Online Lecture Notes and Presentation Slides
When citing online lecture notes, be sure to provide the file format in brackets after the lecture title (eng. PowerPoint slides, Word document)
Lastname, F. M. (Year, Month Date). Title of presentation [Lecture notes, PowerPoint slides, etc). Publisher. URL
Smith, C. (2017. October 13). Al and machine learning demystified [PowerPoint slides). SlideShare. https://www.slideshare.net/carologic/al-and-machine-le
demystified-by-carol-smith-at-midwest-ux-2017
16
A primer on health
economics of nursing
and health policy
Len M. Nicholsa
“The price of light is less than the cost of darkness.”
Arthur Nielsen
Economics is the study of how resources are allo-
cated by people operating in the real world, that
is, with constraints on their time, their money,
and their knowledge. It can be summarized as
the study of choices people make under con-
straints. Because some constraints are operable
on everyone, economists say the real world is a
world of scarcity, by which they mean no one,
and certainly not everyone, can have everything
they might want. Sometimes choices today can
relax constraints in the future (e.g., studying for
an advanced degree can enable someone to earn
higher wages and have more income to spend
on goods and services in the future). Sometimes
choices today are extremely limited by effective
constraints (e.g., when the only jobs available
pay the minimum wage; no matter how hard
one works or how much one makes, there are
only 24 hours in a day and every human must
sleep).
1 min left in chapter
22%
Economics as a discipline
Choices under constraints produce trade-offs,
which usually boil down to the fact that you can
have more of one desirable thing only if you give
up another. Time for money is the classic trade-
off, and allocating a limited budget over com-
peting priorities is something every manager
(household or business) in the modern world
is familiar with. This sets up the fundamental
economic concept of opportunity cost, or what
must be given up to get something else. This is
a better definition of cost than price or out-of-
pocket payment, both of which can be distorted
by insurance, taxes, or subsidies from the true
total cost of acquiring any good or service.
Economics is a social science, which means it
uses logic and analytic tools to develop mod-
els that attempt to characterize and explain the
essence of a human choice situation. Models
must omit some details to be manageable, and
the art of creating models is deciding which de-
tails are essential (and measurable) and which
can be omitted. The results of the models are
predictions or hypotheses about how the real
world works, how choices will be made, or what
the implications of choices already made will be.
These predictions and hypotheses can then be
tested against real world observations or data.
When the models are confirmed as correct, then
the results are added to the body of economic
knowledge and passed on to others. When the
models and predictions are shown to be inac-
curate, then the models and thinking about the
1 min left in chapter
22%
0 N N 8
A
O 13% 11:24
type of problem under study are revised. In that
sense, economics is empirically driven or evi-
dence based. Economics has evolved over time
and continues to evolve, as new data emerge
and new models, theories, and hypotheses are
created; they compete with old models, theo-
ries, and hypotheses virtually all the time. This
constant evolution is also partly why econo-
mists rarely reach unanimous consensus, but if
a preponderance of evidence exists at a point in
time, then a majority of economists will lean in a
certain direction, just like health or other profes-
sionals do as evidence evolves in their fields.
Why health care is a hard economic case
Health care has some particular features that
make it different from most markets, even
though economic analysis can still be applied
with appropriate attention to these details.
Number one is unavoidable information asym-
metry. This means either buyers or sellers have
knowledge the other does not about a good
or service. This asymmetry violates one of the
key tenets of competitive markets and creates
the opportunity for some market participants
to take advantage of others without safeguards
and institutions to protect them. Health profes-
sionals know more than most patients will ever
fully understand about the patient's condition
and treatment options. This information gap is
why the Hippocratic Oath and the Nursing Code
of Ethics came into being and use long ago. In
the extreme case, malpractice law and the pro-
cedures that health care organizations under-
take to protect themselves from liability claims
also protect patients. Plans and employers and
1 min left in chapter
22%
17
Financing health
care in the
United States
Joyce A. Pulcini, Betty Rambur
“What does U.S. health care have in common with an exotic
international bazaar? The prices at one are almost never
posted, whether for a heart bypass operation or antique rug.
And the final price will almost certainly have little to do with
the seller's opening bid.”
Susan Dentzer
Health care financing in the United States is fragmented,
complex, and fuels the most costly care in the world. De-
spite this expense, the United States consistently ranks
low in quality and the last in health outcomes among 11
wealthy countries (Schneider et al., 2017). As designed,
our system leaves many overtreated (Lyu et al., 2017),
and, paradoxically, underserved (Grady & Redberg, 2010)
-others undertreated, and all riddled with unneces-
sary, inefficient, and harmful care (Berwick & Hackbarth,
2012). Representing roughly one-fifth of the U.S. econ-
omy, medical errors are recognized as the third leading
cause of death in the country (Makary & Daniel, 2016).
The Affordable Care Act (ACA) of 2010 took steps to re-
shape how health care is paid for, enhance transparency,
and test new payment and delivery models, but its pri-
mary purpose was to extend insurance coverage to the
large number of uninsured Americans through private
1 min left in chapter
23%
7 M T 8
©
O 13% 11:25
insurance regulation, expansion of public insurance pro-
grams, and creation of health insurance marketplaces to
foster competition in the private health insurance mar-
ket. Despite ACA implementation and revisions, health
insurance affordability and cost containment are signifi-
cant ongoing policy challenges (see Chapter 18 for more
on the ACA). This chapter will provide an overview of
U.S. health care financing, reimbursement and payment
reform, including the impact of the ACA, the Tax Cuts
and Jobs Act of 2017 (TCJA) (P.L. 115-97, Congress.gov,
n.d.)—an amendment to the Internal Revenue Code with
health care implications—and selected federal adminis-
trative rules changes and state-led initiatives.
>
Historical perspectives on
health care financing
Understanding today's complex and often confusing ap-
proaches to financing health care requires an exam-
ination of the nation's values and historical context.
Some dominant values underpin the U.S. political and
economic systems. The United States has a long history
of individualism, an emphasis on freedom to choose
alternatives, and an aversion to large-scale government
intervention into the private realm. Compared with other
industrialized nations, social programs have been the ex-
ception rather than the rule and have been adopted pri-
marily during times of great need or social and political
upheaval. Examples of these exceptions include the pas-
sage of the Social Security Act of 1935 and the passage of
Medicare and Medicaid in 1965.
Health care in the United States had its origins in
the private sector market with an aim of assuring re-
imbursement to physicians and hospitals (Starr, 1982),
rather than providing care to consumers. The political
power of physicians, hospitals, and the insurance indus-
try has fueled a continuing debate about the degree to
which government should be involved in health care.
Other highly developed countries, such as Canada, the
United Kingdom, France, Germany, and Switzerland, use
a range of private and public financing mechanisms to
provide health care for all their citizens. In contrast, the
United States has viewed health care as a market-based
1 min left it chapter
23%
[ N H 3
O 13% 11:26
a
commodity, readily available to those who can pay for it
but not available universally to all people. The passage of
the ACA was significant, though controversial, in its ap-
proach to expand access to affordable health insurance.
The debate over the role of government in social pro-
grams intensified in the decades after the Great Depres-
sion. The Social Security Act of 1935 brought sweeping
social welfare legislation, providing Social Security pay-
ments, workman's compensation, welfare assistance for
the
poor, and certain public health, maternal, and child
health services, but it did not provide health care insur-
ance for all Americans. During the decade following the
Great Depression, nonprofit Blue Cross and Blue Shield
(BC/BS) emerged as a private insurance plan to cover
hospital and physician care. The idea that people should
pay for their medical care through insurance before they
actually got sick ensured some level of security for both
providers and consumers of medical services. The cre-
ation of insurance plans effectively defused a strong po-
litical movement toward legislating a broader, compul-
sory, government-run health insurance plan at the time
(Starr, 1982). After a failed attempt by President Truman
to legislate a national health plan in the late 1940s, no
progress occurred on this issue until the 1960s, when
Medicare and Medicaid were enacted as amendments to
the original Social Security Act.
BC/BS dominated the health insurance industry until
the 1950s, when for-profit commercial insurance compa-
nies entered the market and were able to compete with
BC/BS by holding down costs through their practice of
excluding sick people (those with preexisting conditions)
from insurance coverage. Over time, the distinction be-
tween BC/BS and commercial insurance companies be-
came increasingly blurred as BC/BS began to offer finan-
cially competitive for-profit plans (Knickman & Kovner,
2015). In the 1960s, the United States enjoyed relative
prosperity, along with a burgeoning social conscience,
and an appetite for change that led to a heightened
concern for the poor and older adults and the impact of
catastrophic illness. In response, Medicaid and Medicare,
two separate but related programs, were created in 1965
as amendments to the Social Security Act. Medicare is a
federal government-administered health insurance pro-
gram for the disabled entitled to Social Security Disabil-
1
1 min left chapter
23%
! M T 6
©
O 13% 11:26
ity Insurance (SSDI) benefits, those over 65 years, and
those with end-stage renal disease (started in 1973) or
amyotrophic lateral sclerosis (started in 2001) regardless
of age. Medicaid is a federal program administrated by
states but funded by both federal and state monies. It is
subject to state rules within parameters required by the
federal government. It was designed to serve low-income
people who are in certain categories, such as pregnant
women with children and elderly or disabled individuals
who meet certain income limits.
Government programs
Current public/federal funding for
health care in the United States
National health expenditures (NHE) are substantial in
the United States, totaling $3.3 trillion in 2016 or
$10,348 per person and accounting for 17.9% of the
gross domestic product (GDP) (Centers for Medicare
and Medicaid Services [CMS], 2018b). The proportion of
health care spending by type of care in 2015 is presented
in Fig. 17.1.
1 min lef chapter
23%
Purchase answer to see full
attachment