. And there's a strong incentive to keep patients at the lowest or least costly level of care. And then you've got to see physicians and network to maintain those lowest costs. So when we talk about managed care, we're talking of a system of administrative controls, where you manage health care costs, improve health care quality, and increase access to health care. You're looking to apply this to an enrolled set of customers. So if you're a UnitedHealthcare person, you go to their physicians. If you're Cigna, or if you're Kaiser, you go to their sets of institutions. There is an emphasis on wellness and preventive care, because you want to prevent diseases that you can. And also for managed care organizations, there's what we'll call an enlightened self-interest. They don't want people to get sick on their watch. So they try to keep people as healthy as possible. And then there's an attempt to reduce costs by sometimes having a primary care physician serve as a gatekeeper. So you can't see a subspecialist until you go through the primary care doctor. Not everybody does this, but these are some of the types of things that have been tried to decrease the costs of managed care organizations. So there are three broadly defined categories. There's health maintenance organizations, there's preferred provider organizations, this is sort of a modified fee-for-service, and then there's point-of-service or various plans like that. So HMOs or health maintenance organizations, they offer a standardized benefit package to prepaid members. They may require members to use specific physicians, usually requires use of a primary care physician to coordinate care and handle referrals. You can have a point-of-service where it's open, you can go outside, or you can have closed where there's no point-of-service option. The point-of-service is an indemnity type option where you sort of pay money, you get care, but you can choose to go where you want, more or less. And so you've got primary care physicians typically refer patients to other providers within a network. Patients may refer themselves outside of the network and get a portion of their costs covered. And if the physician refers the patient out of the network, the plan still pays most of the costs. But if a patient self-refers, then they may have to pay a coinsurance fee. Fee-for-service is more or less disappearing, except as I said for the concierge, that's basically self-pay. And then preferred provider organizations where you have physicians, hospitals, and other providers of care agreeing to accept lesser fees from the insurer, a discounting, because they're guaranteed a certain amount of patients who will see them. So here's the first question. When we think of managed care organizations, what are you thinking about? What's true here? Okay, next slide. So managed care organizations are systems of administrative controls aimed at managing the cost of healthcare, access to healthcare, and the quality of healthcare in defined populations. So this is what we mean by managed care. Okay, let's talk a little bit about utilization management. So utilization management is a strategy that's really a cost containment strategy, limits healthcare expenditures by limiting reimbursement. These were parts of the early attempts to control costs based on utilization review pursuant to the Social Security Amendments of 1972. So what you have are some of these organizations that were set up, professional standards review organizations or professional review organizations, which still exist. Disease management is another way that there's a comprehensive effort to help clinicians plan and deliver evidence-based care and to help patients play an active and informed role in caring for themselves. So many of these disease management programs are embedded in the primary care delivery system, and you've got these care managers that are hired specifically to augment services for patients whose conditions are poorly controlled for usual care. So let's talk a little bit about finance and economics. We'll talk about healthcare economics in the next lecture, and we'll go through that in that 90-minute presentation. But for now, let's take a look at primary payers and insurer systems. You've got the government, you've got indemnity or private insurance companies, you've got managed care, and you've got individuals who self-pay. So where does the money come from? All of the money for healthcare comes from the people through a variety of mechanisms, taxes for publicly funded programs, insurance fees, co-payments, and deductibles. So you're paying for your healthcare, it just matters where you may work, and that's a historical accident from Kaiser going all the way back to the building of the Grand Coulee Dam. And when they were limited in giving increases in pay, they started to provide healthcare services, and that's really how this got started in the United States. But it's tied to being employed, which is a challenge, especially when you have a high unemployment. Managed care companies are primarily funded through employer and employee payments. It is a joint payment. Now most Americans are covered by insurance, and most of this is provided by some type of managed care package of benefits, and usually from their employer. Employers provide healthcare dollars for their employees through the paying of an indemnity insurance. There's some that provide insurance for about 70% of Americans, and you've got Blue Cross Blue Shield is not-for-profit, Aetna, and others are for-profit. The government finances healthcare by three primary mechanisms. It pays for its own programs to provide care, so let's say the Indian Health Service. It pays for the provision of care by non-government providers, and then through indirect payment with grants to states. Now these are all supported by tax revenues, so all of the government healthcare programs are primarily financed through tax dollars, and these funds need to be reauthorized through the national budget process on an annual basis. This is why you see constantly, if you pay attention to what goes on in Washington, D.C., in the House and in the Senate with the president, there's this ongoing discussion annually about how much should be spent on the various healthcare programs, such as Medicare, Medicaid, CHIP, etc. And when we talk about how healthcare is funded for the socioeconomically disadvantaged or challenged, the government provides various aid to families, and whether it's women and children, and this is at the federal, state, and local levels, you've got funding that is authorized through legislation coming from the Social Security Act, and these are usually entitlement programs. So when we talk about entitlement programs, what are we talking about? So this is assistance to families that's given in partnership with community health centers, primary care providers who accept public insurance reimbursement. And much of the program money is to aid families. They're funded at the national level, sometimes in conjunction with the states. And these social welfare programs are made up of entitlements, and entitlements are government programs with certain eligibility requirements that are set by Congress. So the eligibility requirements for entitlements may include age, income, retirement, disability, and unemployment, and those who meet the requirements are thus entitled to these benefits. So let's say for Medicare, you've got to be over 65 to get it. So you've got to be 65 or you may be disabled. You may have a certain low level of income that makes you eligible for Medicaid. So these are some of the types of things that come into play as people become eligible for entitlement programs. And these programs are generally two types. Social insurance is not means-tested. You're able to claim it based on aid, so Medicare, Social Security. You've had some previous employment, whether in a government or military, you can go to the VA. And then you have a loss of employment, you get unemployment benefits. So that's social insurance, not means-tested. And then public assistance is means-tested, meaning the benefits accrue to people who are low-income people. So whether it's Medicaid food stamps, temporary assistance, those are the kinds of things that are required to have a means-tested. So when we talk about Medicare, Medicaid, and the various amendments to the Social Security Act, this goes all the way back to 1935 when President Franklin Delano Roosevelt. So the Social Security Act resulted as a response to the Great Depression, which began in 1929. It provides several programs to help assist families. It created entitlement programs to aid families. And what you have is Congress reauthorizing the funding of these programs annually in the federal budget. Two of importance to us are Social Security amendments of 1965, which dramatically expanded the role of the federal government in health care when it created Medicare and Medicaid. The purpose of Medicare was to fund health care for all persons over 65, and the purpose of Medicaid was to fund health care for all persons receiving cash assistance. So it's now temporary assistance to needy families. And what you had with this massive expansion with Medicare and Medicaid was that in conjunction with Social Security, for one of the first times in the history of the United States, the elderly didn't really have to worry quite as much about being or living in poverty. Without Medicare and Social Security, many, if not most, of the elderly in this country would be living in abject poverty. Then there were changes to the system. You had the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 under President Clinton, and that ended welfare as it had been known for the previous 60 years, so from 35 to 96. It ended entitlement program, AFDC, and it replaced it with state programs called Temporary Assistance to Needy Children. You then have, following that, the Balanced Budget Act of 1997, and again, these are cost-saving mechanisms, where Medicare was significantly changed. You created Medicare C, C is for choice, it's a managed care option that still exists. It created greater restrictions on hospitals and physician payments, and it was aimed at decreasing physician payments for services through Medicare by over $100 billion over five years. It also created the state's Children's Health Insurance Program, or SCHIP, which greatly expanded access to health care for children. You see here a number of these entitlement programs under the Social Security Act, some of which you may be familiar with, the Unemployment Compensation Title III, you've got the Child Welfare Services Title IV, Title V is Maternal and Child Health Services, these are block grants. So as you work in public health at any of the various state or local health departments, you'll be familiar with these. And then you've got a variety of other entitlement programs that exist. And then coming to the ones that we're probably more familiar with, Title 18, Title 19, Title 21, which are respectively Medicare, Medicaid, and the SCHIP program. So what are we talking about when we talk about Medicare? Well, it's the nation's health insurance program and has about 65 million insured beneficiaries, provides insurance to people 65 and older, those who are disabled of any age who receive Social Security, and those who have permanent kidney failure, end stage renal disease. And the cost of Medicare in 2022 was almost $990 billion with a B dollars. You can see the growth here in terms of number of people covered, and those who are enrolled via age, and those who are enrolled via disability. So you've got from 1966, 65, 66, when it started all the way to 2022, you can see significant increases. And the portion that has increased, you can see it growing there is not only disability, but the number of actual people. And this will increase quite significantly over the next 15 to 20 years as the baby boomers, one of the largest generations, will be signing up for Medicare. So this is something that we expect will only go one way, and that's up. And then in terms of the cost, you can see cost from 70 to 22 has increased quite rapidly, particularly since 2010, when you may, you know, if you had an increase from the payment for drugs, you've got large increases all the way up. So Medicare has four parts. Part A is for hospital payments. Part B is for medical and practitioner expenses. Part C, I talked about, you've got managed care. And Part D is the prescription drug benefit plan. We had the Medicare Modernization Act of 2003 under President Bush II, and that went into effect on January 1, 2006. So Medicare Part A is hospital inpatient services. That's worthwhile knowing, because hospitals versus providers, it's A versus B. You also get skilled nursing facilities under certain conditions may apply, home health care services. Now, this is funded through payments made to the Social Security Trust Fund by employed workers. So this is not something that people have to continually pay, and you've already paid in for this. Part B, however, is fee-for-service. You've got partial payment for physician services. You've got hospital outpatient services, medical equipment and supplies, and this requires a premium to be paid for by the beneficiary on a monthly basis they elect to participate. Pretty much everybody who's going to get Medicare is going to elect to participate here. And so there is a monthly premium. Part C, as we talked about, is managed care. And the reason why people go into managed care, yes, it may restrict them a bit. But what it does simultaneously may give them additional coverage for things like dental care and so on that they would be getting as part of their managed care. And then Part D is simply D for drugs. It's a prescription benefit plan for Medicare recipients. Now, Medicare is Title 19, and this funds health care services for low-income and the needy. It's funded through general tax revenues of the state and the federal government. It's the largest health insurance program in terms of number of people. It's jointly funded by federal and states. If you know one Medicaid program, you know that Medicaid program, because New York is different than California, is different than Texas, is different than Florida. So every state chooses to fund what it may. Some may be more generous and some less. So it all depends on revenue and politics and policy that is in that state. And the services are delivered at the community level by all types of health care providers in all types of settings. So that's, as I said, once you know one Medicaid program, you know one Medicaid program. The funding priorities will follow some broad national guidelines, yet each state can establish its own eligibility standards. It determines the type, the amount, the duration of and scope of the services. It sets the rate of payment for the services, and it administers its own program. So it varies significantly from state to state, is what you should remember. So Medicaid does cover more than 87 million people, and that's as of April of this year. It covers children the age of blind, disabled, and those eligible to receive federally assisted income maintenance payments. So it's really a program set up to help the poor. The medical expenses, though, are less than Medicare, about $140 billion, because remember, many of the people who are in this may be younger, you know, children. And so as a result, they're not quite as ill. And so you have less utilization of resources. But it does cover long-term nursing home care, and that's usually only after a spend-down. Patients have spent all their resources except a few thousand dollars, and they may keep their home if a spouse is living in it. So when we talk about Medicare and Medicaid programs, who administers them? So Medicare and Medicaid are administered by the Centers for Medicare and Medicaid Services within the Department of Health and Human Services. And S-CHIP is the next one we'll talk about, the next program we'll talk about. This was established by the Balanced Budget Act of 1997 to provide health insurance to low-income children. It covers on all states and D.C., and they have established programs in all states. They get matching funds from the federal government. The states have greater flexibility in using S-CHIP funds, and these funds are often used to expand existing Medicaid-supported health care programs. And they can include prescription drugs, vision, hearing, mental health, in addition to general health services. And then we come to the Patient Protection and Affordable Care Act, PPACA, of 2010, or the Affordable Care Act, or Obamacare. And this was the latest expansion of medical care, health care, in the United States. While approved in 2010, in 2012, it was heard by the Supreme Court, which upheld its constitutionality on the narrow subgrounds of the ACA's individual mandate as an exercise of Congress's taxing power. At the same time, however, the court held that states cannot be forced to participate in the ACA's Medicaid expansion under penalty of losing their current Medicaid funding. And so this is an act that has gone to the Supreme Court multiple times. And most recently, it's been challenged in the courts in Texas in a case called Braidwood Management v. DeSera, the Secretary for Health and Human Services, that contested zero-cost sharing guarantee for preventive services. Obviously, the ACPM has a vested interest in this. And then in the follow-up, subsequently, in March of 2023, Justice O'Connor subsequently ruled or blocked enforcement of the zero cost that's been recommended by the U.S. Preventive Services Task Force since 2010, including things like tobacco cessation, screenings for anxiety, hypertension, etc. And now this is being appealed, and it may yet go back to the Supreme Court. So the Affordable Care Act has transformed the American health care system by significantly expanding coverage, lowering costs, and improving access to health care. However, despite its positive impacts, the ACA is the most challenged law in American history as it relates to health care. And its provisions have been argued before the U.S. Supreme Court three times in 13 years. And with this recent case in Texas, it may be a fourth time. So what does PPACA do or the Affordable Care Act? Well, with respect to coverage, it ends pre-existing condition exclusions for children. So health care plans can no longer limit or deny benefits to children under 19 due to a pre-existing condition. It keeps young adults covered, as if you're under 26, you may be eligible to be covered under your parent's health plan up to that point. It ends arbitrary withdrawals of insurance coverage. So insurers can no longer cancel your coverage just because you've made an honest mistake. And it guarantees your right to appeal. You now have the right to ask your plan to reconsider its denial of payment. That may not be successful, but you're guaranteed a right of appeal. It's been said, and there was an article back in the New England Journal of Medicine back in the 90s, where they talked about managed care, managing by inconvenience. And a lot of this is what the ACA was trying to address as it dealt with coverage. In terms of costs, it ends lifetime limits on coverage. Lifetime limits and most benefits are banned by all the new health insurance plans. There's a review of premium increases. Insurance companies must now publicly justify any unreasonable rate hikes. And this is done through the review from state health departments. And it tries to help you get the most of your premium dollars. So the premium dollars, the majority, must be spent primarily on health care, not on administrative costs. And I think up to 80% must be dedicated to the delivery of health care. And then speaking of health care, it covers preventive care at no cost to patients. You may be eligible for recommended preventive health services without a copayment. And you protect your choice of doctors, choosing primary care doctors you want from your plans network, while also removing insurance company barriers to emergency services. You can seek emergency care at a hospital outside of your health plan network and be covered. You may have to notify the company, but you can get that health care coverage. So this is about the financing of health care by the government in America. Who handles it? Well, this is done primarily through the Department of Health and Human Services. The two primary pairs for government-sponsored healthcare in the United States are the Centers for Medicare and Medicaid Services and Health Resources and Services Administration. Let's talk a little bit about financial management. When you're spending money, you're looking for an outcome and you're looking for the best outcome. Here you see a graph charting health expenditures across and against life expectancy. This is from New York Times from May 4th of 21. And so as you look at this, these data from the World Bank from 2000 to 27 for a variety of countries. And you see on the left, India, Russia, Ukraine, and so on, moving all the way across the United States. So you can see we clearly spend the most money. But you also can clearly see we don't have the best life expectancy. And post-COVID, as you know, this actually went down. And so if you're looking to finance a healthcare system, you want to spend your money and get the best outcome. And this is but one measure. There can be other measures you can look at. Infant mortality, maternal mortality, and so on. But looking simply at the top 10 countries and healthcare expenditures per capita and then life expectancy, you can see we spend the most money. Second behind us is Switzerland by about $1,300 less. But they have six years greater life expectancy at birth. And you can see every other country has at least a four to six year increase in life expectancy at birth than we do in India and in the United States, even though we pay the most money. And as a percentage of GDP, we pay the largest amount as a percentage of GDP. And you've got to remember, this is the largest percentage of the largest GDP in the world. So it really is a significant increase. So when you talk about healthcare expenditures in the United States, it grew 2.7% in 2021. And this growth was slower than the increase of 10.3% in 2020, which occurred largely in response to the COVID-19 pandemic. In 2021, you'll see different numbers because different sets of data are used. So that was World Bank and New York Times. This is now CMS data. In 2021, healthcare spending reached $4.3 trillion, or almost $13,000 per person. And in 2021, health spending accounted for 18.3% of the nation's budget GDP, even as GDP increased 10.7% in 2021, contributing to a drop in the share of the economy devoted to health from 19.7% in 2020 to 18.3. But it's still higher than it was in 2019. So it continues to grow. And we've got to figure out ways in which we're going to manage this. And it just continues to grow. As I've said, you've seen the numbers from 1966 to now. The number of dollars and the percent of GDP continue to grow. If you look back from expenditures, and this goes all the way back to 2000, we're spending about $4,500 per person. We move forward to 2020, you see it's $11,700, and it's gone up now to $12,900. So there's a massive increase, you know, two and a half times increase in healthcare expenditures over the last 20 years. Is this sustainable? You've got to think about this when you run a large healthcare organization. Is this sustainable for the country? And then you want to figure out, you know, in terms of the spending, where did it go? So that $4.3 trillion, who gets the money? So you've got hospital care, getting the largest amount. Physician services, second largest. And then you go around other than other personal care, which is an amalgamation of many things. But hospital and physician services are two of the biggest that you see. And then clinical services and prescription drugs, not necessarily in that order, are also big ones. And then where do the monies come from? So private insurance pays a lot. Medicare, Medicaid, out-of-pocket are the big ones. So this is where the money comes from. And as you can see, from the 1960s onward, we've had this constant decrease in the amount of money being spent. Not the number of people who are covered, but the amount of money being spent. Because remember, Medicare, you've got an older, sicker population. So you're seeing a crossing now of the public-private spending. And public spending is now going to increase to the point where it will take on and become the majority. Or it already is moving in that area. And payment to providers, you've got rising costs that resulted in many cost containment strategies over the years. So if you're seeing a doctor, any health care provider, you've got increasing costs. And typically, to try to control health care costs, you have either regulations put in place, you've got laws put in place, or you've got payment strategies. Unfortunately, these have been largely ineffective in controlling health care costs, as you've seen. They continue to go up. Other types of cost containment strategies include prospective payments. So DRGs and RBRVS, the diagnostic-related groups for hospitals, and resource-based relative value scale. And managed care has expanded from the 1970s to now. You've got also co-payments. So that's a little bit of a payment that may dissuade you from going to see the doctor or the subspecialist. You've got deductibles. You're going to spend a certain amount of money before you can get covered. And there's been a shift in the United States from costly hospital care to less costly outpatient care. And we'll continue to see more of this happening with advances in technology and the ability to take care of people safely in these outpatient settings. So the cost containment strategies have been varied. You want to increase resources, decrease demand utilization, increase efficiency, and increase quality and decrease errors. Most recently, signed into law by President Biden in August of 22, you had the Inflation Reduction Act. And that includes several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government. The CBO, Congressional Budget Office, estimates that the drug pricing provisions in the law will reduce the federal deficit by $237 billion over 10 years. So this is clearly about cost control, cost containment, and trying to get the best bang for your buck. If you're the government and you're paying and you're buying the most services, how do you get coverage that will maximally benefit you as a country, but basically the people who are in Medicare? So when we talk about organized structure and development, you've got various bureaucracy characteristics, strategic planning, program assessment, quality and patient safety, and organizational development and effectiveness. So let's talk about bureaucracy characteristics at the federal, state, and local levels. So the federal government, we talked about the budgetary process. It starts in Congress. It ultimately is responsible for the allocation of health care dollars, the provision of direct health care services, funding numerous other programs, funding education, subject to approval by the executive branch, subject to legal review by the judicial branch. So you've got legislative, executive, and judicial branches coming together, but usually the judicial branch is not going to get involved. So it's really legislation passed by the House and the Senate of Congress, and that goes to the president, and he signs it. In terms of state governments, these are primarily involved with programs aimed at determining the distribution of federally allocated funds, the promulgation of laws and regulations governing health services organizations, and the funding and management of the joint federal, state Medicaid programs. In terms of local governments, these are primarily involved with the delivery of health care services through local public health departments, the LHDs, and they provide only the core functions of public health and the central public health services, and we'll talk about assurance, assessment, assurance, and policy development. Thinking about planning, strategic planning and policy development, how do we go about doing this? Well, there are basic principles. It includes planning for maintaining and improving health at the population level, so we're looking at a population level. It includes planning for health services and their delivery, and it occurs in two levels. There's a macro and the micro. The macro is at the level of the health system of a region or one or more states or the nation. The micro is an institutional planning and what's going on in an institution or at a very detailed level in the clinics. When we talk about planning, you're looking at the finding health problem, searching for an unmet need, and then looking at the resources that are available or potentially available to deal with that unmet need. Establishing priority goals while matching what you need to the resources that you have, developing an action plan to achieve those goals, and relate results to goals through evaluation, assessing what you've done. The assumptions of underlying health planning are such that resources are scarce. We must get optimum value for the allocated resources we have for health. And healthcare services have a social purpose and should be valued more than activities aimed at economic gain or social ends unrelated to health. So an effective healthcare system must be responsive to consumer needs and requires being accountable to society. Health planning requires attention to clear identified goals and objectives. Your planning success is linked to your stated goals and objectives. So when you look at, for example, Healthy People 2030, it's got very specific goals and objectives that the country's trying to achieve. So these goals and objectives must be clear to all parties, they must be understood and agreed upon by all parties, and they must be measurable. If you don't inspect what you expect, you won't get what you want, but to inspect it, you've got to measure what you want. There's a book called Measure What Matters, gets to this same point. You've got to measure various things that you want to get to see how or if you're even making progress. So the goals are these broad, generally long range statements of ideal desired outcomes. Objectives refer to specific, attainable, measurable outcome that can be accomplished in a specific time. So you talk about SMART goals, specific, measurable, attainable, realistic, and in a time bound manner. So these are SMART goals that are referred to. Evaluation of these goals and objectives should be continuous. You're getting feedback and data analysis, leading to changes in the goals and objectives. And measurement of the outcomes are an important part of the evaluation that's being conducted. So the planning process requires program evaluation of the existing programs. You evaluate the need for a new program, and then you create a continuous feedback loop, collecting data as a baseline measure for use in assessing program quality, or even the need for a program. Assessing the degree to which goals and objectives of existing programs are accomplished, or assess the need for a new program by utilizing collected data. And then change or implement the program, and then reassess. So it's a continuous feedback loop of trying to improve on what you've done. Look at two national health planning activities. One is Hilberton, and the other is Healthy People 2030. So the Hospital Survey and Construction Act, the Hilberton Act of 1946, was the first federal attempt to enact global health planning legislation. Its aim was to improve the hospital bed ratio in rural areas and to increase the numbers of physicians in those areas. It's basically a bricks and mortar program. It required states to designate a single agency to plan and implement hospital construction. There's limited outcome because end results were state-based and focused on beds rather than services. And there's no integration between this and other legislatively mandated programs. So the idea was, we're going to build hospitals. We're going to try to have an agency that reviews how we do this hospital building. But there wasn't a lot of integration, and the outcomes were probably less than optimal. When we talk about Healthy People 2030, what we're talking about is a program that has been built on multiple iterations going back to 1979. So Healthy People 2030 is based on the accomplishments of the five previous Healthy People initiatives, started by Dr. Michael McGinnis in the Department of Health and Human Services in the Office of Disease Prevention and Health Promotion, or ODPHP. So in 1979, you had the Surgeon General's Report on Healthy People, the Surgeon General's Report on Health Promotion and Disease Prevention. So that was from 1980 to 1990. You had Healthy People 1990, then you had 2000, 2010, 2030, 2020, to now that you have the sixth iteration, which is Healthy People 2030. And what Healthy People 2030 is, is you're looking at population data. It's got new data tools that make it easy to view the data that are relevant to your work. And I'll come back to this. I just wanted to show you it as one page. It lists four various things which we'll talk about. But basically, Healthy People is looking to assist people who work in the public health arena. How can you use Healthy People 2030 in your work? So it looks at national priorities, the objectives, how they're tracked over the decade, and you can get all of this at the health.gov slash healthy people slash tool type in action. So this gets you, for those of you working in public health, you know, take a look at this. It'll help you to get your work done well, as it provides a plethora of data and information within this document. Good. Let's talk about quality and patient safety. So when we talk about quality management, there's the need for the delivery of quality health care services, and that's driven by many factors. The industry-wide, you've got quality efforts, focus, and continuous quality improvement, CQI, and total quality management, TQM. And the concepts and tools of these two things, total quality management and continuous quality improvement, were pioneered not in health care, not in the health care setting, but in other manufacturing settings, such as car manufacturing, by Joseph Wan and J. Edwards Deming, and they were shown to be applicable to the health care industry as a way of improving care processes while reducing costs. So CQI and TQM, it's a concept of the organization setting expectations that it can and will achieve, but that there will be set at a higher level each year. So you're looking for continuous improvement, set the bar a little bit higher, and you're looking to get better with each passing year. There are four attributes. Quality includes meeting customer expectations. It's customer-driven. Monitoring and evaluating quality is retrospective and prospective. Quality should be organization-wide, including involving institutional employees at all levels, and quality and quality improvement focuses on both process and outcomes using measurable indicators. So this is something that you'll hear more about, this process and outcome structure is something that we had, let's say, with Hillburton. You're building hospitals, then you've got to look at the process and the outcomes, and the fourth part is meeting customer expectations. Now, that's a new part that's come into play within the last 20 years. So what are key concepts in defining quality of health care? Well, you've got appropriate care, expected health care benefits exceed negative consequences. You can talk about efficiency, maximizing the quality of comparable unit of health care delivered for a given unit of health resources. So how costly is it to deliver a particular cure? Economy, total level of expenditure for health care given realistic performance of quality and efficiency, and a realistic assessment of available resources. If you can't look to build a hospital in every town, you've got to look at what makes sense in a region or in a state, especially if it may be a sparsely populated state like Montana, right? So you've got to look at the resources available and what makes sense. And then the performance, how a plan or provider is functioning with regard to specific standards, benchmarks, or measures. And the measures are often indicators of quality, value, or both. So there are a whole variety of sources of quality measures. You can look at administrative data, billing records, routine departmental records and data, lab quality control and statistics, patient schedules, charge vouchers, and then looking at medical records. It's become so much easier since these data were put on various electronic health records where you can get patient descriptions, orders, medical notes, et cetera. And this trend towards automation makes it easier to get to and deal with data that you need to look at. When you talk about operationalizing the quality of care, Elvira Donabedian proposed that quality can be measured by three categories that I talked about earlier. Structure, process, and outcome. Worthwhile, if you haven't had a read of his article from 1988, that would be worthwhile taking a read of it. It's a short article. So what do we mean by structural measures? These are the attributes of the settings in which care occurs. It provides the basis for most current regulations. It's often required by government programs through accreditation, licensure, certification requirements, and it ensures a minimal level of quality. Process refers to what's actually being done in giving and receiving care. So if the structure is your clinic, if the structure is your hospital, process relates to the activities. So patient activities in seeking care, patient activities in carrying out the recommended care, provider or physician activities in making a diagnosis and recommending or implementing a treatment. So that's what's actually taking place. And there can be a variety of process measures. You want to look and quantify the delivery of procedures or services. Are they correlated with the desired outcomes? Data may be needed to develop process measures, and they're typically obtained from medical records, claims data, patient surveys. So medical records, as I said, is much easier now. You can do a few keystrokes and get into people's data as long as you're obviously allowed to do so. Process measures should be easily measured and documented. Scientifically non-controversial and specific for the event being measured. So with this, you want to make sure that you're measuring things that matter and as it relates to the process. Now the outcome is assessing the quality of the final product. So did someone, because of something you did not have a myocardial infarction or not have a stroke. So these are the outcome measures that you're interested in. You're interested in capturing the effect of an intervention on health status, control of a chronic condition, specific clinical finding, and now the patient's perceptions of their care. So when you look at outcome measures, you're looking at subjective assessment of conditions. So this becomes harder, right? Because what you may be interested in, I may not think is important and vice versa. So we're looking at subjective assessment of conditions in terms of cure, improvement rate, stability, and whether it's terminal. And we can try to make it objective. Remember, we can make the scale more or less subjective, but it's individual. And so in the end, it's all subjective. So scales of physiologic function and ability to perform daily activities. And so these are the kinds of things that come into play when you're doing an outcome measure. What are some of the, what's the difference between process and outcome measure? Okay. So process measure would include such things as quality of physician charting and lab tests ordered. And outcome would be reflected in the status of the patient upon discharge. So did a patient have a myocardial infarction? You get that from the lab charting and the lab tests. And then how are they doing? Are they able to walk? Are they invalid? Are they in a wheelchair? What was the outcome? So those are the two things that matter and how you measure them. So when we talk about operationalizing quality of care, start with structure. It looks at the appropriate services that are being provided whether in a hospital or an outpatient setting, start with the structure. Then the process is to what degree are these services available? So what gets done when the patient goes into that setting? And then the outcome are the indicators of actual change in health status and functioning. And then the fourth piece is the customer experience and acceptability. The degree to which patients are satisfied with their care. And this can include anything from parking in your institution, seeing the front desk who may or may not be rude to them, the waiting times. This all gets to the consumer experience. It's not just about them seeing the healthcare professional and saying, oh yeah, Dr. So-and-so was great, I'd come back again. It's that full spectrum. And that's something that the various healthcare organizations are focusing more on. Lead government agencies for improving quality care, CMS and HRQ. A lot of the work they do is to ensure the quality of care. And they've been working in a scope of work projects with their quality improvement organizations. They're trying to get the various places that deliver care to Medicare patients to make sure that patients get the flu shot or get the COVID shot or get screened for diabetes or hypertension or lung cancer as appropriate. So this gets to the quality of care. And then AHRQ provides evidence-based guidelines for clinical prevention, diagnosis, and treatment. And you can see the URLs are listed there. There are also a number of private organizations that are involved with the efforts to improve the quality of healthcare. And there are other quality management trends that you will see. What you have is more and more evidence-based medicine practices. You also have what we will see, practice guidelines, and whether people are fearful of these practice guidelines or in a pejorative way refer to them as cookbook medicine, more and more the use of evidence-based medicine and practice guidelines are coming into play along with clinical paths. Pay for performance. If you do a great job, you will be rewarded with a bonus in a quarterly basis or so on. And disease management, which we've talked about, how can we make sure that people are getting followed up appropriately? You have a team and it's basically the team that works to make sure that the disease is managed appropriately. Okay. What's the IOM's definition of quality? So the Institute of Medicine's definition of quality is the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. Let's touch briefly now on some legal and ethical considerations. Ethics and legislation and regulatory compliance. So when we talk about ethics, it's the study of standards of conduct and moral judgment. And when applied to professions, ethics is a system or principles or a code for that profession. The philosophical basis for ethics is that ethical theories are based on four principles, respect for a person's autonomy, beneficence, non-maleficence, and justice. So these are the four ethical principles that we talk about when we're thinking about healthcare ethics. It's useful in defining relationships amongst patients, managers, and organizations. It may carry different weights and precedents depending on the issue. However, it's important to note that justice requires ethical principles are applied consistently when similar problems are encountered. So for example, how you treat patients who may have different sexual orientation, or where do you put an incinerator for trash? In which community do you put? And so you're getting to this point of the ethical principles need to be applied consistently. Now there's a relationship between the law and ethics. Laws attempt to reflect the society's view of justice and fairness. Laws typically represent the minimal performance standards expected of members of society, you know, do not kill. But all things legal may not be ethical, worthwhile paying attention to. All things legal may not be ethical. And you can see this over and over in the business world and even in the medical world, that people do things that may be legal, but they may not be ethical. So giving, you know, giving patients as we're all familiar with the Tuskegee experiment, it was legal, it was run by the US Public Health Service, but it wasn't ethical. And you see this some more and more around the world, particularly in places that may not have the protections that we have in this country and the types of studies that people may be recruited into. The National Practitioner Data Bank was intended to improve the quality of healthcare. Its purpose was to facilitate a comprehensive review of professional credentials, because what was happening in this country was bad actors, bad nurses, doctors, et cetera, were skipping out from state to state when they were fired. And so the purpose was to facilitate a comprehensive review of professional credentials, establish in the Healthcare Quality Improvement Act of 1986, and it's administered by the Bureau of Health Professions, HRSA and HHS. So the National Practitioner Data Bank is, it's a national organization, it's a national organization that's been around C and D, intended to improve the quality of health care. And there's also administrative Bureau of Health Professionals which is within HRSA, which is within the Department of Health and Human Services. Okay, private regulation of health care providers. You've got the health systems organizations, hospitals, managed care organizations, others. You've got insurance companies. You've got joint commission, which is comprised of these groups. You've got medical societies. You've got the AOA, AMA, et cetera. All of these work together to help regulate health care in the United States. And we've got government regulation of health care providers. We talked about Medicare, Medicaid, talked about prospective payment, joint commission certification, which we'll talk more about in one of the later lectures, looks at the various health care institutions and says, hey, you know, are you doing what you're supposed to be doing? And then are you doing it in the right way? And are you making sure that the safety of patients who come into your hospital are being protected? When you administer blood, you have two ways of checking to make sure that the patient to whom you think you're giving blood is actually that patient. So these are the kinds of things you see with the regulation of health care. It used to be something called Certificate of Need where you don't have everybody having a CAT scan in their neighborhood, but now that is less of a concern is capitalism at its best. People can go buy a CAT scan, set it up, and go ahead and use it. And then you've got this network of federal, state, and local health policy and laws that work together to help regulate how care is delivered in the United States. So that has been a quick review of what we were gonna talk about, health services management. We'll subsequently follow up with a presentation on health economics, and then we'll have a larger description of some of the details as it relates to health services management in the United States. Thank you.

health services management

American healthcare system

quality care

accessibility

cost efficiency

systems approach

federal government roles

Medicare Medicaid ACA

cost containment

managed care

equitable service delivery