Purpose: Comment on the Discussion
Thing to Remember:
- Answer this discussion with opinions/ideas creatively and clearly. Supports post using several outside, peer-reviewed sources.
- 1 References, find resources that are 5 years or less
- No errors with APA format 6 Edition
To Comment:
Topic 1: Third-party Payment
Third-Party Payments Distort the Market
Third-party payment systems are what we commonly refer to as the insurance of today’s society. This term has a specific and precise meaning. Insurance coverage in which a company (third party), pays a provider (second party), to deliver the health care services to the patient (first party) (Scandlen, 2012). This system did not exist until the 1930’s and was created by hospitals due to the Depression of this era, commonly known today as BlueCross (Scandlen, 2012).
Third-party payments distort the market in many ways. With any insurance, it can only cover what is classified as insurable risks, this includes three factors, first being the chances of loss are small; secondly, the magnitude of the loss is devastating financially; lastly, when the risks are spread across a large group, premiums are affordable (Buff, Terrell, 2014). With these three sections identified, most insurances no longer fall into this category and are now required to cover predictable expenses for minor care as outlined by the Patient Protection and Affordable Care Act (PPACA).
Use of Third-Party Intermediaries for Health Care
With the use of these third-party payer systems, consumers are immune to the costs of the health care which is being provided. Most of us go to the doctors or to the hospital for a procedure and we just pay our deductible and go about our day. Do we really need that test or know what it is going to cost? Most hospitals have a chargemaster that is an itemized list of services (Arora, Moriates, Shah, 2015). This list is usually set at a much higher rate than the services actually cost. This practice allows for hospitals to negotiate with the large third-party payers to come to a settlement on the cost, this often offsets the price of the underinsured or noninsured (Arora, Moriates, Shah, 2015).
Doctors and patients do not know what is really paid or what a service will cost because of these negotiations that occur, and it varies from patient to patient, dependent on their coverage (Arora, Moriates, Shah, 2015). There is a national movement for price transparency and charges easily accessible to be seen by all (Arora, Moriates, Shah, 2015).
Elderly Citizens Separate Payment Program
It is estimated that 95% of all persons over the age of 65 is covered by the government health care insurance known as Medicare (Gilford, 1988). This program was designed to explicitly cover major costs associated with acute illness and chronic illness, to the extent of long-term care (Gilford, 1988). This program is attached to the Social Security system and has three parts, A for hospitalization, B for medical insurance, C is a privately purchased supplement, and D for prescriptions (Smith, 2015). There is no eligibility requirement for Medicare, only age, and disability (Smith, 2015).
References
Arora, V., Moriates, C., & Shah, N. (2015, November). The Challenge of Understanding Health Care Costs and Charges. Retrieved from AMA Journal of Ethics: http://journalofethics.ama-assn.org/2015/11/stas1-1511.html
Buff, M., & Terrell, T. (2014). The Role of Third-Party Payers in Medical Cost Increases. Journal of American Physicians and Surgeons , 19(2), 75-79. Retrieved from Journal of American Physicians and Surgeons : http://www.jpands.org/vol19no3/buff.pdf
Scandlen, G. (2012). Myth Buster #20: Third-Party Payment. Retrieved from National Center for Policy Analysis: http://healthblog.ncpa.org/myth-buster-20-third-party-payment/#sthash.4zdGvIj3.dpbs
Smith, L. (2015). What’s The Difference Between Medicare And Medicaid? Retrieved from Investopedia: http://www.investopedia.com/articles/pf/07/medicare-vs-medicaid.asp