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HEALTHCARE MANGEMENT BUSINESS MODELING

In Health, Healthcare, Medicine on September 20, 2012 at 8:00 am

 

Current Healthcare situation is changing. Performance is awarded, not value.

HEALTHCARE MANAGEMENT ISSUES

1. Cost

One of the biggest issues in healthcare management is the cost of medical care services and insurance. Health insurance rates often increase faster than inflation, which means they consume a larger portion of an employer’s money or an individual buyer’s income. Some employers cut their health benefits to employees as costs rise or during a period of financial distress, forcing more people to pay for their own healthcare. Those who can’t afford to do so add to the number of uninsured Americans or receive benefits from a government-subsidized program such as Medicare or Medicaid.

2. Litigation

Litigation is a significant issue for medical practices and healthcare providers alike. The threat of malpractice suits forces doctors to spend a great deal on malpractice insurance, and practitioners must pass some of this cost on to patients. Legal disputes between patients, insurance providers and healthcare providers take time and money away from medical research and treating patients.

3. Access

Access to affordable, high-quality healthcare is far from a given for millions of people. Programs such as Medicare and Medicaid are only available to elderly and low-income individuals and families that qualify. Group insurance is only an option for members of groups that receive reduced rates, such as employees of a company or members of a social club.

4. Staffing

Staffing is an ongoing issue in hospitals, doctors’ offices, nursing homes and other facilities that needs trained specialists on hand to assist patients. The broad shortage of nurses means that many duties fall to untrained or inexperienced assistants, thereby driving up the likelihood of error. Discrepancies in pay draw medical students away from certain fields and into others, resulting in a lopsided distribution of doctors and a lack, or surplus, of options for patients.

5. Types of Care

Healthcare management seeks to offer different types of care to patients. For example, terminally ill patients may elect to receive end-of-life palliative care, which focuses on alleviating symptoms instead of aggressively combating disease. Preventative care takes place before symptoms appear and saves time and money in the long-term, but requires an early awareness and up-front spending by insurance providers or patients. Electing between different types of care requires healthcare providers to educate patients and also demands that individuals take control of their own healthcare needs.
Do we have the Right Models?

Health care is the country’s economic black hole, rising from about 13% of U.S. GDP in 1999 to 18% in 2009. By 2025, it is projected to soar to 25%. Legislation and regulation can only go so far in fixing the system, and new technology can’t do much on its own. To truly combat health care’s cost challenge, the focus must shift to disruptive business models–innovative ways of delivering existing treatments at a much lower cost.

While new business models are needed across the spectrum of healthcare, many impediments prevent new ideas from taking root. Barriers stem from the fact that health care in America doesn’t function like the free market. For instance, consumers rarely pay directly for their own care, so there is little incentive for making trade-offs such as choosing something cheaper that costs less. The regulatory environment often doesn’t allow inexpensive solutions to make it to market. Finally, there are mismatched incentives: hospitals want patients to get that operation, but insurance companies don’t.

Health care in America doesn’t function like the free market. Given all that’s standing in the way of enabling new business models, we must take note when promising ones appear ready to take off.

The lesson isn’t that healthcare companies should accept charging less and making lower profits. Instead, through business model innovation, companies need to examine their value chains and throw away assumptions about the way things are done. By reinventing business models we can dramatically reduce costs and greatly improve care.

 

What does this all mean?

Successful healthcare organizations have to excel in:

  • Forging Trusted Relationships: Between Management, Providers and Patients
  • Building Networked Business Models: Connecting value-exchanging entities
  • Realizing Sustainable Economies of Scale: On both a discrete and networked basis
  • Focusing on Core Competencies: Borrowing skills and assets where required

To perform well, a healthcare organization needs,

1. Strong Management

2. Healthcare Information Technology

3. Employee Satisfaction and Retention

4. Patient Satisfaction

5. Quality Improvement

6. Training

7. Data Tracking

Q: How can changes be made?    

 A:  BY INNOVATION

Innovation of Management tools

1. Setting Goals

2. Value of Organizational Behavior

3. Develop workable business and IT infrastructure models.

4. Extending the patient-physician interaction beyond the office visit using telemedicine tools, as well as using health information exchange (HIE) to aggregate data from multiple sources.

5. Meaningful Use Guidelines:

  • Patients View, Download and Transmit Their Health Information
  • HIE Crossing Vendor and Organizational Boundaries
  • Secure Electronic Messaging
  • Summary of Care Documents
  • eMAR
  • Medication Reconciliation
  • CPOE
  •  Clinical Quality Measures

6. Applying Lean and Six sigma to current Management and workforce.

7. TELE-HEALTH: Being able to communicate using IT tools to help patients stay healthy and get rewarded well.

8. Transparency: Everyone should know what is happening in the organization.

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Economic Costs Related to Overweight and Obesity

In Health, Healthcare, Medicine on September 14, 2012 at 8:00 am

As the prevalence of overweight and obesity has increased in the United States, so have related health care costs. The statistics presented below represent the economic cost of obesity in the United States in 2006, updated to 2008 dollars.

 

Q: What is the cost of obesity?

A: On average, people who are considered obese pay $1,429 (42 percent) more in health care costs than normal-weight individuals.

What is the cost of obesity by insurance status?

A: For each obese beneficiary:

  • Medicare pays $1,723 more than it pays for normal-weight beneficiaries.
  • Medicaid pays $1,021 more than it pays for normal-weight beneficiaries.
  • Private insurers pay $1,140 more than they pay for normal-weight beneficiaries.

What is the cost of obesity by the type of service provided?

A: For each obese patient:

  • Medicare pays $95 more for an inpatient service, $693 more for a non-inpatient service, and $608 more for prescription drugs in comparison with normal-weight patients.
  • Medicaid pays $213 more for an inpatient service,$175 more for a non-inpatient service, and $230 more for prescription drugs in comparison with normal-weight patients.
  • Private insurers pay $443 more for an inpatient service, $398 more for a non-inpatient service, and $284 more for prescription drugs in comparison with normal-weight patients.

 

Healthcare in US: When is it going to be Cost Effective?

In Health, Healthcare, Medicine on May 20, 2012 at 11:04 pm

It is important as a healthcare consumer to understand the history of the healthcare delivery system, how it operates today, who participates in the system, what legal and ethical issues arise as a result of the system, and what problems continue to plague the healthcare system.  We are all consumers of healthcare.  Yet, in many instances, we are ignorant of what we are actually purchasing.  If we were going to spend $1000 on an appliance or flat screen television, many of us would research the product to determine if what we are purchasing is the best product for us.  The same state should be applied to purchasing healthcare services.

As the United States resumes debate over options for achieving universal health coverage, policymakers are once again examining insurance systems in other industrialized countries. More recent attention has focused on countries that combine universal coverage with private insurance and regulated market competition.

A Basic Screenshot of what US healthcare is Comprised of

Medicare: Medicare is a social insurance program for the elderly, some of the disabled under age 65, and those with end-stage renal disease. Administered by the federal government, the program is financed through a combination of payroll taxes, premiums, and federal general revenues.

Medicaid: Medicaid is a joint federal-state health insurance program covering certain groups of the poor. Medicaid is administered by the states, which operate within broad federal guidelines. States receive matching funds from the federal government, varying among states from 50 percent to 76 percent of their Medicaid expenditures.

Private insurance: More than 1,200 not-for-profit and for-profit health insurance companies provide private insurance. They are regulated by state insurance commissioners. Private health insurance can be purchased by individuals, or it can be funded by voluntary premium contributions shared by employers and employees on an employer-specific basis, sometimes varying by type of employee. Employer coverage is the predominant form of health insurance coverage. Some individuals are covered by both public and private insurance.

Out-of-pocket spending: Out-of-pocket payments, including both cost-sharing insurance arrangements and expenditure paid directly by private households, accounted for 12 percent of total national health expenditures in 2007, which amounted to US$890 per capita.

Based on the fragmented development of US health care, the system is based on individualism and self-determination and focusing on the individual rather than collectivistic needs of the population. For example, there are over 20 million citizens who have type 2 diabetes, a chronic and serious disease that impacts how your body breaks down food to obtain energy. This chronic disease has severe complications if not treated appropriately. Unless something is done to prevent this insidious disease, there will be 35 million heart attacks, 13 million strokes, 8 million instances of blindness, 2 million amputations, and 62 million deaths over the next 30 years.

Both private and public participants in the US health delivery system need to increase their collaboration to reduce these disease rates. Leaders need to continue to assess our healthcare system using the Iron Triangle to ensure there is a balance between access, cost, and quality.

Although the Health Care Reform intends to take away the flaws the current system is infested with, the journey is going to be long and tough. But it will  definitely lead to a better outcome as compared to current situation.

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