Health InsuranceTraditional Fee-For-Service CoverageTraditional Fee-For-Service Coverage - continuedPolicy ProvisionsBlue Cross-Blue Shield PlansHealth Maintenance Organizations (HMOs)Preferred Provider Organizations (PPOs)Point of Service Plans (POS)Health Care Coverage - 1Health Care Coverage - 2Current Problem AreasHealth Care Costs in USManaged Care ProblemsPhysician Compensation and ControlHealth InsuranceTraditional Fee-For-Service CoverageBlue Cross-Blue Shield PlansHealth Maintenance OrganizationsPreferred Provider OrganizationsPoint of Service PlansCurrent Health Care ConcernsTraditional Fee-For-Service CoverageBenefitsIndemnityServiceValued policyBasic benefitsHospitalSurgicalMedical expensesTraditional Fee-For-Service Coverage - continuedMajor medical insuranceMaximum limitsInternal limitsBenefit periodCoinsuranceStop loss provisionsLimited contractsAccident of specified illnessPolicy ProvisionsCoordination of benefitsContinuation provisionsCOBRA 1985Blue Cross-Blue Shield PlansNot-for-profit organizationsHospitals and physicians formed these insurance plansTax favored organizationsReimburse hospitals at a discounted rateCompetition for traditional health insurersHealth Maintenance Organizations (HMOs)Prepaid health care coverageIncentives of HMOs versus Fee-for-service plansAdvantages/disadvantages of HMOsChoice of DoctorCoverage for Checkups and Preventative CareOut-of-Area ServiceFiling ClaimsPreferred Provider Organizations (PPOs)Coverage provider negotiates discounts with doctors and hospitalsInsured can choose PPO for better coverageIntroduces competition into health carePoint of Service Plans (POS)Hybrid arrangement combining a traditional fee-for-service plan with an HMO and/or a PPOWhenever health care is required, participant can choose the managed care option or an alternative health care providerHigher coverage for managed careReduced coverage for out-of-network treatmentFastest growing health care plan for employeesHealth Care Coverage - 1What health care coverage do you have?A) Own coverage through employerB) Coverage through a parent’s policyC) Coverage through the U of I Student PlanD) Coverage through parent’s and U of I PlanE) No coverage/I don’t knowHealth Care Coverage - 2What type of health care coverage do you have?A) Traditional fee-for-service or BCBSB) HMOC) PPOD) POSE) I don’t knowCurrent Problem AreasHealth care costsManaged care problemsPhysician compensation and controlHealth Care Costs in US•Total health care spending $1.9 trillion (2004)–Up 7.9%, 3 times rate of inflation–$6,280 per person–16% of GDP•Higher than any other industrialized nation•Other nations provide universal coverage•46 million uninsured (at least part of year)•Fastest rising cost for employers –11% annual increase 2001-2005–$10,880 for family, $4,024 for individual (2005)Managed Care Problems•Getting treatment for serious ailment–Primary care provider may be reluctant to refer patient to a specialist–Plan may refuse to cover expensive treatment–No coverage for out-of-network care•Under fee-for-service, physicians were paid only if they provided a service–Problem – over treatment•Under managed care, physicians have an incentive to keep treatment costs down–Problem – under treatment–Potential conflict of interest for physiciansPhysician Compensation and Control•Starting compensation levels (2006)–General practitioners: $140,000 - 150,000–Specialists (Radiologists, Cardiologists, Orthopedic Surgeons): $260,000 - 400,000–Financial incentive for physician to become a specialist•Conflicts between physician and managed care plans–Delays in approving care–Denial of coverage•Paperwork requirements•Physician satisfaction levels
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