Employer health coverage cost control essay

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Medicare is the second largest health care payer in America, trailing only Medicaid. The program is very popular with its enrollees, with polls showing a higher level of satisfaction than with private insurance.

Medicare is less popular with hospitals. They report that evidence suggests that overall Medicare pays hospitals less than what it costs them to provide care.

Data collected by hospital groups and the insurance industry suggests that this is unlikely to happen. However, this is global data. Examine the payments to individual hospitals in more detail, and you discover that many hospitals actually make a profit on most Medicare patients.

In the remaining hospitals, most Medicare patients are profitable. Losses on Medicare patients are related to a minority of patients who need much more care than average because of longer stays, more complications, and underlying health problems. Since the profits on most Medicare patients are small, large losses on this small number of outliers can drive overall payments below costs.

In looking at any data on payments, it is very important to distinguish between Medicare and Medicaid. Payments by Medicaid — the government plan for the poor—are significantly lower.

Those who oppose any government plan often lump Medicaid and Medicare reimbursements together to argue that Medicare grossly underpays providers.

Employer Health Coverage: Cost Control

There is no question that Medicaid needs significant revision. The House health care bill takes a step in that direction by mandating that Medicaid reimbursement for primary care must be raised to equal Medicare payments, and by providing direct funding to cover that raise and to cover new patients enrolled as a result of reform.

However, it is true that while many hospitals actually make an overall profit on Medicare patients, at the other end of the spectrum some hospitals lose more than average. Regional Variations in Payments One reason for some disparities is that Medicare payments to hospitals are not uniform throughout the country.

In some areas, Medicare pays far more than in other areas. The differences can be quite large, with the highest paid hospitals collecting twice as much as the lowest paid. In some cases, this variation contributes to losses and has led to political controversy.

As usual, this is more complicated than partisans would like us to think. Many rural hospitals in Blue Dog districts actually enjoy better than average Medicare margins, partly because of special adjustments to payments specifically for rural hospitals.

However, that resulted in larger costs than anticipated, and when Nixon became president, Medicare switched to a new system, paying hospitals based on what it cost them to treat patients.

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The system was designed to inject rational behavior into the process of hospital growth, and to prevent costly duplication of services. The CON system quickly created a cottage industry of experts able to guide CON applications to approval, often by getting politicians to intervene.

Then as now, in some hospitals patients stayed longer and underwent more aggressive and more intensive care. These hospitals were rewarded with the highest reimbursements.The September/October issue previews state legislative elections and what voters will face on statewide ballot measures.

Also read about efforts to halt sexual harassment in . Glossary of Insurance Terms. This page provides a glossary of insurance terms and definitions that are commonly used in the insurance business.

New terms will be added to the glossary over time. The small businesses characteristics, including whether a small firm is a component of a larger business, the composition of its workforce, and the industry of which it is a part, are the most important factors in determining an employer's ability to acquire affordable health coverage for its employees.

Rising Health Care Costs for Small Employers One of the biggest problems small employers face today is the steadily rising costs of health coverage for its employees.

Employers are looking to provide insurance that is cost effective for the employer. Choosing what type of insurance to provide can have different effects on the profitability of the employer. Here is a comparison of the cost effectiveness of employer-sponsored health care and self-funded health plans.

- Managed Health Care Managed health care is a system used to control costs, quality of and access to health care services, as well as the delivery of health care services to it’s members. Managed health care started in the ’s in response to rising health care costs and new, advancing technology and equipment, which costs more to operate.