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UNITED STATES HEALTH CARE:

UNDERSTANDING COMPLEXITY
 How has the United States Health Care Model evolved?

 What are the respective roles of Nursing Medicine and the


Insurance Industry in the evolution of Health Care; how has
history and legislation shaped these roles?

 How does this impact how and who delivers care today?

 What additional factors created and influence the current


complexity and fragmentation in health care?

 How can management of transitions address the needs of


patients?
EVOLUTION OF THE ROLES OF HEALTH
CARE PROVIDERS: PHYSICIANS
Physicians structured the organization of the medical
profession from the earliest days of the US until the
last decades.
Initially:
 MD’s were largely uneducated and unregulated until Mid-1800’s
 Medical schools owned by faculty who ran schools for profit – many
graduates could barely write and read
 No organized or defined curriculum
 No oversight or standards guiding practice or care delivery
 Payment made directly to the physician
 American Medical Association (AMA) founded in 1847 to provide basic
standards for practice and ethics – first medical organization
 AMA provided organizing structure which continues currently; became a
powerful force shaping health care organization, and limiting the scope of
social programs such as Social Security, MediCare/MediCaid, National health
care initiatives
 Legislative action confirming the MD role as lead in the delivery of health
care: State Practice Acts
 Structured in an independent, autonomous, fee for service model – until
relatively recent times
CONTINUING HISTORY…
Slow progress and poor acceptance of scientific
discoveries and education in US
 Continued distrust of “new” theories such as antisepsis,
handwashing
 Historically slow acceptance of evidence, best practices or
standards of care
 First scientific medical school established in 1893: Johns
Hopkins
 Between 1850 and 1900
 State licensing and regulatory standards imposed state by
state
 MD control of childbirth and surgery, prescribing
 State and Federal Medical Practice acts – placing nursing
as a dependent function
REFLECTIONS
 Physician practice has valued autonomy and independence of
practice. How has the historical development of MD practice
shaped their position as the “leader” in the health care team, and
the RN as a dependent role?

 Is there a cultural value of “independence” and autonomy in


general in the United States?

 What cultural values in the United States shape how we perceive


the MD role and it’s importance in health care structure?

 How do these values impact the implementation of evidence based


guidelines and best practices?
EVOLUTION OF THE ROLES OF
HEALTH CARE PROVIDERS: NURSING
 Colonial Times to Mid 19th century
 Community networks of Lay Nurse providers –
Grannies, neighbors – no organized nursing
profession
 Religious organizations provided major structure
and training – Sisters of Charity; Catholic and
Protestant orders
 Women from wealthy and educated backgrounds
major change agents
 Dorothea Dix – care of the mentally ill
 Clara Barton – battlefield and trauma care

 Florence Nightingale – scientific nursing

 Mother Seaton – hospital care


EVOLUTION OF NURSING ROLE
 Professionalnursing considered unsuitable
profession for “nice” women well into the 20th
century:
 Care for wealthy most often provided by MD’s
 Care for indigent, poor or disadvantaged often
provided by Lay or Religious nurses
 Basic nursing care a “housewife” competency – not
a scientific discipline
 Early cookbooks included home remedies

 Nurses provided service considered undesirable by


MD’s such as anaesthesia in early surgery until it
became profitable – later a point of conflict that
continues to today
 First scientific based nursing school established at
Johns Hopkins 1893 – parallel to MD’s
EVOLUTION OF THE NURSING ROLE
 Characterized by reduction and restriction in scope of practice,
legislative restrictions driven by the AMA and subsequent state
nursing and MD practice acts
 Nursing focus continued on underserved and disadvantaged
populations
 Little opportunity for financial reimbursement making it less
desirable to physicians
 Efforts by nursing to create population health programs or direct
nursing reimbursement limited by State Practice Acts and AMA
 Early Nursing Case Management in 1925: Mary Breckenridge
founds Frontier Nurses; provided maternal/child, primary health
and dental care. Improved maternal/child outcomes with Frontier
RN’s
 New York proposed women and children’s services for primary
care services by nursing opposed by the AMA (Lillian Wald)
 Efforts by RN’s to develop an independent practice structure
restricted by legislation
 RN’s relegated to service of “undesirable” populations
 http://www.frontiernursing.org/History/HowFNSbegan.sht
m
EVOLUTION OF THE ROLES OF
HEALTH CARE PROVIDERS: THE
HOSPITAL
 Hospitals from Colonial times to Mid-19th century for very
wealthy or for indigent

 Most hospitals founded and operated by religious orders

 Birth and death usually in the home

 Payment out of pocket for services until the mid 20th century

 Little to no regulation or oversight for standards of care

 Increased use of hospital care following Civil War with advent of


anaesthesia and surgical interventions – still no antisepsis
HOSPITAL AND MEDICAL CARE
DEVELOPMENT
 Early 20th century:WWI, Great Depression and New Deal
 Discoveries in medical and nursing care stemming from WWI, 1918
Flu Pandemic and organization of Medical care increased demand for
hospital construction
 Slow but steady rise of hospital care particularly in urban areas–
more “modern”
 Towne-Sheppard act provided for graduate medical education
(GME) and hospital construction
 Hill-Burton legislation in 1940’s and 50’s provided for further
funding after WWII
 The U.S. Government has been a driver in shaping health care delivery
through both hospital construction and education of physicians, limited
education support for nursing
 Transition of care into the hospital/medical setting due to increased
education and availability of physicians
 Increased hospital construction and advances in modern care:
antibiotics, surgery, blood products
 Increasing availability of medical and hospital care, payment
sources still cash or “out of pocket” payments
 Payment resources needed to support expanding use of hospital and
medical care
POLITICAL, LEGISLATIVE AND SOCIAL
FORCES
 Early 20th century
 Development of State and Federal regulation
and oversight of health care
 “ Muckraking” journalism – Upton Sinclair
 Deaths from patent medicine and quack cures revealed
 Public outcry and demand for safety in food, drugs and
medical care
 FDA established with regulation of medications,
prescribing and dispensing, food and drug
manufacturing standards
 http://www.fda.gov/AboutFDA/WhatWeDo/History/Miles
tones/ucm128305.htm
 1950’s establishment of the initial Joint Commission on
Hospitals to survey and validate hospital standards and
quality
LEGISLATIVE TURNING POINT I: SOCIAL
SECURITY
 1935: Roosevelt Administration enacts
Social Security
 Following the great depression, seniors were living in
poverty, no longer able to work, due to age or illness or both
 Social Security provided a limited source of funds for
basic needs including medical care

 National Health System was originally a part of Social


Security
 Roosevelt and his administration had a National Health
System as a key element of the Social Security
Legislation
 Removed due to AMA opposition to “state” medicine and
threat to failure of Social Security bill
 FDR intended for national health to be enacted at a later
date
 http://www.u-s-history.com/pages/h1609.html
EVOLUTION OF THE INSURANCE
INDUSTRY: ESTABLISHING A PAYMENT AND
REVENUE SOURCE
 1938 Kaiser founded as 1st HMO – Grand Coolee Dam worker
coverage
 Blue Cross offers the first “hospital” private insurance plan
 Organized Labor battles AMA and government for national health
care
 Changes strategy and pressures steel and auto industries for
health care employee benefits after WWII

 1948 National Labor Relations Board (NLRB) rules health


insurance a “fringe benefit”
 Employer health benefits tax exempt – benefit to employers to
offer insurance
 Recruiting tool in post WWII Boom to attract workers
 Health insurance business now subsidized by American
industry
 This is the point at which our health care funding
became linked with employment
 Source: Enthoven and Fuchs, Health Affairs, 25, no. 6
(2006): 1538-1547
1950’S: DECADES OF INDUSTRY CHANGE
Rapid uptake of employer/employment based insurance

 Poor, disabled, unemployed and elderly left out –not covered by


employer insurance, however 60% of the US covered by Hospital
Insurance
 Peak of employer coverage in 2000: 67% covered by private health plans
 Increasing ability of average individual to pay for health care
through insurance
 No coverage for preventative care or maternity
 Sick care –not a well care – model developed in the United States
NATIONAL HEALTH EFFORTS CONTINUE:
LEGISLATIVE TURNING POINT II
 Truman Administration attempted to create National
Health Plan – abandoned for employment based
approach
 Eisenhower administration worked with labor to
promote health insurance – stopped demand for national
health insurance
 1965: Medicare and Medicaid enacted by LBJ – Great
Society Legislation
 Covered those not covered under employer based insurance –
seniors, children, unemployed, chronically ill
 Structured like Blue Cross/Blue Shield
 No cost controls of any type
 Initial opposition by AMA assuaged by lack of cost controls
 http://www.ssa.gov/history/corning.html
EFFORTS TO CONTROL COST AND UTILIZATION
AFTER 1964: DECADES OF CHALLENGE
Rapid cost escalation and care utilization
 New Medical Technologies
 Advance of Pharmaceuticals
 Increase in hospital construction, hospital beds
 Development due to funds available from Medicare and Medicaid for
care that did not exist in the same way prior to 1964
 Skilled Nursing
 Long Term Care (Medicaid only)
 Home Health
 Hospice
 Dialysis
 Rapidly increasing costs with few or no ability to control utilization
and billing by health care providers
 By 1972 National and State Legislators have growing awareness that
cost is outstripping revenues
RISING COSTS WITH INCREASING CONCERN:
ACTION NEEDED TO CONTROL COSTS

 1982 Federal commission convened to control Medicare Costs


 Development of the Diagnostic Related Group payment system
(DRG) and ICD coding to begin quantifying and controlling
costs
 Coding itself now a multi-million dollar industry

 1983: DRG’s enacted


 Prospective payment system
 Cost-shifting from Medicare to private health insurers
 Medicare no longer the cash-cow for health care payment
 Adoption of Prospective Payment Systems (PPS) and
development of managed care by private insurance as a
consequence
 Costs continue to rise despite efforts to implement controls
 http://en.wikipedia.org/wiki/Diagnosis-related_group
PERVERSE INCENTIVES DRIVING HIGH
HEALTH CARE COSTS: 1964 - ACA
Medicare initially had limited controls on what an MD can
charge, based on AMA lobbying efforts
No priority for wellness and prevention in Medicare, Medicaid or
private insurance
Physicians not able to bill for these services – no
reimbursement
Until 1998, no coverage for screening and preventative
services such as mammograms for most plans
Implementation of DRG’s and Coding Requirements resulted in:
Doing more/charging more
Coding higher level diagnoses and interventions result
in greater reimbursement- upcoding
Continued focus on “illness” care vs screening or prevention
Not always linked to best interest or medically necessary care of
the patient
DECADES OF CHANGE: 1983-2000
 Managed care begins

 Shift from “indemnity” system to “actuarial”


 Know these terms…

 Shift of high-use/high-cost patients to not-for-profit and public


systems
 Employers and insurers attempt to reduce their financial risk
 Shares of cost and co-pays rising for employees
 Required authorization for care and control of use by payors
 RN’s and Care Managers calling for pre authorization from insurance
companies as cost management process
 Denials of authorization requests and non-payment

 Mergers and elimination of small players


 Economy of scale through combining small hospitals into
hospital systems, mega-insurance companies
 Hospital and health plan failures – little guys close
 Market dominance by a few big players – in the Bay Area think
Sutter, Kaiser, Blue Cross, United Health
 Corporate structure beginning to dominate
DECADES OF CHANGE: 1983 – 2000
EFFORTS TO CONTROL ESCALATING COSTS
 Cost controls at all levels
 Very limited quality and outcomes efforts as a way to reduce
costs
 Shift of costs to employees
 Increased deductibles
 Increased copays
 Reduced benefits
 Reduced # of employers providing benefits
 Reduced hours for employees to avoid benefits
 Reduced or eliminated family coverage

 Shiftfrom family to individual coverage by


employers

 Increasinglycompetitive insurance contracts


and higher employer costs
THE QUEST FOR NATIONAL HEALTH CARE
SOLUTIONS
 Every President beginning with Theodore Roosevelt
has considered national health coverage legislation
 The 20th century efforts by FDR, Truman,
Eisenhower, Kennedy, Johnson, Nixon, Clinton were
impacted by
 AMA resistance
 Political scare campaigns
 Linkages to Communism and Socialism
 Economic silo protection
 The Affordable Care act was shaped to both increase
coverage and incentivize quality while decreasing
cost
 The future structure and provisions of the act are in
revision
THE AFFORDABLE CARE ACT: WHAT
DOES THE LAW MEAN TODAY?
 Reduced the number of uninsured Americans
from 44 Million to 9 Million. Now rising
 Required purchase of health insurance by
individuals – but penalties for non-coverage have
been eliminated
 Penalties often are less than the cost of the insurance so seen
as a reasonable option
 Subsidies and credits for low income individuals being
reduced or eliminated
 Reinsurance coverage for individuals age 55 – 64 who
are not Medicare eligible – covers an insurance “gap” –
very expensive for many policies.
 Basic benefit standards for all policies – but being
revised by Trump administration
 Individuals lost policies when law took effect: Policies did not
meet basic coverage standards: so called skinny plans
 Catastrophic coverage still in place
HEALTH CARE REFORM IMPLICATIONS:
WHAT DOES THE LAW MEAN?
 No exclusion for pre-existing conditions –
may be revised or eliminated in 2018
 Prior to ACA, coverage could be refused for pre-
existing conditions
 No lifetime limits in coverage
 Prior to the ACA, insurance covered only up to a
maximum amount, and then was cancelled
 Coverage extended under parental plans to
age 26
 Prior to the ACA, coverage stopped at 18 if not in
college
 No abortion coverage except for the life of the
mother and incest (Hyde amendment)
HEALTH CARE REFORM
IMPLICATIONS: WHAT DOES THE LAW
MEAN?
 Expanded MediCaid and CHIP (Children’s health insurance
program)
 Coverage for families beyond the poverty level
 Significant changes to Medicare – and more expected
 5 star quality rating requirement for full reimbursement to health
providers: must meet preventative health and screening targets
for things like mammograms
 Incentivizes prevention and quality
 Requires employers (>50 employees) to provide insurance
coverage.
 Ruled constitutional
 Financial penalties to businesses and individuals for failure to
purchase- may not be enforced currently
 Business tax credits
 Continues the linkage of employment to insurance
OTHER HEALTH CARE REFORM
PROVISIONS
 Established a national quality improvement strategy that
includes priorities to improve the delivery of health care
services, patient health outcomes, and population health.
 Efforts to create more “Value” in care rather than just control costs
 Not supported by the current Presidential administration

 Establishes the National Prevention, Health Promotion and


Public Health Council to coordinate federal prevention,
wellness, and public health activities.
 Develops a national strategy to improve the nation’s health.
 Not supported by the current Presidential administration

 http://healthreform.kff.org/

 http://www.kff.org/healthreform/upload/8061.pdf
CURRENT HEALTH SYSTEM: WHAT
TO UNDERSTAND
 Health care delivery system currently dominated
by large corporations
 Hospital systems predominantly not-for-profit
because of tax-exempt benefit which provides
economic support
 Primarily for-profit industries
 70% of nursing homes
 85% of Dialysis Centers
 80% of Managed Mental Health

 Pharmacy almost exclusively for-profit

 Hospital corporations purchasing or absorbing


physician groups, along with ancillary care services
(Lab, Radiology, SurgeryCenters)
 Market dominance in small markets with few providers
who own all services
ADDITIONAL SYSTEM CHALLENGES AFTER
THE ACA: WHAT ABOUT THE PATIENT?

 Insurance contracts require the use of network


providers
 Many regions have few insurers within their market
 Use of out-of-network providers, even unintended,
can result in huge bills
 “Narrow Networks” mean that providers can be
selected only from a very limited range. In some
areas, this can mean long waits or provider unable to
accept
 Financing and payment continues to be very complex
and difficult to resolve for almost all types of
insurance
 Roles for nursing and nursing care management to ensure
patients understand costs and choices
 Third party companies creating a market for insurance
IMPACT TO PHYSICIAN PRACTICES
 The era of physician solo practice has ended
 Physicians historically have been structured as independent
practitioners
 The shift in practice style, structure and processes has been
challenging to the health care culture
 Autonomy of practice itself as been a driver of cost
 Majority now in group practice
 Expense of solo practice unsustainable
 Low satisfaction and high stress among physicians

 Insurance contracts create specific performance measures


physicians must meet
 Demands of managed care contracts make team based care and care
management necessary
 Roles for RN care managers and care coordination to support
practice management
 Guidelines, standards and quality requirements driving slow
shift to value based rather than volume based
reimbursement
WHAT ARE THE IMPLICATIONS FOR
THE RN?
 Insurance itself and managed care in
particular provide ethical challenges for
nursing
 Who gets care and how much?
 Is insurance itself a form of rationing?
 Allocation of scarce resources or limited
benefits is a challenge
 Inherent conflict of interest between
individual, provider and payor
 Traditional role of nursing advocacy challenged by
organizational and social priorities
 Beneficence to the individual vs greater good
 Disparities in coverage and benefits can lead to
differing standards of care
NURSING CONSIDERATIONS
In the current environment:
 How can Nursing support the shift to high value
rather than high volume care?
 What is the role of nursing in screening and
prevention/health maintenancerather than
heroics or rescue health care?
 How does nursing best partner with physicians to
support the shift in practice and care delivery?
 Greater emphasis on efficiency and quality
requires skilled transitions management. Who is
responsible for identifying and managing
transitions?

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