Cost Shifting

571 Words2 Pages
bulb-icon

Recommended: Healthcare reimbursement quizlet

Cost Shifting According to the Delivering Health Care in America, cost shifting is a method used by insurance companies to balance inadequate payments, mostly to bridge the gap from low government reimbursement (Shi & Singh, 2015). Cost shifting is when private insurance companies charge people more to make up for the money they lose. Hospitals and other health care providers are able to compensated for the services they provide for uninsured patients by increasing payments to private insurance (Coughlin, Holahal, caswell& McGrath, 2014). Government programs such as, Medicare and Medicaid reimburse hospitals at a very low rate, according to Potter (2015) the only way hospitals can be able to keep providing care and make up for their looses …show more content…

According to an article called “How Much Do Hospitals Cost Shift”, hospitals have not been charging private insurances more to make up for their loss (potter, 2015). The study suggests that the reason is because consumers have other surrounding hospitals to choose from which will force hospitals to balance their expenses in other ways without disrupting patient flow. Frank (2015) mentions a study done by Health Affairs in 2013, which states that hospitals do not charge private insurance companies more because they received less money from the government. If there is a hospital in an area without any other competition, they tend to increase prices on private insurance providers (Potter, 2015). Cost shifting is a system used by hospitals to make up for there looses depending on how convenient it is. If more competition exists in the marketplace the less likely cost shifting will occur since patients will have a range of possible options. For example, a patient is most likely to choose a cheaper clinic if he/she lives in an area where there are affordable

Show More
Related

  • Joint Commission Swot Analysis

    88 Words  | 1 Pages

    Bigger hospitals increasing market share Loss of Medicaid and Medicare reimbursement Decline in revenue Loss of patients

    Read More

  • Implementation Of Orchid Leadership Rounding Tool

    1111 Words  | 3 Pages

    With the passage of the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) has initiated reimbursement based off of patient satisfaction scores (Murphy, 2014). In fact, “CMS plans to base 30% of hospitals ' scores under the value-based purchasing initiative on patient responses to the Hospital Consumer Assessment of Healthcare Providers and Systems survey, or HCAHPS, which measures patient satisfaction” (Daly, 2011, p. 30). Consequently, a hospital’s HCAHPS score could influence 1% of a Medicare’s hospital reimbursement, which could cost between $500,000 and $850,000, depending on the organization (Murphy, 2014).

    Read More

  • Managed Health Care Issues

    3218 Words  | 7 Pages

    When one examines managed health care and the hospitals that provide the care, a degree of variation is found in the treatment and care of their patients. This variation can be between hospitals or even between physicians within a health care network. For managed care companies the variation may be beneficial. This may provide them with opportunities to save money when it comes to paying for their policy holder’s care, however this large variation may also be detrimental to the insurance company. This would fall into the category of management of utilization, if hospitals and managed care organizations can control treatment utilization, they can control premium costs for both themselves and their customers (Rodwin 1996). If health care organizations can implement prevention as a way to warrant good health with their consumers, insurance companies can also illuminate unnecessary health care. These are just a few examples of how the health care industry can help benefit their patients, but that does not mean every issue involving physician over utilization or quality of care is erased because there is a management mechanism set in place.

    Read More

  • Uninsured Health Care Essay

    1401 Words  | 3 Pages

    In order to fully understand the uninsured and underinsured problem that hospital administrators face the cause must be examined. The health outcomes of uninsured individuals are generally worse than those who are insured. Uninsured persons are more likely to experience avoidable hospitalizations, diagnosed at later stages of disease, hospitalized on an emergency or urgent basis, and more seriously ill upon hospitalization (Simpson, 2002) Because the uninsured often lack an ongoing relationship with a health-care provider, they are less likely to receive preventive care and diagnostic tests (Kemper, 2002). Many corporations balance their budget through cost cuts and other moves, but have been slammed with an increasing load of uninsured patients, coupled with reduced payments from government and private insurance programs. In 2000, 564,476 uninsured patients came through Health and Hospitals Corporations health care centers, a 30 percent increase from 1996. In the same period, Congress reduced Medicare reimbursements to hospitals, while Medicaid reimbursements to primary care clinics remained basicall...

    Read More

  • Pros And Cons Of Value Based Health Care

    887 Words  | 2 Pages

    The current health care reimbursement system in the United State is not cost effective, and politicians, along with insurance companies, are searching for a new reimbursement model. A new health care arrangement, value based health care, seems to be gaining momentum with help from the biggest piece of health care legislation within the last decade; the Affordable Care Act is pushing the health care system to adopt this arrangement. However, the community of health care providers is attempting to slow the momentum of the value based health care, because they wish to maintain their autonomy under the current fee-for-service reimbursement system (FFS).

    Read More

  • Health Care Costs For The United States

    767 Words  | 2 Pages

    In order to make ones’ health care coverage more affordable, the nation needs to address the continually increasing medical care costs. Approximately more than one-sixth of the United States economy is devoted to health care spending, such as: soaring prices for medical services, costly prescription drugs, newly advanced medical technology, and even unhealthy lifestyles. Our system is spending approximately $2.7 trillion annually on health care. According to experts, it is estimated that approximately 20%-30% of that spending (approx. $800 billion a year) appears to go towards wasteful, redundant, or even inefficient care.

    Read More

  • Problems With the U.S. Healthcare System

    1646 Words  | 4 Pages

    The U.S. expends far more on healthcare than any other country in the world, yet we get fewer benefits, less than ideal health outcomes, and a lot of dissatisfaction manifested by unequal access, the significant numbers of uninsured and underinsured Americans, uneven quality, and unconstrained wastes. The financing of healthcare is also complicated, as there is no single payer system and payment schemes vary across payors and providers.

    Read More

  • The Universal Healthcare System

    698 Words  | 2 Pages

    In sum, America needs to reevaluate the status quo surrounding medical care. It is becoming increasingly apparent that the current model only benefits a select few and causes insufferable costs for the rest of the world. If there is no reform for these issues, money will continue to be siphoned directly into the pockets of large, for-profit companies that benefit from the strife of

    Read More

  • The Rising Cost of Health Care

    563 Words  | 2 Pages

    Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel.

    Read More

  • Impact Of Managed Care

    3219 Words  | 7 Pages

    The public, the media and the politicians turned against managed care and the end of the 1990’s was characterized by managed care backlash. Managed care was accused of paying little attention to patients in order to save costs for the institutions. As a result, the cost containment activities of such institutions were greatly limited by the states. Although we do not know the exact effect of managed care institutions on health care quality and prices, it is not considered a possible solution for rising health care spending. To fill this gap, I collected the most important theoretical and empirical investigations on the impact of managed care.

    Read More

  • Obamacare: The Healthcare Controversy

    629 Words  | 2 Pages

    The price you pay for the same procedure, at the same hospital, may vary enormously depending on what kind of health insurance you have in the US. That's because of bargaining power. He talks about how government programs, like Medicare and Medicaid, can ask for a lower price from health service providers because they have the numbers: the hospital has to comply or else risk losing the business of millions of Americans. Greene also mentions that there are dozens of private health insurance providers in the United States and they each need to bargain for prices with hospitals and doctors. The numbers of people private insurances represent are much less than the government programs. That means a higher price when you go to the doctor or fill a prescription. Uninsured individuals have the least bargaining power. Without any insurance, you will pay the highest price. Lastly, John discusses the complicated reasons why the United States spends so much more on health care than any other country in the world, and along the way reveals some surprising information, including that Americans spend more of their tax dollars on public health care than

    Read More

  • Universal Healthcare In America

    885 Words  | 2 Pages

    Generally around one fourth of the healthcare costs in America goes towards administrative costs (Watson). This cost is generally attributed to the fact that hospitals essentially have to barter with insurance companies to get money for the medical service they provide. The cost of these hospitals having to deal with insurance companies are

    Read More

  • BASF Transfer Price Management

    1008 Words  | 3 Pages

    In BASF Group, Business Units are responsible for profit and for return on investment (profit centers), each reporting to an Operating Division. Products within a company of BASF Group that are supplied from one profit center to another for further processing or for sale (i.e. they leave the boundaries of the particular Business Unit or Operating Division) should as a basic rule be charged within the arm’s length principle establishing the downstream unit as a privileged partner. These supplies are therefore charged at transfer prices. Long-term effects of transfer price agreements on business developments and the strategy of upstream and downstream profit centers are taken into account in transfer pricing. BASF’s ZZ clearing desk is responsible for resolving transfer price definition and calculation disputes. As per clearing desk step wise process for calculation of transfer price is defined, which will be used for calculation of transfer pricing. The process cannot be mentioned in this thesis because of confidentiality reasons, and only a general review of approach will be explained.

    Read More

  • Health Care Reflection Paper

    1336 Words  | 3 Pages

    Some economists suggest that the market for healthcare is different from other competitive industries and therefore cannot act the same way. In principles, we learn the basic assumptions of a competitive market, (1) goods offered for sale are homogenous, (2) there must be many buyers and sellers so that each has a negligible impact on the market price and (3) For markets to work efficiently there can be no significant information failure affecting the decisions of the producers and consumers. In perfect competition, product’s must be homogeneous which means that goods that individual producers cannot alter or differentiate to collect a higher price. Health care is a heterogeneous product because the patient can experience a range of outcomes. There is an ongoing battle between hospitals and insurance companies. In theory, insurance companies negotiate with hospitals for a reduced rate. One of my favorites quotes I stumbled upon is from economist Uwe Reinhardt in regards to Obama and Obamacare “I wish I had a half hour with him to explain it to him. If you pit hundreds of little insurers against each other, what makes any one think that each of them has enough market clout to bargain successfully with a hospital? So I don 't think this public health plan, adding yet one more competitor, is going to bring costs down at

    Read More

  • Difference Between Public And Private Hospital

    1172 Words  | 3 Pages

    In healthcare, most people realize there is a difference between public and private sectors. The services provided in a private hospital versus a public hospital are the same the difference is the governance of the facility. The differences between the facilities could be the type of care provided, the insurance plans used, cost, and healthcare providers.

    Read More

More about Cost Shifting

Open Document