An Analysis of Applied Scenarios Related to Healthcare Finance

Medicare, the United States’ national public health insurance plan, is divided into four parts, including Part A, or hospital insurance; Part B, or medical insurance; Part C, or Medicare Advantage plans; and Part D, or prescription drug plans (Nau, 2011). All Medicare enrollees are guaranteed coverage in these areas, while consumers are given a choice between a traditional Medicare model to cover Parts A and B, or an Advantage plan, in which they are reimbursed for receiving private coverage (Nau, 2011). Mrs. Zwick is enrolled in the traditional Medicare model which includes Parts A, B and D. As Part A covers hospital inpatient stays, Mrs. Zwick’s stay is covered by Medicare (Nau, 2011).

Part A covers hospital insurance, including skilled nursing facilities, is the patient meets predetermined criteria. These criteria include a minimum of three nights at the facility, the condition must be diagnosed while the patient remains in the hospitals, the patient is receiving either rehabilitative care or another condition requiring supervision, and the care requires treatment from a skilled professional (Nau, 2011). Additionally, Part A fully covers up to 20 days in a skilled care facility, and 80 percent of all subsequent days up to 100 (Nau, 2011). Therefore, Mrs. Zwick would be required to pay for 20 percent of the remaining 20 days of her inpatient visit.

Medicare Part B covers medical insurance expenses and provides additional coverage for services not provided in Part A. These include testing, vaccinations, and treatments for advanced illnesses (Nau, 2011). Depending on Ms. Zwick’s employment and marital situation, her walker would likely be covered by Part B and potentially her extended stay at the facility. Medicare Part B is also responsible for costs associated with end-of-life care that are not covered by part A (Riley & Lubitz, 2010).

Medicare Part D covers prescription drugs. Mrs. Zwick’s antibiotics would be either fully or partially covered by Medicare Part D, depending on her premium, tax status and deductible (Nau, 2011). If Mrs. Zwick is enrolled in a prescription drug plan or advantage plan that contains drug coverage, her medications would be covered by Part D. Though Part D coverage is not standardized, nearly all insurance plans cover antibiotics (Nau, 2011). 

Medicare policies could potentially affect reimbursement for the additional care Mrs. Zwick needed when she developed a hospital-acquired infection in a variety of ways. Additionally, certain ethical implications exist regarding Mrs. Zwick’s incurring the costs related to her hospital-acquired condition. Unfortunately, no one understood that Mrs. Zwick’s infection did not exist prior to her hospital visit and she was given the financial burden. As mentioned above, Medicare policy for reimbursing patients for skilled nursing facility visits allows for 20 days of full coverage, and up to 80 more days requiring a co-payment. Based on the information provided in the current scenario, Mrs. Zwick would be required to pay for 20 additional days in the facility. Had the nurses known Mrs. Zwick acquired the urinary tract infection during her visit, the hospital would have been obligated to pay the additional fees (Riley & Lubitz, 2010). Medicare policy mandates that no additional payment is granted to hospitals due to infections acquired during the visit (Riley & Lubitz, 2010). The ethical implications of Mrs. Zwick being given the bill are considerable, as this is an obvious breach of Medicare’s policy. The responsibility, however, lies in the hands of the nursing staff that did not carefully evaluate Mrs. Zwick upon arrival. 

The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 was a seminal piece of legislation passed mandating that employers maintain insurance programs that continue to ensure employees following termination or retirement (Truffer et al., 2010). This act has had a profound effect on the U.S. healthcare system and has been subject to numerous provisions in its history to best meet the insurance needs of employees. Fortunately for Mr. Davis, COBRA covers employees for up to 18 months following termination of employment (Truffer et al., 2010). During this time, Mr. Davis is encouraged to find other employment or additional means of covering healthcare needs. As Mr. Davis’ illness classifies as a qualifying event for continuing coverage, and his former employer had well over 20 employees, Mr. Davis is likely covered by COBRA. 

State and local governments face challenges in providing care for patients like Mr. Davis, who have terminal illnesses but cannot afford care. First, the cost of treating terminally ill patients is substantially higher than healthy individuals (Truffer et al., 2010). The additional costs of medications, testing and laboratory work, and elaborate procedures place a significant financial burden on these governments (Truffer et al., 2010). 

An additional challenge is that these high costs force government-regulated health insurance companies to raise premiums, making healthcare unaffordable. This ultimately hurts the government, as a greater demand is placed on public healthcare (Nau, 2011). One step these governments could take to alleviate these problems is to consider ways to increase competition among HMOs to lower customer prices (Truffer et al., 2010). This would force providers to adjust costs to meet buyers’ capabilities and maintain a degree of equitability in the healthcare system.

Mr. Davis would be better off in a universal healthcare model, such as that of Switzerland or Germany. Such a healthcare model necessitates that citizens purchase a basic health insurance plan, while federal health insurance covers the costs of medical treatment and hospital visits for all insured individuals (Riley & Lubitz, 2010). Great Britain maintains a similar policy, in which the majority of healthcare expenses are publicly funded, and patients have the option of purchasing additional private insurance. The National Health Service (NHS) covers more than 90 percent of hospital in-patient visits, and this system consistently receives among the highest patient satisfaction ratings in the world (Riley & Lubitz, 2010).

Furthermore, federal health insurance covers all chronic and terminal illness conditions in a universal healthcare model (Riley & Lubitz, 2010). This includes access to coverage for unemployed individuals, medications, and pre-existing medical conditions. Costs would be significantly less in Japan, as well. In this system, the government covers 70 percent of all healthcare costs, while patients are responsible for the remaining portion (Riley & Lubtiz, 2010). The fact that employers can contribute to the patient’s portion, the freedom to choose physicians, and the government-set healthcare fees would contribute to a more ideal situation for Mr. Davis.

References

Nau, D. P. (2011). Intersection of quality metrics and Medicare policy. The Annals of Pharmacotherapy, 45(12), 1582-1584.

Riley, G. F., & Lubitz, J. D. (2010). Long-term trends in Medicare payments in the last year of life. Health Services Research, 45(2), 565-576.

Truffer, C. J., Keehan, S., Smith, S., Cylus, J., Sisko, A. Poisal, J. A., Lizonitz, J.,… (2010). 

Health spending projections through 2019: The recession’s impact continues. Health Affairs, 29, 1-10.