HeathCare Delivery System


How Health Care is Financed

Health care financing involves two streams of money: the collection of money for health care (money going in) and reimbursement of health care providers for health care (money going out). The United States is a multipayer system: its "payers" include both

Centers for Medicare and Medicaid, 2014

The government estimates that an aging population, improving economy, and the health care overhaul will push spending on medical services to almost 20% of the U.S. gross domestic product by 2021

single-payer system

Many believe that the solution to rising U.S. health care costs is a single-payer system. That is, have one entity such as a government run the organization, collect all health care fees, and pay out all health care costs. In the current U.S. free market

The Physicians for a National Health Program (PNHP

promote a single-payer system in which all hospitals, doctors, and other health care providers would bill one entity for their services. "This alone would reduce administrative waste greatly and save money, which could be used to provide care and insuranc

How the U.S. Health Care Dollar Is Spent

Hospital care and health care provider/clinical services together account for 51% of the nation's health care expenditures.


Prospective payment system: Diagnosis-Related Groups (DRGs) and Resource Utilization Groups (RUGs)


Capitation gives providers a fixed amount per enrollee of health plan.
In managed care, the provider or system receives a capitated payment for each patient enrolled in the program and assumes financial risk.

Bundled payments

Provider receives a fixed sum of money to provide a range of services.

Rate setting

Government could set targets or caps for spending on health care services.
Government could establish prices for services or even payment approaches that public and private payers would use.

Comparative effectiveness analysis

Explicitly assess and weigh the benefits and costs of new technologies, and make decisions about whether a medical benefit is worth the cost and whether it should be covered by a public or private insurance program.

Increasing patient cost sharing

This leads to higher deductibles.

Utilizing quality improvement tools (such as Lean Six Sigma, PDSA, etc.) to reduce waste and improve safety

These efforts link interventions to valued outcomes.

Improving transitions across settings (to decrease 30-day readmissions)

Make sure that all vital information essential to care coordination gets transferred with the patient.

Making the delivery of medical services more efficient and less costly

October 1, 2014, is the compliance date for use of new codes that classify diseases and health problems; estimated to save $6 billion over 10 years. These code sets, known as the International Classification of Diseases, 10th Edition diagnosis and procedu

Eliminating unnecessary costs such as those resulting from fraud and abuse

For too long, measures to identify and address fraud and abuse have been inadequate, which have greatly contributed to rising health care costs.

Improving population health

These efforts change the focus from individual patients to targeted populations.