Defining the Health Care System and Its Trade-offs

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• Chapter 2
• Defining the Health Care System and Its Trade-offs

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LEARNING OBJECTIVES

1. What framework can be used to understand the
   health care system regarding who pays, how much
   is paid, and where and to whom care is provided?
2. Who are the main stakeholders in the health care
   system?
3. What are the main trade-offs, among cost,
   quality, and access that health care
   organizations must face in allocating their
   resources?

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LO1. What framework can be used to understand the
health care system regarding who pays, how much
is paid, and where and to whom care is provided?

• Health is the state of complete physical,
  mental, and social well-being and not merely the
  absence of disease or infirmity.
• US health care system is an apparently ad hoc
  arrangement of small units, each with its own
  goals and incentives, whose purpose is treatment
  of acute diseased of insured populations.
• Disconnect exists between definitions of health
  and health care system.

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LO1. What framework can be used to understand the
health care system regarding who pays, how much
is paid, and where and to whom care is provided?
(cont)

• Andersons model - continuum
• Market maximized version - favors private and
  profit-oriented insurance (United States)
• Market minimized version - eventual state-owned,
  stated-financed, and state-salaried health care
  system, paid for by general tax revenues (Cuba)
• Roemers model -
• Starts with Andersons political spectrum
  (laisez-faire to socialist)
• Adds economic dimension (affluent to poor)

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LO1. What framework can be used to understand the
health care system regarding who pays, how much
is paid, and where and to whom care is provided?
(cont)

• Must include more than political and economic
  factors
• Insert Table 2.1 for discussion

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LO2. Who are the main stakeholders in the health
care system?

• Individuals and their advocates - recipients of
  care and those interested in them
• Public sector - public programs differentiated
  from one another by who they cover for health
  care benefits
• Private sector - defined by what they do
• Payers - insurance companies, employers, unions,
  business associations, charitable organizations
• Providers - physicians, hospitals, nursing homes,
  pharmacies, independent diagnostic facilities
• Suppliers - guides to explore theme and variation

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LO2. Who are the main stakeholders in the health
care system? (cont)

• Strategy
• Handling major issues
• Setting organizational direction
• Provided framework for short-term decisions
• Trade-off analysisstrategic choices
• Cost
• Quality
• Access

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LO3. What are the main trade-offs, among cost,
quality, and access that health care
organizations must face in allocating their
resources?

• Cost is actual payment based on
• Price
• Demand
• Supply
• Volume
• Production costs
• Cost shifting
• Who pays
• Volume
• Efficiency of execution
• Number of units of care to be applied
• Intensity
• Level of service
• Medical technology
• Site of Service

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LO3. What are the main trade-offs, among cost,
quality, and access that health care
organizations must face in allocating their
resources? (cont)

• Quality
• Amenities - first impression
• Service - support actual business of delivering
  care
• Technical - work that most directly affects
  outcomes
• Access
• Availability
• What is available?
• What is covered?
• When care can be provided?
• Infrastructure
• Sustainability

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CONCLUSION

• Many domains must be considered in a framework to
  understand health care systems.
• The main stakeholders in the healthcare system
  are individuals, the public sector and the
  private sector.
• Each company must make strategic choices. It
  cannot focus on cost, quality, AND access.