Contrast approval/payment from the ?(PPACA), commercial insurance, and the traditional Medicare program (not a Medicare health maintenance organization [HMO]) available

Response 1

Hospitals, outpatient centers, and freestanding surgical center operations are significantly influenced by their funding sources. The Patient Protection and Affordable Care Act (PPACA), commercial insurance, and traditional Medicare each have unique approval and payment processes, resulting in diverse impacts on these healthcare facilities.

The PPACA, also known as Obamacare, introduced significant changes to the healthcare system, including expanding Medicaid coverage and creating online marketplaces for health insurance. The PPACA has expanded access to insurance coverage for most people and, therefore, probably increased patient volumes, translating to more revenues for healthcare facilities (Neiman et al.,2021). However, the act also introduced some mechanisms of cost containment, such as value-based purchasing and readmission penalties that affect the rate of reimbursement to facilities and make them improve quality and efficiency.

Commercial insurance plans, offered by private insurance companies, typically have their own negotiated reimbursement rates with healthcare facilities. Such rates can vary considerably because of the facility's market power, the insurance company's bargaining power, and the specific nature of the dispensed services. Commercial insurance plans may differ in insurance policy coverage, deductibles, and co-payment rates, which ultimately influence the patient's pocket costs and, therefore, the facility's revenue (Hughes et al., 2022).

The federal government's traditional Medicare program covers individuals aged 65 and older or those with specific disabilities. Medicare is widely known to have an extremely structured reimbursement system based on diagnostic-related groups for inpatient services and the fee schedule for those seeking the patient's services. While Medicare reimbursement rates are generally lower than commercial insurance rates, they provide a predictable and stable revenue stream for healthcare facilities (Crowley et al., 2020).

The different funding types can significantly impact the strategic management of healthcare facilities. Facilities with a higher proportion of commercially insured patients may have more financial flexibility but face greater negotiation challenges with insurance companies. Those with a larger Medicare population may have more stable revenue but potentially lower reimbursement rates (Aggarwal et al.,2022). Additionally, facilities must consider the implications of the PPACA's cost-containment measures and quality incentives, which may necessitate strategic investments in infrastructure, technology, and care coordination.

Effective strategic management involves understanding the complex interplay of these funding sources, anticipating regulatory changes, and adapting to the evolving healthcare landscape. Facilities must carefully analyze their payer mix, negotiate favorable contracts, optimize their revenue cycle management, and continuously strive for operational efficiency and quality improvement to remain financially viable and competitive.

References

Aggarwal, R., Yeh, R. W., Dahabreh, I. J., Robertson, S. E., & Wadhera, R. K. (2022). Medicare eligibility and healthcare access, affordability, and financial strain for low-and higher-income adults in the United States: A regression discontinuity analysis.  PLoS Medicine,  19(10), e1004083.

Crowley, R., Daniel, H., Cooney, T. G., Engel, L. S., & Health and Public Policy Committee of the American College of Physicians*. (2020). Envisioning a better US health care system for all: coverage and cost of care.  Annals of internal medicine,  172(2_Supplement), S7-S32.

Hughes, S., Gee, E., & Rapfogel, N. (2022, November 29).  Health Insurance Costs Are Squeezing Workers and Employers. Center for American Progress.  https://www.americanprogress.org/article/health-insurance-costs-are-squeezing-workers-and-employers/

Neiman, P. U., Tsai, T. C., Bergmark, R. W., Ibrahim, A., Nathan, H., & Scott, J. W. (2021). The Affordable Care Act at 10 Years: evaluating the evidence and navigating an uncertain future.  Journal of Surgical Research,  263, 102-109.

Response 2

The Patient Protection and Affordable Care Act (PPACA) was a milestone in American public health strategy. The Act establishes fundamental legal protections and an almost universal guarantee of access to affordable health insurance coverage.  As a result of a series of extensions and revisions to the various laws collectively make up the federal legal framework for the U.S. healthcare system. (Rosenbaum, 2011) The first and central aim is to achieve near-universal coverage and to do so through shared responsibility among government, individuals, and employers. The second aim is to improve fairness, quality, and affordability of health insurance coverage. The third aim is to improve healthcare value, quality, and efficiency while reducing wasteful spending and making the healthcare system more accountable to a diverse patient population. (Rosenbaum, 2011) The fourth aim is to strengthen primary healthcare access while bringing about longer-term changes in the availability of primary and preventive healthcare. The fifth and final aim is to make strategic investments in the public's health, through both an expansion of clinical preventive care and community investments. (Rosenbaum, 2011)

Furthermore, PPACA has guided many payment reform models that require providers to be financially responsible for the cost and quality of care for a defined population. Medicare and the commercial sector all have adopted various forms of ACOs. (Obama, 2016) The PPACA introduced payment reform models that require providers to be financially responsible for the cost and quality of care for a defined population. This model, known as Accountable Care Organizations (ACOs), has significantly changed the operations and structure of the healthcare industry. (Obama, 2016) Health managers must reassess and implement new strategies to adapt to this new model. The impact on strategic management is significant as it requires hiring more physicians to deal with the demand and still provide quality care. It also necessitates the development of competencies that will allow them to serve more patients. (Obama, 2016)

The ACO model of care has significantly changed the operations and structure of today's healthcare industry. Health managers must reassess and implement new strategies to adapt to this new model. Increasing patients would require hiring more physicians to handle the demand and still provide quality care. (CMS, n.d.)  Furthermore, hospital administrators who have come to depend heavily on the current fee structure for acute care services will have to simultaneously manage the search for savings in the inpatient setting and develop competencies that will allow them to serve more patients. (CMS, n.d.)

Moreover, it encourages businesses to provide healthcare coverage and mandates those that are not covered who are not covered by their employer or a government-sponsored program such as Medicare or Medicaid to purchase individual private healthcare coverage. Furthermore, the Patient Protection and Affordable Care Act (PPACA) mandates the creation of government-directed medical coverage exchanges, which are standardized healthcare plans regulated and sold by private insurance companies. (Obama, 2016)

Types of Insurances

Commercial insurance providers offer health plans through Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO) structures. Other types include point-of-service plans, exclusive provider plans, and fee-for-service plans. (Green, 2024)  Healthcare providers are paid according to the established fee schedule or their actual charge. The strategic management of the facility under this funding type would involve negotiating contracts with these insurance providers and ensuring that the services provided align with the fee schedules. (Green, 2024)  In addition, commercial business insurance is protection for companies and organizations. It was created to protect the company, its owners, and its employees. Commercial insurance can come in a wide variety of forms, sizes, and hues. As a result, there are so many various kinds of companies, each with unique requirements and circumstances. (Green, 2024)  Businesses can be protected from hazards that could have an impact on their success with the aid of commercial insurance. Business insurance can defend the financial components of an enterprise while protecting its reputation and general health. (Green, 2024)

Traditional Medicare is the is a fee-for-service program managed by the federal government. (MI, n.d.) The patient’s medical treatments are covered in full by the government under Original Medicare. Anywhere in the nation, the patient can visit any physician and hospital that accepts Medicare. Traditional Medicare is divided into four parts: Parts A, B, C, and D. Hospital and inpatient coverage is offered through Part A. The outpatient/medical coverage is provided by Part B. A different method of receiving your Medicare benefits is provided under Part C. and the Prescription drugs are covered by Part D. (MI, n.d.)

    In addition, the healthcare providers are paid based on the number of services provided. The strategic management of the facility under this funding type would involve ensuring that the services provided are billable under the Medicare program and that the facility can provide a high volume of these services to ensure sufficient revenue. (MI, n.d.)  In summary, each funding type has a different impact on the strategic management of the facility. PPACA requires a focus on quality and cost-effectiveness, commercial insurance requires negotiation and alignment with fee schedules, and traditional Medicare requires a focus on volume and billable services. (NCOM, 2021)

References

CMS. (n.d.). Accountable Care and Accountable Care Organizations. Retrieved from CMS.gov:  https://www.cms.gov/priorities/innovation/key-concepts/accountable-care-and-accountable-care-organizations

Green, L. (2024, April 30). What Is Commercial Health Insurance? Retrieved from Investopedia:  https://www.investopedia.com/terms/c/commercial-health-insurance.asp

MI. (n.d.). The parts of Medicare (A, B, C, D). Retrieved from Medicare Interactive:  https://www.medicareinteractive.org/get-answers/medicare-basics/medicare-coverage-overview/original-medicare

Rosenbaum S. The Patient Protection and Affordable Care Act: implications for public health policy and practice. Public Health Rep. 2011 Jan-Feb;126(1):130-5. doi: 10.1177/003335491112600118. PMID: 21337939; PMCID: PMC3001814.

Obama B. United States Health Care Reform: Progress to Date and Next Steps. JAMA. 2016 Aug 2;316(5):525-32. doi: 10.1001/jama.2016.9797. PMID: 27400401; PMCID: PMC5069435.

 National Academies of Sciences, Engineering, and Medicine; National Academy of Medicine; Committee on the Future of Nursing 2020–2030; Flaubert JL, Le Menestrel S, Williams DR, et al., editors. The Future of Nursing 2020-2030: Charting a Path to Achieve Health  

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