WEEK 5, DQ 1
Describe the various reimbursement sources of payment in health care today.
Reimbursement for health care comes from a variety of sources, including the state and federal governments (such as Medicare and Medicaid), private insurers, and consumers (Sullivan & Decker, 2009, p. 186). In 1965, Congress passed legislation that established Medicare and Medicaid programs as Title XVIII and Title XIX of the Social Security Act. Medicare was established in response to the specific medical care needs of the elderly. Medicaid was established in response to the widely perceived inadequacy of welfare medical care under public assistance (Hoffman, Klees, & Curtis, 2000). The level of reimbursement from Medicare and Medicaid is often too low to assure individuals receive high-quality health care. Under Medicaid programs, most states pay about half as much as other insurers for health care services. This results in Medicaid patients having to wait until a hospital bed is available in order to obtain elective surgeries; however, they received medical care for free. Medicaid patients in return have no input into the terms of the discounted care or the conditions under which they receive the surgical care. Also, the medical services these patients receive are often dictated by title amount the Medicaid bureaucracy will pay, and these patients are forbidden to add to the projected amount in order to purchase higher quality services (Mackinac Center for Public Policy, 1990).
The Medicare system is a per-case reimbursement mechanism in which inpatient admissions are divided and classified into categories called diagnosis-related groups (DRGs). The DRG reimbursement system limits the amount the government will pay or a flat rate per case. Hospitals are forbidden to charge more than the DRG price or lower their prices by giving rebates to patients who use their services. Among elderly patients, young elderly are much less expensive to treat than the...