TERNOPIL STATE MEDICAL UNIVERSITY

INSTITUTE OF NURSING

INTERNATIONAL NURSING SCHOOL

 

Economics of Health Care

Objectives of the practical:

● Define the concept of health care economics.

● Describe three sources of health care financing.

● Compare and contrast retrospective and prospective health care payment systems.

● Analyze the issues and trends influencing health care economics and community health services delivery.

● Explain the causes and effects of health care rationing.

● List the pros and cons of managed competition as opposed to a single-payer system.

● Explain the philosophical implications of health care financing patterns on community health nursing’s mission and values.

 

Nurses concerned with the delivery of needed community health services also must understand how those services are financed. In an era when health care resources are limited and provider organizations are competing for scarce dollars, it is essential for nurses to be knowledgeable about the issues related to health care financing and about ways to obtain funding to address identified health needs in the community. Behind the financing of health care lies the science of health care economics. The field of economics, as a whole, is a science that describes and analyzes the production, distribution, and consumption of goods and services. It also is concerned with a variety of related problems, such as finance, labor, and taxation. It studies and seeks to promote the best use of scarce resources for the greatest good of society.

The science of health care economics describes and analyzes the production, distribution, and consumption of health care goods and services to maximize the administration of scarce resources to benefit the most people. The goal of health economics— similar in some ways to that of public health—is to promote the greatest good for the greatest number using available resources and knowledge.

This chapter summarizes the changing picture of health care economics and its financial incentives and disincentives for enhancing the public’s health. More extensive treatment of these subjects is found in the Selected Readings section.

 

ECONOMIC THEORIES AND CONCEPTS

Health economics can be better understood by examining the two basic theories underlying the science of economics. The first is microeconomics, and the second is macroeconomics. In addition, concepts of health care payment are discussed.

Microeconomics

Microeconomic theory is concerned with supply and demand. Economists using microeconomic theory study the supply of goods and services as these relate to consumer income allocation and distribution. They further study how this allocation and distribution affects consumer demand for these goods and services. Supply and demand influence each other and, in turn, affect prices. An increase in or oversupply of certain products leads to less overall consumption (decreased demand) and lowered prices. The opposite also is true. Limited availability of desired products means that supply does not meet demand, and prices increase. Microeconomic theory is useful for understanding price determination, resource allocation, consumer income, and spending distribution at the level of individuals and organizations.

Macroeconomics

Macroeconomic theory is concerned with the broad variables that affect the status of the total economy. Economists using macroeconomics study factors influencing employment, income, prices, and economic growth rates. Their focus is on the larger view of economic stability and growth. Macroeconomic theory is useful for providing a global or aggregate perspective of the variables affecting the total economic picture.

The economics of health care encompasses both microeconomics and macroeconomics, examining an intricate and complex set of interacting variables. It is concerned with supply and demand: Is the supply of available resources sufficient to meet the demand for use by consumers? It examines costs and benefits, cost-effectiveness, and cost efficiency: Are the resources expended achieving the desired outcomes? It studies the allocation of scarce resources for health care: Where should resources, such as funding for health programs and services for at-risk populations, be applied when there are insufficient resources to address all of the needs? Health economics is a major field of study in and of itself. Health economists draw on economic theory to study and develop an understanding of the factors influencing the financing and delivery of health services. Macroeconomic theory has been useful in providing a large-scale perspective on health care financing that has resulted in various proposals for national health plans, health care rationing, competition, and managed care. These concepts are described later in the chapter. Microeconomic theory may prove more useful if health care competition increases, because the success of the supply-and-demand concept depends on a competitive market. The pros and cons of competition also are examined later in this chapter. Issues such as cost containment, competition between providers, accessibility of services, quality, and need for accountability continue to be targets of major concern in the 21st century.

Payment Concepts in Health Care

Reimbursement for health care services generally has been accomplished through one of two approaches: retrospective or prospective payment. Conceptually, these approaches are opposite each other. It is helpful to understand their differences and their meaning for the financing and delivery of health services, past and present.

Retrospective Payment

A traditional form of reimbursement for any kind of service, including health care, is retrospective payment, which means to reimburse for a service after it has been rendered. A fee may be established in advance. However, payment of that fee occurs after the fact, or retrospectively. This is known as the fee-for-service (FFS) approach. In health care, limited accountability in the use of retrospective payment has created several problems. With thirdparty payers serving as intermediaries, neither consumers nor providers of health services were accountable for containing costs. Patients and providers alike often insisted on expensive or unnecessary tests and treatments. Because reimbursement was made retrospectively by the insuring agency, there was no incentive to keep a lid on this spending.

Third-party reimbursement increased, along with rising physician fees, to create an inflationary spiral of escalating costs. Abuse of the FFS system made it more difficult to develop retrospective payment for other health care providers, including nurses. A further problem associated with the FFS concept was its tendency to encourage sickness care rather than wellness services. Physicians and other providers were rewarded financially for treating illness. There were few incentives for prevention or health promotion in an industry that reaped its revenues from keeping hospital beds full and caring for the sick and injured. Although retrospective payment worked well in other industries, from a cost containment as well as a public health perspective, it was problematic in health care.

Prospective Payment

Prospective reimbursement, although not a new concept, was implemented for inpatient Medicare services in 1984 in response to the health care system’s desperate need for cost containment. It has since influenced the Medicaid program as well as private health insurers. The prospective payment form of reimbursement has essentially eliminated the retrospective payment system (Longest, Rakich, & Darr, 2000). Prospective payment is a payment method based on rates derived from predictions of annual service costs that are set in advance of service delivery. Providers receive payment for services according to these fixed rates set in advance. Payments may be in the form of premiums paid before receipt of service or in response to fixed rate (not cost) charges. To correct unlimited reimbursement patterns and counteract disincentives to contain costs, prospective payment involves four classic steps (Dowling, 1979):

1. An external authority is empowered (by statute, market power, or voluntary compliance by providers) to set provider charges, third-party payment rates, or both.

2. Rates are set in advance of the prospective year during which they will apply and are considered fixed for the year (except for major, uncontrollable occurrences).

3. Patients, third-party payers, or both pay the prospective rates rather than the costs incurred by providers during the year (or charges adjusted to cover these costs).

4. Providers are at risk for losses or surpluses.

The concept of prepayment, or consumers paying in advance of health care, has existed for many years. As far back as 1933, prepaid medical groups were advocated to reduce costs and make services more accessible (Hyman, 1982). This pattern of prepayment for comprehensive services has since continued in a variety of forms. Examples of early  plans were the Health Insurance Program of Greater New York City and the Kaiser Plan. The success of these two plans helped to influence the growth of the health maintenance organization (HMO), a type of managed care discussed later in this chapter.

Prospective payment imposes constraints on spending and gives incentives for cutting costs. The Federal government therefore enacted a prospective payment plan (Social Security Amendments Act) in 1983. The plan, called diagnosis-related groups (DRGs), is a billing classification system based on 23 major diagnostic categories and 467 DRGs that provides fixed Medicare reimbursement to hospitals. This system was enacted to curb Medicare spending in hospitals and to extend the program’s solvency period. The regulatory approach of DRGs changed Medicare hospital reimbursement from a cost-based retrospective payment system, in which a hospital was paid its costs, to a fixed-price prospective payment system. It was designed to create incentives for hospitals to be efficient in the delivery of services.

 Indeed, the prospective payment system has reduced Medicare’s rate of increase in inpatient hospital spending and increased hospital productivity (Conger, 1999). It also has reduced hospital stays and unnecessary admissions and created a boom in home health care (D’Angelo & D’Angelo, 1999). A spinoff, however, was fierce competition among providers and mounting concern about quality of care—in hospitals, ambulatory settings, and home care.

The prospective payment concept also has proved useful from a public health perspective. Prepaid services create incentives for providers to keep their enrollees healthy, thus reducing provider costs. A potential, indirect benefit from fixed rates and reduced costs is that more of the health care dollar is available for spending on prevention programs. Further understanding of health economics and its impact on community health and community health nursing can be obtained by examining methods of health care financing, issues and trends influencing health care economics, and the effects of financing patterns on community health practice.

SOURCES OF HEALTH CARE FINANCING:

PUBLIC AND PRIVATE

Financing of health care significantly affects community health and community health nursing practice. It influences the type and quality of services offered as well as the ways in which those services are used. Sources of payment may be clustered into three categories: third-party payments, direct consumer payment, and private or philanthropic support.

Third-Party Payments

Third-party payments are monetary reimbursements made to providers of health care by someone other than the consumer who received the care. The organizations that administer these funds are called third-party payers because they are a third party, or external, to the consumer-provider relationship. Included in this category are four types of payment sources: private insurance companies, independent health plans, government health programs, and claims payment agents (Harrington & Estes, 2001).

Private Insurance Companies

Private insurance companies market and underwrite policies aimed at decreasing consumer risk of economic loss because of a need to use health services. No private insurer directly delivers health services, although some, such as John Hancock, have a history of subsidiary proprietary home health agencies. Private health insurers have been experiencing decelerating growth for more than a decade as the result of a shift by employees to lower-cost managed-care plans offered through the workplace. Even with this change, in bad economic times companies downsize and lay off workers and many people “feel they are only a pink slip away from being uninsured” (Brink, 2002, p. 63) (see What Do You Think? I). There are three types of private insurers. First are commercial stock companies that sell health insurance, usually as a sideline. They are private, stockholder-owned corporations that sell insurance nationally; examples are Aetna, Travelers, and Connecticut General. Mutual companies, a second type of insurer that operates in the national marketplace, are owned by their policyholders. Examples are Mutual of Omaha, Prudential, and Metropolitan Life. The third type, nonprofit insurance plans, include companies such as Blue Cross, Blue Shield, and Delta Dental. These operate under special state-enabling laws that give them an exclusive franchise to the whole state (or a part of it) and to a specific type of insurance. For example, Blue Cross, in most instances, sells only hospital coverage; Blue Shield, only medical insurance; and Delta Dental, only dental insurance. Because they are nonprofit, they are tax exempt and at the same time subject to tighter state regulation than the commercial health insurance companies are. Combined, the nonprofit and commercial carriers have sold most of the private health insurance in the United States recently (Lee & Estes, 2001).

Independent Health Plans

Independent or self-insured health plans underwrite the remaining private health insurance in the United States. These plans have been offered through several hundred smaller organizations, such as businesses, unions, consumer cooperatives, and medical groups. The HMOs and various companies’ self-insured plans also are included in this category. Usually they may sell only health insurance; in some cases, they also may provide health services. They focus on a localized population. As a group, they generate a large amount of premium revenues but still only a small percentage of the amount generated by the nonprofit and commercial health insurance companies. In the late 1980s, the United States had more than 1000 for-profit, commercial health insurers and 85 Blue Cross and Blue Shield plans. The managed care movement since has become one of the most common and rapidly expanding forms of health insurance, with many companies dropping private insurer choices. Between 1997 and 2002, 93% of Fortune 500 companies reduced the number of health plans they offered their workers, and none increased their options (Hellander, 2002).

Government Health Programs

Government health programs make up the largest source of third-party reimbursement in the United States. The government’s four major health insurance programs are Medicare, Medicaid, the Federal Employees Health Benefits Plan, and the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS). As a whole, government funding is responsible for a lower portion of health care financing in the United States than in other countries in the world. In 1999, 432 billion dollars was spent on Medicare and other social welfare health programs, which is less than 50% of the actual health care costs. In comparison, almost 100% of actual health care costs were funded by the government in Norway, more than 85% in the United Kingdom, and about 75% in Canada and Australia (U.S. Department of Commerce, 2001). Of the government’s health insurance programs, Medicare and Medicaid constitute the largest.

Medicare

Medicare, known as Title XVIII of the Social Security Act Amendments of 1965, has provided mandatory federal health insurance since July 1, 1966, for adults age 65 years and older who have paid into the Social Security system and for certain disabled persons. Medicare is the largest health insurer in the United States, covering about 16% of the population. Of the approximately 40 million beneficiaries, about 12% are younger than 65 years of age and permanently disabled or chronically ill with end-stage renal disease, and another 9% are 85 years of age and older (www.cms.gov, 2002). The Medicare population is projected to grow to 44.5 million by 2008 and to more than 63 million by 2027 (Figs. 7–1 and 7–2).

Medicare is administered by the Health Care Financing Administration (HCFA) of the U. S. Department of Health and Human Services. Part A of Medicare, the hospital insurance program, covers inpatient hospitals, limited-skilled nursing facilities, and home health and hospice services to participants eligible for Social Security. It is financed through trust funds derived from employment payroll taxes. Part B, the supplementary and voluntary medical insurance program, primarily covers physician services but also covers home health care for beneficiaries not covered under part A. It is funded through enrollee monthly premiums (about 25%) and a tax-supported federal subsidy (about 75%).

 Medicare was managed in the same manner for more than 30 years until August 1997, when President Clinton signed the Balanced Budget Act (Pub L No. 105–33). This act, which took effect in 1998, provided Medicare beneficiaries with markedly different options. In addition, the National Bipartisan Commission on the Future of Medicare was established by Congress in 1997 to consider options to preserve the fiscal integrity of the program while sustaining health coverage for an aging “baby boom” generation. One of the plans being considered by this committee is an increase in the eligibility age for Medicare, from 65 to 67 years, over a 24-year span that would coincide with the increasing age requirements for full Social Security benefits beginning to take effect. This could save $620 billion over 30 years and would affect the entire baby boom generation. Decisions on this plan have not been made. Financing Medicare benefits into the future while maintaining or improving coverage for elderly and disabled beneficiaries remains the major challenge facing the program (Firshein, 1999). Among the most significant alterations brought about by the Balanced Budget Act are those to the fast-growing managed-care side of Medicare, which in 2002 covered about 30% of enrollees. To control Medicare costs while expanding the range of available health care options, beneficiaries are offered a relativity new program called Medicare Plus Choice Plans. This program seeks to accelerate the migration of patients away from Medicare’s traditional and more expensive FFS program into various managed care options. Enrollees opting to remain in traditional Medicare will continue to be covered by the traditional FFS program, which gives patients unlimited choice of doctors, hospitals, and other providers. Those moving to the Medicare Plus Choice plans have a limited choice of providers but, in return, will be offered options such as joining coordinated care plans, including HMOs, preferred provider organizations (PPOs), provider-sponsored organizations, private FFS plans, and on a limited basis, medical savings account plans. With this new law, Medicare has changed from an FFS, when-you-are-sick program to a preventive and wellness program (U.S. Department of Health and Human Services, 2002).

Although Medicare attempts to meet a need among the elderly in the United States, it has significant gaps. The original Medicare program has high deductibles, no cap on out-of-pocket expenditures, and no outpatient prescription drug coverage. As a result, it covers less than half of total health spending by the elderly and is less generous than health plans typically offered by large employers. Medicare Plus Choice Plans, however, provide extra benefits such as coverage for prescription drugs and more preventive and wellness services (www.cms.gov, 2002). These plans are paid for out-of-pocket by the enrollee or are covered as part of prior employer retirement benefits (Table 7–1). With increased choices and options that provide more comprehensive coverage come higher costs for managed care organizations. Employer benefits and enrollee copay amounts alone do not cover the higher health care costs that older adults incur. As a result, many managed care organizations began dropping out of Medicare Plus Choice plans early in the 21st century. Those plans that remained committed to the Medicare Plus Choice Plan program increased enrollee copayments. In addition to these changes, Medicare cut payments to doctors by 5.4% in January 2002 and were expected to announce a further cut of 4.4% in January 2003 but it was overturned (ASTRO, 2004). If cuts continue in future years, will only further increase physician or managed care organization withdrawal from the Medicare Plus Choice Plan program. Medicare’s administrator described the likely effects: “You’ll have mad doctors, there will be access problems, and seniors will feel it” (Pear, 2002, p. A4) (see Voices from the Community). Medicare funding, drawn primarily from working people’s taxes to benefit the elderly, will need to find new revenue sources in the future. As the population of elderly in- creases, fewer workers will be available to support the program.

When Medicare began, there were five workers for each Medicare beneficiary. Projections for the year 2040 indicate that there will be fewer than 2 workers for each beneficiary.

Medicaid

Medicaid, known as Title XIX of the Social Security Act Amendments of 1965, provides medical assistance for children; for those who are aged, blind, or disabled; and for people who are eligible to receive federally assisted income maintence payments (www.cms.gov, 2002). It is jointly funded between federal and state governments to assist the states in the provision of adequate medical care to these eligible needy persons. The states have some discretion in determining which groups their Medicaid programs will cover and the financial criteria for Medicaid eligibility. To be eligible for federal funds, however, states are required to provide Medicaid coverage for most individuals who receive federally assisted income maintenance payments, as well as for related groups not receiving cash payments. The states determine the type, amount, duration, and scope of services. The following are examples of mandatory Medicaid eligibility groups:

• Recipients of federally assisted income maintence, including Supplemental Security Income recipients

• Infants born to Medicaid-eligible pregnant women

• Children younger than 6 years of age and pregnant women who meet the state’s assisted income maintence requirements or whose family income is at or below 133% of the federal poverty level

• Recipients of adoption assistance and foster care under title IV-E of the Social Security Act

• Certain Medicare beneficiaries (qualified disabled workers and certain poor Medicare recipients)

• Special protected groups who lose cash assistance because of the cash programs’ rules

Coverage includes preventive, acute, and long-term care services. Potential Medicaid recipients must apply for coverage and prove their eligibility in terms of category and limited income. In 2002, 36 million low-income Americans were enrolled in Medicaid (www.cms.gov, 2002). This is 5 million citizens lower than in the mid-1990s. Many Americans were affected by dramatic changes in the scope and limits of federally supported income maintence programs and no longer meet the financial requirements for the Medicaid program. As with Medicare, Medicaid programs moved to a managed care concept, following mandates within the Balanced Budget Act of 1997. The move has not been without its problems for those receiving Medicaid. Medicaid beneficiaries are economically disadvantaged, frequently reside in medically underserved areas, and often have more complex health and social needs than do Americans with higher incomes. Early evidence on the implementation of Medicaid managed care showed some improvement in access to a regular provider but more difficulties in obtaining care and dissatisfaction with care compared with those in Medicaid FFS. In recent years, many people who were never before eligible for Medicaid benefits have become eligible due to downward national economic trends, company downsizing, and corporate scandals. Subsequently, families have lost the health care benefits that were employer subsidized and now find themselves among those eligible for Medicaid managed care programs. Medicaid’s use of managed care has grown dramatically. The percentage of Medicaid recipients enrolled in a broad array of managed care arrangements increased from 10% in 1991 to 37% in 1996 and is projected to continue to increase. The future success of Medicaid managed care depends on the adequacy of the capitation rates (fixed amounts of money paid per person by the health plan to the provider for covered services) and the ability of state and federal governments to monitor access and quality. Quality performance standards are evolving, and ensuring access and quality of care in a managed care environment will require fiscally solvent plans, established provider networks, education of providers and beneficiaries about managed care, and awareness of the unique needs of the Medicaid population.

The success of managed care programs depends on adequate financial support through enrollee premiums, a focus on wellness and prevention, and corporate solvency enhanced by good management practices, moderate enrollee usage, and a stable economic environment.

Other Government Programs

A federal health insurance program known as the Consolidated Omnibus Budget Reconciliation Act, which was developed in 1985 and designated to be self-financing, protects unemployed workers who have lost their benefits. Another workers’ compensation program is state administered and requires employers to pay health care costs of workers who sustain illness or injury associated with their jobs. In addition to third-party reimbursement, the government offers some direct health services to selected populations, including Native Americans, military personnel, veterans, merchant marines, and federal employees.

Claims Payment Agents

Claims payment agents administer the claims payment process of government third-party payments. That is, the government contracts with private agents to handle the claims payment process. More than 80% of the government’s third-party payments have been handled by these private contractors, who sometimes are known as fiscal intermediaries (when processing Medicare hospital claims), carriers (when dealing with insurance under Medicare), or fiscal agents (as applied to Medicaid programs). As an example, Blue Cross, in addition to being a private insurance company, also is a claims payment agent for Medicare.

Direct Consumer Reimbursement

A second major source of health care financing comes from direct fees paid by consumers. This refers to individual out-of-pocket payments made for several different reasons. One is payments made by individuals who have no insurance coverage so that fees must be paid directly for health and medical services. Another is payments for limited coverage and exclusions (services for which the consumer must bear the entire expense). For example, many individuals carry only major medical insurance and must pay directly for physician office visits, prescriptions, eye glasses, and dental care. In other instances, the insurance contract may include a deductible amount that must be paid by the insuree before reimbursement begins (eg, the first day of hospital care under Medicare must be paid by the patient—$876 per benefit period in 2004). The contract may be established on a copayment basis, which determines a percentage to be paid by the insurer and the rest by the individual. Or, the individual may pay the remainder of a health service bill after the insurer has paid a previously agreed-on fixed amount, such as a fixed coverage for labor and delivery. Direct consumer payment has accounted for approximately one third of total personal health care expenditures in the United States.

Private Support

Private or philanthropic support, a third source, contributes both directly and indirectly to health care financing. Many private agencies fund programs, underwrite research, and provide benefits for people who otherwise would go without services. In addition, volunteerism, the efforts of numerous individuals and organizations who donate their time and services, provides tremendous cost savings to health care institutions. It also enables many individuals to receive services, such as home-delivered meals or transportation to health care facilities, at no charge. Philanthropic financing of health care has significantly decreased in the last two decades. However, continued private support is essential, particularly when federal and state monies for health and social programs have been severely restricted (Harrington & Estes, 2001).

TRENDS AND ISSUES INFLUENCING HEALTH CARE ECONOMICS

Cost Control

Control of rapidly rising costs has been one of the largest driving forces behind health care reform in the 1980s and 1990s. Despite a variety of cost-control strategies tried by public- and private-sector payers, health care costs have continued to rise. In 2000, health care costs rose 7.2%, the biggest jump in a decade, and employer-based health premiums were expected to rise 13% to 16% in 2002, the largest increase since 1990 (Hellander, 2002). Health expenditures in 1980 accounted for 9.1% of the gross national product (GNP), which is the total value of all goods and services produced in the United States economy in 1 year. Health expenditures rose to 12.6% of the GNP by 1990, to 14.1% in 1994, and then modified somewhat to 14% in 1997, but rose again and by 2000 were greaer than 15% (U.S. Department of Commerce, 2001). In 1999, HCFA (now called the Center for Medicare and Medicaid Servces) estimated that health expenditures would rise to $2.1 trillion by the year 2007; this prediction may hold true or be exceeded, but with managed care, the impact of HMOs, and the general concern about health care costs held by all members of the health care community, it may, hopefully, turn out to be an overestimation. Overall, our health care economic situation as a country is not as positive as it could be.

 Many groups are underserved; prescription medication coverage is not common in health care plans and is coming into the Medicare program in a limited way in 2006; and the poorest of the poor gain in numbers and go without any health care coverage (see Bridging Financial Gaps). Health care costs in the United States remain high; however, in the 1990s they decelerated from the escalation experienced during the 1970s and 1980s, when costs were spiraling out of control. Nonetheless, in the early 2000s there was again a dramatic rise. A major factor contributing to the high health care costs of those two decades was that health care providers were rewarded for focusing on the tertiary level of preventative care—the highest level of health care services and the most expensive—rather than focusing on the lessexpensive primary and secondary health care practices. Areas that saw increases included nursing home care, medications, and dental care costs.

A focus on primary prevention demands a paradigm shift in thinking about the practice and delivery of health care. It is one that fits more closely with the mission of public health. It expects that citizens are involved in their health care, are knowledgeable about their health status, manage self-care practices, and modify lifestyle behaviors to promote wellness. This creates a rich environment for community health nurses to work in collaboration with primary care practitioners and other health care professionals to keep the cost of health care under control while providing quality care focusing on primary prevention.

Cost sharing is a cost-containment strategy in which consumers pay a portion of health care costs. Insurance deductibles of $100 to $500 per person per year are typical, as are coinsurance rates of 20% per service. Cost sharing has successfully reduced utilization of health services without having negative health effects. Utilization review techniques have further enhanced utilization and cost control. However, when considering coverage for low-income and some elderly persons, cost sharing appears to have limited usefulness (Sultz & Young, 2001).

Global Cost Control

Internationally, health care expenditures also are of concern. Health care costs consumed a greater percentage of the Unites States’ GNP than that of most of the 15 countries in the Organization for Economic Cooperation and Development (OECD) between 1980 to 1997. Health care expenditures remained the same over those 17 years in Turkey and Sweden and decreased in Denmark. Public health expenditures rose 60% in the United States during those years; in other countries, the increase was more modest, and in four countries—Denmark, Ireland, Italy, and Sweden—expenditures decreased. It seems likely that the health of citizens in the countries that have been spending less on health care over the last 20 years or that have spent a smaller share of their GNP might be poorer; however, this is not necessarily true. In life expectancy, women in the United States rank below 18 other countries and men rank below 24 countries, including Italy and Sweden (Display 7–1). Using health care dollars wisely, promoting health through primary prevention, and combining other factors such as heredity, diet, exercise, attitude, and a moderate pace of life all contribute to longevity.

Access to Health Services: The Uninsured and Underinsured

  A growing segment of the U. S. population has limited or no access to health care because they are without coverage for health services. The consequences of not getting needed medical care are not trivial and can result in unnecessary hospitalization and serious health problems. In 2000, 38.7 million Americans were uninsured for the entire year, a drop from 39.3 million in 1999 (Hellander, 2002, p. 579). These figures represent a revised Census Bureau survey methodology, which reduced the baseline figure of the number of uninsured  in 1999 by 8%. Before the revision, the Census Bureau reported that more than 42 million persons lacked coverage in 1999. Who are the uninsured? They are predominantly workers and their families, many of whom have low incomes. The poor and the elderly are among the most vulnerable to access problems. Although the prospective payment system has cost-saving benefits, it also has negative effects. The prospective payment system has shortened hospital length of stays, on average by 24%. But researchers from RANDUniversity of California, Los Angeles, found that under the prospective payment system elderly patients were much more likely to be discharged in an unstable condition than before and that the risk of dying for these patients was much higher than before. This situation is only made worse by the crisis-level nursing shortage presently being experienced around the country. Measures were taken to reduce risks to discharged patients with a broadening array of home care services, which have been expanding since the 1980s (see Chapter 37). To control costs in the health care setting, the Balanced Budget Act also affected home care services. A benefit of the act was to decrease federal government spending on health care, by making numerous changes to the way programs operate (Harris, 1998). This is another example of reducing costs at the more expensive tertiary level of prevention. As a result, real people with disease processes in progress are affected.

Medicare Plus Choice Plans, created in 1997, were intended to increase beneficiary participation in HMOs and other private plans. The Medicaid program, too, depends on managed care to deliver services to the 36 million Americans enrolled in 2001. Tight budget constraints on Medicaid operations have resulted in provider payment rates that often are substantially below market rates, contributing to access problems. Capitation rates need to be sufficient to ensure that plans are able to care for Medicaid enrollees. The future success of Medicaid managed care depends on the adequacy of the capitation rates and the ability of state and federal  governments to monitor access and quality.

Managed Care

The term managed care became popular in the late 1980s and early 1990s. It refers to systems that coordinate medical care for specific groups to promote provider efficiency and control costs. Although the term is relatively new, the concept has been practiced for many years through a variety of models of alternative health care delivery. It is a cost-control strategy used in both public and private sectors of health care. Care is “managed” by regulating the use of services and levels of provider payment. This approach includes the use of HMOs and PPOs. In contrast to FFS models, managed care plans operate on a prospective payment basis and control costs by managing utilization and provider payments. The managed care model encourages the provision of services within fixed budgets, thus avoiding cost escalation. However, if a system rewards increased FFS billings, managed care can provide only a partial solution to controlling utilization. These are issues that various managed care organizations (MCOs) are trying to eliminate.

Health Maintenance Organizations

A health maintenance organization (HMO) is a system in which participants prepay a fixed monthly premium to receive comprehensive health services delivered by a defined network of providers to plan participants. The HMOs are the oldest model of coordinated or managed care. Several HMOs have existed for decades, but many have developed recently.

Enrollees benefit from lower costs, less cost-sharing, and minimal billing paperwork. From 1930 to 1965, the HMO movement, supported initially by the private sector, gradually gained federal backing. Group plans were included as a part of Medicare and Medicaid legislation as well as the Partnership for Health Act. The HMO Act of 1973 demonstrated stronger federal support. Amendments to this act in 1976 lifted restrictions and further encouraged HMO growth. Currently, there are numerous HMOs with much internal diversity in the industry. However, HMOs continue to claim unique properties (Harrington & Estes, 2001):

• There is a contract between the HMO and the beneficiaries (or their representative), the enrolled population.

• The HMO absorbs prospective risk.

• A regular (usually monthly) premium to cover specified (typically comprehensive) benefits is paid by each enrollee of the HMO; few additional charges are levied, because the payment mechanism is not FFS.

• HMOs have an integrated delivery system with provider incentives for efficiency. The HMO contracts with professional providers to deliver the services due the enrollees; the basis for reimbursing those providers varies among HMOs.

Official encouragement, government subsidies, and the pressures for cost control spurred the growth of HMOs. Some HMOs follow the traditional model, employing health professionals (eg, physicians, nurses), building their own hospital and clinic facilities, and serving only their own enrollees.

Other HMOs provide some services while contracting for the rest. Variations of the HMO model include solo practice physicians (some also continuing FFS medicine) who affiliate with hospitals. Americans enrolled in HMOs— whether through government programs (eg, Medicare), employer- based programs, or private insurers—number more than 130 million people. The HMOs have been viewed as a positive alternative delivery system because of their potential for conserving costs, which results from their emphasis on prevention, health promotion, and ambulatory care, with a concomitant reduction in hospital and medical care utilization. However, there are questions as to whether the cost savings might result partly from favorable selection of enrollees. Quality concerns also have been raised about the danger of underserving enrollees to stay within payment limits (Sultz & Young, 2001). Nevertheless, since the expanding years of HMOs in the early 1990s, many individuls have chosen a managed care plan.

The American Public Health Association has significant concerns about the ongoing changes

in the organization and financing of medical care and health services and the impact of these

changes on public health. While managed care arrangements hold the promise of providing

affordable, quality health care for our nation, reports of financial considerations taking

precedence over patients’ health deserve attention. Specific issues of concern include

denials of necessary care, underfunding of public health and prevention services, lack of

accountability, loss of choice of health care provider, inadequate access to care (especially

specialists), lack of comparable and consumerfriendly information and data about health plans,

and abuses in marketing (American Public Health Association, 1998a).

These concerns have not gone unattended. The Health Insurance Portability and Accountability Act of 1996 and the Newborns’ and Mothers’ Health Protection Act of 1996 were passed by the 104th Congress of the United States and signed into law by the President. Both significant pieces of legislation addressed health care concerns among the nation’s citizens and official organizations such as the American Public Health Association (APHA). The Health Insurance Portability and Accountability Act assured people that they would not lose health care coverage if they changed jobs. In addition, for a while in the United States, insurance for labor and delivery hospitalization covered only 24 hours or less after the delivery. Infants and mothers were being sent home in unstable postdelivery conditions. Newborns would go home when younger than 1 day of age, in some cases so soon after birth that body temperature was not stabilized and the ability to suck and take the breast or formula was not established. The Newborns’ and Mothers’ Health Protection Act eliminated such “drive-by deliveries,” ensuring that mothers and newborns would have the right to remain in the acute care setting for at least 48 hours, covered by their insurance plan.

Furthermore, in 1998, Congress considered the Patients’ Bill of Rights, modeled after recommendations from the Advisory Commission on Consumer Protection and Quality, which stipulated that managed care plans (APHA, 1998a):

• Provide emergency services

• Are legally liable for medical malpractice

• May not use “gag” clauses in provider contracts

• Offer sufficient access to specialists, including direct access to specialists for ongoing treatment and obstetricians-gynecologists for women

• Offer an external, accessible, independent appeals process for service denials

• May not retaliate against “whistle blowers”

• May not offer financial incentives to providers to discourage service utilization by patients

• Incorporate quality assurance programs

• Reimburse for approved clinical trials

APHA policy supports all of these reforms as they address, at the federal level, some of the problems occurring in the HMO plans during the years of significant growth.

Preferred Provider Organizations

A preferred provider organization (PPO) is another model of managed or coordinated care that developed earlier than the HMO. A PPO is a network of physicians, hospitals, and other health-related services that contracts with a third-party payer organization to provide comprehensive health services to subscribers on a fixed FFS basis. Because of contractual fixed costs, employing organizations who subscribe can offer medical services to their employees at discounted rates. In PPOs, consumer choice exists. Enrollees have a choice among providers within the plan and contracted providers out of the plan. The PPOs practice utilization review and use formal standards for selecting providers.

Enrollment in PPOs grew from about 10 plans in 1981 to more than 700 plans in the 1990s. The number of people enrolled in PPOs also increased, from an estimated 10.4% of individuals with private insurance in 1988 to 40% by the late  1990s, with the numbers leveling off as the decade came to a close. Early use of PPOs appeared to promote cost savings, but the long-range cost effectiveness of this model has yet to be proved, especially with the expansion of HMOs. Other variations on managed care models continue to appear. One is the point-of-service network, which combines HMO cost containment with PPO freedom to choose providers. Enrollees may use their HMO’s physicians or may select outside physicians by paying a higher coinsurance charge. Issues of cost, quality, extent of coverage, and freedom to choose providers remain dominant in discussions of the managed care concept.

Health Care Rationing

The concept of rationing in health care refers to limiting the provision of adequate health services to save costs, but in so doing jeopardizing the well-being of some groups of people. Rationing implies that resources are limited and therefore must be used sparingly. Its effect is to restrict people’s choices and deny access to beneficial services. Although some consumer choice is involved, mostly it is the providers and insurers of health services who are unilaterally making rationing decisions to contain costs. When rationing occurs, there always is the danger of compromising what is acceptable to consumers and the quality of services that they receive.

Rationing in health care has been practiced for many years. With limited resources for health services delivery, government programs have had to establish strict eligibility levels and monitor the use of these resources sparingly to ensure their most equitable distribution. Private insurers, to maintain organizational viability and some kind of profit margin, have engaged in rationing to exclude enrollees who are at greatest risk for health problems (Sultz & Young, 2001) (see Bridging Financial Gaps). Advances in knowledge and technical capabilities through research and technology compound rationing decisions. When several individuals need an organ transplant and only one organ is available, what criteria should be used to select the recipient? Now that it is known that certain lifestyle behaviors, such as smoking or driving without restraints, create health risks, should people who engage in these activities pay a higher price for health care or be excluded from certain services? Should a younger person needing specialized surgery take priority over an elderly person needing similar care? There are no easy answers. Providers and insurers have struggled with these difficult policy issues for years. In today’s health economics, the problems are even more complex.

Competition and Regulation

Competition and regulation in health economics often have been viewed as antagonistic and incompatible concepts. Competition means a contest between rival health care organizations for resources and clients. Regulation refers to mandated procedures and practices affecting health services delivery that are enforced by law. In a society where freedom of choice and individualism have long been valued, competition provides opportunities for entrepreneurism, free enterprise, and scientific advancement. Yet to promote the public good, oversee equitable distribution of health services, and foster communitywide participation, regulation also serves an important role.

Health care incorporates four major kinds of regulation: (1) laws, (2) regulations, (3) programs, and (4) policies (Sultz & Young, 2001). Laws that regulate health care include any legislation that governs financing or delivery of health services, such as legislation regulating Medicare reimbursement to hospitals. Regulations guide and clarify implementation; they are issued under the authority of law and are part of most federal health care programs. Examples include regulations governing project grants such as HMO development, formula grants such as Hill-Burton, and entitlements such as Medicare and Medicaid (Jacobs & Rapoport, 2002). Regulatory programs are created from free-standing legislative enactments and are designed to accomplish specific goals, such as accreditation and licensing rules for hospitals, public health agencies, and other health service providers. Regulatory policies have a broader focus and involve decisions that shape the health care system by channeling the flow of resources into it and setting limits on key players’ actions. Examples of regulatory policies are found by reviewing state or federal budget proposals for funding programs such as health manpower training, research, and technology development.

From the 1950s through the 1970s, the federal government assumed a strong role in the regulation of health services. First, federal subsidy of health care costs increased, and there was greater federal control of state programs. Health services became regionalized and more comprehensive. Federal appropriations supported operational as well as capital and planning costs. There was greater federal support for health research and the training of health professionals. Group medical practice multiplied as a cost-saving measure. More than 60% of the population was covered by some form of prepaid health insurance, largely because of the effects of Medicare and Medicaid. There was an increase in interagency health planning cooperation and improved health program evaluation. Neighborhood health centers, community mental health centers, and other programs were developed to improve health care access for everyone. Although costs were rising, it was a period of relative economic stability that emphasized quality of care. During this period, the federal government assumed a major role, regulating the planning, use, and reimbursement of health care services. In the early 1980s, the passage of the Omnibus Budget Reconciliation Act caused dramatic changes affecting health care. The federal government, having failed to contain rising health care costs, shifted responsibility for the public’s health and welfare back to state and local governments. Large amounts of federal funding for health research, health manpower training, and public health programs were withdrawn. Continued escalation of health care costs prompted a concentrated effort among public and private providers alike to find cost-containment measures. From all this grew the competition-versus-regulation debate. Competition, its proponents say, offers wider consumer choice and positive incentives for cost containment and enhanced efficiency (Sultz & Young, 2001); that is, consumers are free to select among various health plans on the basis of cost, quality, and range of services. Competing providers must develop efficient production and distribution methods to stay in business, and consumers, because of the required cost sharing that is part of the competition model, are more likely to use only necessary services. Examples of competition are increasingly evident as more health plans, including HMOs and PPOs, vie with insurance companies for subscribers (see What Do You Think? II). Many hospitals, too, compete aggressively for patients. For example, some hospitals now promote their services with advertisements depicting a new mother and father having a candlelight dinner in the hospital with their newborn infant in the bassinet beside them, or surgical centers promote the “hotel guest” concept with dramatically appointed rooms including meals and lodging for a guest. Although it appears that competition offers the best service for the least cost, regulation advocates have for almost 20 years argued that there are at least four problems associated with the competition model: (1) consumers often do not make proper health care choices because of limited knowledge of health services; (2) competition may discriminate against enrolling certain consumers, especially high-risk, high-cost patients, thus excluding those who may need services the most; (3) the competition model may not encourage enough teaching and research—expensive elements of our present system; and (4) quality may be sacrificed to keep costs down. Regulation advocates conclude that standardization and controls are needed to guarantee quality and equal access. Leaders in the field have concluded that both competition and regulation are needed (APHA, 1998b; Sultz & Young, 2001; Kongstvedt, 2002). With foresight, McNerney wrote in 1980, “It is rapidly becoming apparent that what we need is a proper balance between competition and regulation with more effective links [and] regulation [should be] used as a force to keep the market honest” (p. 1091).

EFFECTS OF HEALTH ECONOMICS

ON COMMUNITY HEALTH PRACTICE

Health economics has significantly affected community health and community health practice by advancing (1) disincentives for efficient use of resources, (2) incentives for illness care, and (3) conflict with public health values.

Disincentives for Efficient Use of Resources

All of the system structures that directly or indirectly promote cost escalation and prevent cost containment contribute to disincentives for efficient use of resources. For example, retrospective financial reimbursement, with its lack of setting limits, encourages spending on nonessential tests and treatments and drives up costs. Tax-deductible employer contributions for health care coverage and nontaxable employee health benefits encourage unnecessary use of services and drive up costs. Lack of cost sharing by consumers and no financial risk for decisions made by providers create further disincentives to keep costs down.

Community health has been affected in several ways. Abuse of resources in some parts of the system means a depletion in other areas. Community and public health programs recently have experienced diminished federal and state allocations and severe budget cuts affecting even basic community health services. Competition from the private sector in home care and other community services, such as health education programs, has forced traditional public health agencies to reexamine their programs and seek new avenues for service and new revenue sources. Costs indirectly affect even appropriate use of nursing personnel in community health. Failing to recognize the differences in skills of community health nurses and less-prepared personnel, proliferating agencies in community health often have hired persons who are underqualified to give the needed high-caliber and comprehensive care. Finally, the advent of prospective payment and limits on lengths of stay have encouraged early hospital discharge, resulting in more acutely ill people needing home care services. The immediate effect has been an increase in the demand for highly skilled and more expensive home care services, which requires changes in provision patterns of community health care. The longrange effects of this phenomenon on family stress and caregiver health, on community health care reimbursement, and on the nature and structure of community health services, including the role of the community health nurse, have yet to be determined.

Incentives for Illness Care

The traditional American health care system inadvertently tends to promote illness because health care providers have primarily been rewarded for treating problems, not for preventing them. Hospitals have had more income when their beds stayed full of sick or injured people. The bulk of most reimbursable health services has centered on treating illness or disability in hospitals, nursing homes, and ambulatory care facilities, using physicians or skilled nursing care in the home—situations in which the individual must play the role of patient. Health promotional nursing activities such as comprehensive prenatal, maternal, and infant care; health education; childhood immunizations; and home services to enable the elderly to live independently have not been covered by most insurers.

A system that financially supports illness care affects community health practice in several ways. The number and severity of health problems in a community increase when individuals postpone care because they cannot afford visits to the doctor or clinic. It has been more difficult to encourage community clients to assume responsibility for their own health and to engage in self-care and prevention. Furthermore, such illness-oriented incentives create a basic societal valuing of illness care that, conversely, devalues wellness care. Health promotion and disease prevention efforts become second-ranked priorities in the competition for scarce resources. In communities where a greater proportion of community health practice is spent on treatment of disorders and rehabilitation, resources are limited for prevention and health promotion. Prepayment methods and the growth of managed care have been positive moves in the direction of a more wellness-oriented financial incentive structure. An HMO has the incentive to offer preventive and healthpromoting services such as early detection and treatment of symptoms, regular physical examinations, and health teaching. Health care reform proposals show promise of greater recognition of the cost-saving value of prevention efforts. Managed care has evolved but remains a “system of business strategies employed to make health care services efficient and cost-effective” with the “highest priority to market principles” (Drevdahl, 2002, p. 163). This makes individual rights significant, whereas societal obligations are pushed to the background. “Freedom of choice and action take precedence over issues of equality and equity” (p. 163).

The MCOs have business-focused goals which are given more consideration than is equal access to health care. Initially, MCOs focused on event-driven cost avoidance. Strategies included decreasing inpatient days, decreasing specialty physician use, using physician extenders, and implementing provider discounting. This evolved into a second stage, in which the principal objective was to control resource intensity and improve the delivery process. Strategies used to meet this objective included capitation of specialist costs, controls on units of service, patient-focused redesign, clinical pathways, and total quality management.

The emphasis, however, is now shifting to a focus on community-based health status improvement

that goes beyond just measuring utilization of care or mortality outcomes. This focus calls

for new strategies, such as community health assessments, identification of high-risk

individuals, targeted interventions, case management, and management of illness episodes

across the continuum (Weiss, 1997, p. 28).

Weiss (1997) believed that community health assessments will become standard quality tools for MCOs. Community assessments establish the baseline health status of a community and measure changes in the health of the community over time. Community health assessments must include source information that is both primary (health status assessment surveys, focus groups, and satisfaction surveys) and secondary (data collected by public health agencies and state agencies, such as birth rates, mortality rates, and incidence of communicable diseases in the community).

Improving the health status of a community mandates that the MCO—the organization providing health care services through managed care agencies, such as an HMO or PPO—be actively involved in accurately assessing the community’s health status and the major issues facing the community. This would involve “informing health care consumers of how to care for themselves and empowering them to do so, and developing a community action plan that fosters collaboration among organizations and focuses on preventive service strategies” (Weiss, 1997, p. 29). Are these not the proposals that public health advocates have been making for more than a century? In 2002, Drevdahl expressed concerns regarding the paradoxical missions of public health and managed care. One relies on partnerships for fostering health care equity and creating healthy communities and populations as it embraces a social justice mission, whereas the other “falls more along the line of market justice” (p. 163). Perhaps the incentive to keep costs down will be the motivation needed to work with clients at the primary prevention level of care. Although public health proponents have advocated preventive care as the best care for the individual, family, and community as long as the goal of community health is reached, the motivating factor becomes insignificant. If the community health approach is embraced by MCOs, the conflict with public health can be minimized and perhaps eliminated.

Managed Care and Public Health Values

Competition in health care is a reality with which community health practice must cope. Although competition offers several benefits, it poses some dilemmas for community health that may be difficult to resolve. Values underlying the competition model can be in direct conflict with several basic public health values (Drevdahl, 2002). Competition for the healthier and younger enrollee, for example, encourages MCOs to develop market strategies that entice the client to choose one over another. This is a win-lose situation for the MCO: one MCO wins while another loses. Public health, however, operates on the basis of collaboration and cooperation. Competition among MCOs serves a selected market partly determined by those who are able to purchase products or services.

Public health is committed to serving all persons in need, regardless of ability to pay. Traditionally, the competition model has focused on individuals and has been oriented to the present; public health is concerned with aggregates and is future oriented, emphasizing prevention. Competition establishes relatively fixed limits for service, whereas public health must remain flexible if it is to respond to the health needs of the entire population. These dramatic differences between MCOs and public health are beginning to blur and out of necessity will continue to be less adversarial and more collegial. By shifting their focus to community health as a systems outcome, MCOs can create several positive  changes, including a safe environment, wholesome nutrition, healthy lifestyle, adequate education, sufficient income, meaningful spirituality, challenging work, recreation, and functional families (Weiss, 1997).

If enrollees in health insurance programs from Medicare, Medicaid, or other MCOs become empowered to assume re sponsibility for their own self-care and well-being, a cooperative and collaborative relationship can be achieved between MCOs and public health. Healthy competition may remain between MCOs for enrollees, but this level of competition will help to decrease costs and improve quality of care, as has occurred with telephone services and utility companies. Consumers can select their service providers, choosing the one that best fits their needs. Competition always has improved services and lowered costs in other markets, such as among retailers, and should do the same in the health care industry.

There are philosophical differences as well as constraints, such as civil service restrictions and political influences, under which most public health agencies must operate, that make it difficult for them to compete. Likewise, MCOs have stockholders, boards of directors, employees, and state and federal regulations that they must satisfy. Public health agencies must remain committed to providing the health promotion and disease prevention services that are their public trust. This may become the commitment of MCOs as they see the cost savings and health benefits of disease prevention. Yet some aspects of competition seem necessary if both forms of health care delivery are to stay in business. Exclusion from health care competition, freedom from unreasonable constraints, and dependable financial

support are needed to maintain the organizational viability of many public health agencies. Competition also may stimulate new and innovative community health services and the introduction of new roles and revenue sources for traditional public health agencies. The evolution of the reform of health care implementation may see developing public and private health care partnerships, with MCOs contracting with public health agencies for certain services and MCOs more effectively expanding the reach of public health agencies into the suburbs or rural areas. Reform will need to continue to address issues affecting the delivery of public health services.

SUMMARY

Health care economics studies the production, distribution, and consumption of health care goods and services to maximize the use of scarce resources to benefit the most people. This science underlies the financing of the health care system. It is influenced by microeconomics as well as macroeconomics.

Health care is funded through public and private sources, which fall into three categories: third-party payers, direct consumer payment, and private support. Health care services have been reimbursed either retrospectively, typical of FFS plans, or prospectively, typical of most HMOs.

Several issues and trends have influenced community health care financing and delivery and are important to understanding health care economics and helping to improve community health. They include cost control, financial access, managed care, health care rationing, competition and regulation, managed competition, universal coverage and a single-payer system, and health care reform.

The changing nature of health care financing has adversely affected community health and its practice in three important ways: (1) retrospective payment without limiting costs, tax-deductible employer contributions for health care coverage and nontaxable employee health benefits, together with a lack of consumer involvement in cost sharing, have created disincentives for efficient use of resources; (2) because the health care system traditionally has reimbursed only for treatment of the ill or disabled, with no reward for health promotion and prevention efforts, it has promoted incentives to focus only on illness care; and (3) the competition model, which has long driven up health care costs and eliminated many from being able to afford health care services, has generated a conflict with the basic public health values of health promotion and disease prevention for all persons. Health care reform efforts in the 1990s focused on reversing these patterns by combining positive elements of competition, free enterprise, and regulation to allow all individuals access to adequate health care and to bring MCOs more in line with the goals of public health. However, unexpected challenges to homeland security and international crises bringing us to the brink of war have kept the concerns for rising health care costs off federal agendas as legislators deal with other pressing issues.

 

REFERENCES

American Nurses Association (2002). Nursing’s Agenda for Health Care Reform. Retrieved October 14, 2003, from http://nursingworld.org/readingroom/magenda.htm

American Public Health Association. (1998a). Managed care reform: Fact sheet. Washington, DC: Author.

American Public Health Association. (1998b). Regulatory reform: Fact sheet. Washington, DC: Author.

ASTRO (American Society for Therapeutic Radiology and Oncology). (2004). Healthcare economics. Retrieved February 14, 2004, from http://www.astro.org/healthcare_economics/medicare_reimbursement_and_coverage/PhysicianPayment Cut.htm 

Brink, S. (2002). Living on the edge. U. S. News & World Report, 133(14), 58–64.

Center for Medicare and Medicaid Services. (2002). Retrieved October 3, 2003, from http://www.cms.gov

Conger, M.M. (1999). Managed care: Practice strategies for nursing. Thousand Oaks, CA: Sage.

 

Internet Resources

American Nurses Association: http://www.nusingworld.org/readingroom/rnagenda.htm

Center for Medicare and Medicaid Services: http://www.cms.hhs.gov

Joint Commission on Accreditation of Healthcare Organizations: http://www.jcaho.org

Kaiser Family Foundation: http://www.kff.org

Medicaid: http://www.medicaid.gov

Medicare: http://www.medicare.gov

National Committee for Quality Assurance: http://www.ncqa.org