Posted June 14, 2016
In the final months of the 2016 presidential elections, the candidates will share their positions on many issues. One of the key topics is the future of America’s health care system. During debates and speeches, the candidates may use many unfamiliar terms, such as three ideas featured in Forbes.
1. Pay-for-value health care – Physicians and hospitals currently are paid for each service and procedure performed. Experts believe this system results in the ordering of unnecessary tests and medications and leads to duplicate services. To counteract this practice, policymakers recommend switching to a pay-for-value or prepaid health care program. Hospitals and physicians would be paid a set fee for services and procedures versus receiving payment for each exam or test. For example, people needing a hip replacement would pay a bundled fee, which would cover all costs for surgery, tests and materials.
Experts believe a prepaid health care approach would encourage health care providers to focus more on prevention and early detection. However, switching reimbursement systems is not easy to accomplish, especially since a prepaid approach requires health care providers to collaborate and coordinate care.
2. Single-payer – Under this system, Americans would receive health care coverage through the federal or state government. Policy experts are discussing whether individuals would purchase insurance only through the government or receive a voucher to shop competing health systems.
The single-payer system would feature a set fee for services and procedures, making it easier for individuals to compare and control health care costs. It also would simplify the reimbursement process.
There are many details about the single-payer plan that must be addressed, such as:
- Who will set prices and determine reimbursement rates?
- What is the government’s role in delivering care?
- How will demand for care be monitored to prevent waiting periods and rationed care?
- Will taxes be increased to cover costs?
3. Medicare for everyone – Currently, qualified individuals with disabilities and adults age 65 and older are insured through the government’s Medicare program. The Centers for Medicare and Medicaid oversees the program, sets reimbursement rates for services and pays health care providers based on a fee schedule. Covered individuals can pick from two plans:
- Fee-for-service – The reimbursement cost for procedures and services is established by Medicare. Patients must see providers who participate in Medicare’s program. Otherwise they will be responsible for paying the costs.
- Medicare Advantage – Health insurance carriers contract with a physician network to provide care for members. Medicare reimburses carriers for costs based on a fee schedule. Expenses beyond the established fee must be covered by the carrier.
Experts have identified several issues with providing Medicare for everyone:
- An increase in the number of individuals in the system could slow down payments to health care providers.
- Under the current plan, Medicare pays out more than it collects through payroll deductions. It’s predicted Medicare will run out of money by 2030. Unless taxes are increased, Americans may receive limited or no coverage. Hospitals may have to subsidize care or turn patients away.
- Due to the influx of patients, doctors and hospitals may decide not to accept Medicare’s rates. Fewer providers may be available to care for patients.