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HCD 303 Global Healthcare Systems Final Exam Study
Guide
Health Care Systems in the U.S. (Arizona State University)
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HCD 303: Global Healthcare Systems
Key Terms:
 System – a set of connected things or parts forming a complex whole
 Quality – How good or bad something is
 Access – A person’s ability to get care or coverage
 Cost – How much money something is
 Universal coverage – All residents have healthcare coverage
 Social Solidarity – the principle that governments have an obligation to ensues that every citizen has access to all
social services including healthcare
 Subsidiarity – the principle belief that matter of government responsibility should be handled at the lowest level
of government that makes operational sense
 General reciprocity – the principle belief in giving to something knowing that you mat not get an immediate
returned benefit
 Centralized – organized at the federal level
 Decentralized – organized at the regional or state level
 Public Health Services/Insurance – public and government ran
 Private Health Services/Insurance – privately ran; Only those who make over $70,000 a year qualify for
insurance; The premium is set by your performance on an individual health assessment (think American
insurance)
 Copayment – the set dollar amount that you must pay at the point of service
 Coinsurance – the set percentage of the bill that must be paid at the point of service
 Deductible – the amount that must be paid out-of-pocket annually be for insurance coverage kicks in
 Sickness funds –
 130 sickness funds in place today (although this number is continually dropping)
 Covers 86% of the country's population
 Membership is mandatory; Must pay a legally mandated premium of 14.6% of their income
(through payroll deduction)
 Split between employer and employee
 Percent of premium is determined by income
 11% of the population opts out of the SHI and opts for Private Health Insurance (PHI)
 Percent of premium is determined by health assessment and is risk-adjusted
 Safety net – children under 18 years of age exempt from all cost-sharing
 Adults:
 Annual cap equal to 2% of household income
 Annual cap lowered to 1% of household income for qualifying chronically ill people
 Unemployed contribute to SHI in proportion to their unemployment entitlements; For
long term unemployed government contributes on their behalf
 Cost-sharing –
 Outpatient Prescriptions: $6.40 - $12.70
 Inpatient Stay: $10.00/day (first 28 days/year)
 Rehabilitation Stay: $10.00/day (first 28 days/year)
 Deductibles: vary by sickness fund plan
 Preventative services do not count towards deductible
 Subsidy – government assistance
 Health financing – the function of a system concerned with mobilization, accumulation, and allocation of funds
to cover the health needs od the people, individually and collectively, in the health system
 Health spending as a % of the GDP – the percent of money spent on healthcare every year in relation to the total
amount spent on all industries in the same year
 Fee-for-service – a payment model where all healthcare services, products, and prescription medications are
unbundled and paid for separately
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o incentive: Overtreatment, Provide more services, testing, and treatments that are billable through an
ICD-code.
 Per Diem – a payment model that reimburses organizations and/or providers based upon the number of days
treatment was given
 Pay-for-performance – a payment model that reimburses healthcare organizations and physicians who achieve,
improve, or exceed their performance on specified quality and cost measures, as well as other benchmarks
o incentive: Measure of performance metrics, Incentives can be financial or non-financial, Adherence to
process
 Salary – a payment model where physicians are paid a predetermined salary based upon their level of expertise
and experience
o incentive: No incentive for overtreatment, Provide the best treatment, regardless of ICD-code to the
patient, There is also no direct incentive to work hard.
 Bundled payments (DRG, EDGR) –
 DRG – a prospective payment model in which hospitals are reimbursed with a fixed fee
regardless of the actual costs. Includes hospital expenses only. ACA required 30-day readmission
penalty
 DRG Incentive – reduce length of stay, Discharge appropriately, Keep costs to a minimum
 EDRG – an EDRG is another form of a bundled payment.
 The bundled payment = hospital + all physician payments + longer period of time (e.g. 6 12 months after hospitalization).
 The EDRG acts as a forcing function – encouraging physician and hospital collaboration
on improving both patient outcomes and cost.
 Reference Pricing – the payment amount now going to medical centers with high quality and low
cost
 Medical centers can charge more than reference price
 Patients told which medical centers charge more than reference price
 If patient chooses higher cost medical centers, patient pays the difference between
reference price and medical center price
 Capitation – a prospective payment model where the hospital or provider is paid a contracted rate per-memberper-month, regardless of the number of services provided; Rates are typically (but not always) risk-adjusted
o Incentive: Keep the patient healthy and living their daily lives in their own home, keep patient out of the
hospital/clinic, freedom to provide non-traditional healthcare services
 Uniform Fee Schedule – the amount of services that each provider can administer within each quarter
Key Concepts:
 Components of a healthcare system – people, parts, inter-relationships, and culture
 US rankings in The Legatum Prosperity Index report, Bloomberg Business report, & Commonwealth Fund report
o Legatum Prosperity Index – 59th
o Bloomberg Business Report – 54th
o Commonwealth Fund – 11th
 Goals of a healthcare system (3)
1. High Quality
2. Low Cost
3. Easy Access
 How do you measure the various goals?
 Life expectancy
 quality of care
 patient outcomes
 patient safety
 patient satisfaction
 cost of care
 access to care
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 How does the US perform on quality, access, and cost? – varies throughout country, overall rankings are
relatively poor though
 How does the US perform on life expectancy – not good, lags behind at 79 years
 Medicare (4 parts, who it covers, when it was established) – signed into law by President Lyndon Johnson on
June 30th, 1965
 Provides health insurance coverage to 3 groups:
 Elderly 65 years and older
 Disabled
 End stage renal disease
 Part A (Part of the Original Medicare Bill)
 Inpatient Hospital Care
 Inpatient stays at skilled nursing facilities
 Hospice & home health services
 Part B (Part of the Original Medicare Bill)
 Doctor & clinical lab services
 Outpatient and preventative care
 Screenings, surgical fees, & supplies
 Physical & occupational therapy
 Part C (Introduced in 1997 by the Balanced Budget Act)
 Also known as Medicare Advantage
 Different way of getting part A & B coverage
 Combines parts A & B into one plan and offered as:
 HMO, PPO, PFFS, SNP
 Part D (Introduced in 2006, by the Medicare Prescription Drug, Improvement, & Modernization
Act of 2003)
 Prescription drug coverage
 Medicaid (who does it cover, when was it established, changes through the ACA) – signed into law by President
Lyndon Johnson on June 30th, 1965
 All states provide Medicaid coverage to:
 Low-income (below 100% Federal Poverty Line)
 Pregnant women
 Families w/ children, depending on income
 Disabled
 Key steps in the historical development of the UK, Germany, and Singapore’s healthcare systems
Historical Development: UK
 In 1911, parliament passed the very 1st form of what would become the National Health System (NHS)
 Parliament passed a very limited National Health Insurance Act
o Covered workers (not dependents) for primary care, pharmaceuticals, and provided cash for short
term disability or sickness
o Few other private organizations offered voluntary coverage
o Everyone else paid out of pocket, through charity, or by big public hospitals
 Problems at this time
o Poor coordination between public and private hospitals
o Access to specialists was uneven as many specialists gravitated towards private pay patients
o Feud erupted among physicians over qualifications and who could work in hospitals
 Throughout the 1920's and 1930's these issues sparked a heated and prolonged debate over healthcare
reform. This reform debate took two forms:
1) Option #1: extend the 1911 act into comprehensive National Health Insurance
 Analogous to nationalizing Medicare
 Based upon the ideology that all individuals have the right to healthcare
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2) Option #2: expand & universalize existing locally funded & run public health services
 Analogous to having public health efforts/services and insurance programs the responsibility of
individual municipalities and states
 Based upon the ideology that society has an obligation to look after the health of the people
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In the United Kingdom alone, during WWII:
o 2 million homes were destroyed
o ~100,000 people were killed
o As a result:
 Emergency medical services was formed and took charge of all medical services nationwide
 A coordinated hospital service forms
 National and regional services for lab work and blood transfusions was formed
 National service for surgery, neurology, psychiatry, and rehabilitation
 Every citizen of the U.K. was granted access to these services
Beveridge and Bevan
Historical Development: Germany
Otto von Bismarck: Germany's 1st Chancellor (1871)
o Hundreds of "sickness funds" already in operation throughout Germany
o Bismarck saw working class movement at that time as a threat (labor unions were gaining strength)
o In attempt to quell social unrest among workers and to control growing strength of labor unions
Bismarck proposed a national social insurance system
1883: Sickness Insurance Act Passed
o 1st social insurance program organized at a national level
o Organization & operation the sickness funds remained at the union level
o Remained primary structure of the system until WWII.
Adolf Hitler and the National Socialists did not share Bismarck's vision of health insurance as a way to promote
political stability
o Health insurance was a means to achieve the Third Reich's goal of a healthy, productive, fit and racially
pure German state.
o Centralized the power of the sickness funds
After WWII, Germany is divided into two separate entities
1) The Democratic Republic of Germany (East Germany)
 Under the influence of the former Soviet Union
 Saw this as an opportunity to show that socialist healthcare was superior than the capitalist
models
 Within months: established Central Health Administration
 1947: eliminated private practice
 Maintained Bismarckian insurance model
 89%: covered by employee based "sickness funds"
 11%: covered by the government
2) The Federal Republic of Germany (West Germany)
 Maintained its connections with the west
 Reestablished pre-war healthcare model
 Highly de-centralized model:
o 90%: covered through approximately 1,300 autonomous statutory sickness funds
o Funds divided into primary funds and substitute funds
o Patients can choose primary care physician and given one treatment voucher per
quarter
o PCP act as gatekeepers
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Historical Development: Singapore
Singapore gained independence from Britain in 1965. At the time, it was a tiny, impoverished country with
few assets and no natural resources
Lee Kuan Yew, Prime Minister of Singapore (1959-1990)
o Had a unique opportunity to learn from Western healthcare systems such as the U.K. and the U.S.
o Developed the belief that a system that took care of ALL of its citizens' needs would diminish the
population's desire to succeed.
 "The people's desire to achieve and succeed must never be compromised by an
overgenerous state"
Early years of Singapore's independence (1960's):
o Lee introduced a 5-year plan calling for:
 urban renewal and construction of new public housing
 greater rights for women
 educational reform
 industrialization.
o High-quality healthcare was not of high priority, however some steps were taken to improve the
health of Singaporeans.
 Brought primary care services closer to people (built a network of satellite outpatient
dispensaries and maternal and child health clinics) which became a one-stop shop for:
 Immunization, Health promotion, Health screenings, Well-women programs, Family
planning services, Nutritional advice, Psychiatric counselling, Dental care, Pharmacy,
Laboratory services, Home nursing and rehabilitative services
o Introduction of Fees at Outpatient Clinics:
 At first, all services were free- Lee's government imposed a fee of 50 cents per visit,
doubled during public holidays
 Set the tone early on that healthcare is not free and that citizens would have to take
personal responsibility for their care
Public Health Efforts
o Prior to independence: most Singaporeans live in unhygienic slums and crowded settlements, only
9% of the population lived in government flats
o 1960: set up Housing Development Board (HDB) began investing in good, clean, affordable housing
o 1965: 55,000 flats were built
o 1970: housing problems were solved
o Today: almost 85% of Singaporeans live in HDB flats
Sweeping reform in the 1980's: 1st Comprehensive National Health Plan introduced
o The plan aimed to:
 Keep healthcare affordable
 Meet the demands of a growing population (in both numbers and affluence)
 Keep empowering citizens to lead healthy lifestyles
 Improve costs and efficiency of its healthcare system
 Forecasted growing demands based upon an aging population
 Mentioned the need to restructure the delivery system to cope with the changing trends of
disease
 This was a shift most other countries started around 2010.
o Restructuring of the hospital system
 Government gave public hospitals more autonomy
 Some incorporated in 1980s, most in the '90s
 Goal was to create competition between the hospitals
 1984: Medisave
 1990: Medishield
 1993: Medifund
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1993: Released White Paper titled "Affordable Health Care"
 Became blueprint for developing and refining Singapore's healthcare system:
 Become a healthy nation by promoting good health
 Promote individual responsibility for one's own health and avoid overreliance on
state welfare or third-party medical insurance
 Ensure good and affordable basic medical services for all Singaporean's
 Engage competition and market forces to improve service and raise efficiency; and
 Intervene directly in the healthcare sector when necessary, where the market fails
to keep healthcare costs down
Beveridge –
o Civil servant, educator
o Worked in London's lower east side - before, during & after WWII
o 1942: wrote & released The Beveridge Report
o Official Name: Social Insurance & Allied Health Services
o Government report
o Laid out the entire plan on how to develop & implement a fully federally-run healthcare system
Beven –
o Minister of Health (1945 - 1951)
o Shared in Beveridge's vision
o Official founder of the NHS when it was passed into law in July, 1948
o Had to make many compromises, especially w/ specialists
Bismarck –
o Germany's 1st Chancellor (1871)
o Hundreds of "sickness funds" already in operation throughout Germany
o Bismarck saw working class movement at that time as a threat (labor unions were gaining strength)
 In attempt to quell social unrest among workers and to control growing strength of labor unions
Bismarck proposed a national social insurance system
o 1883: Sickness Insurance Act Passed
 1st social insurance program organized at a national level
 Organization & operation the sickness funds remained at the union level
Lee Kwan Yew –
o Prime Minister of Singapore (1959-1990)
o Since his college days in the '40s he was able to witness the strain these Western nations were beginning
to show due to the high healthcare costs associated with their healthcare systems
o Lee knew it was necessary that for his country to realize his vision, its entire population would need to
be motivated and working hard
o Early years of Singapore's independence (1960's):
 Lee introduced a 5-year plan calling for:
 urban renewal and construction of new public housing
 greater rights for women
 educational reform
 industrialization
o High-quality healthcare was not a high priority, however some steps were taken to improve the health of
Singaporeans.
 Brought primary care services closer to people (built a network of satellite outpatient
dispensaries and maternal and child health clinics) which became a one-stop shop for:
 Immunization, Health promotion, Health screenings, Well-women programs, Family planning
services, Nutritional advice, Psychiatric counselling, Dental care, Pharmacy, Laboratory services,
Home nursing and rehabilitative services
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 Took huge pressure off the hospitals to provide such care
4 models of healthcare
1) Beveridge- socialized medicine - Medical and hospital services that are provided by a government
and paid for by taxes
 Europe:
o United Kingdom
o Spain
o Scandinavia
 Asia:
o Hong Kong
 Oceania:
o New Zealand
 Latin America:
o Cuba
2) Bismark- Medical and hospital services are provided through both private and public services and
paid for through sickness funds
 Europe:
o Germany
o Belgium
o Switzerland
o France
 Asia:
o Japan
 Latin America:
o Primarily everywhere except for Cuba
3) National Health Insurance- national health insurance model - Medical and healthcare services are
provided through both public and private entities and paid for by a single government insurance plan
 North America:
o Canada
 Asia:
o Taiwan
o South Korea
4) Out of Pocket- medical and healthcare services are provided through both public and private entities
and paid for by the individual receiving services
 Rural Regions:
o South America
o Africa
o China
o India
 In the United States: We have elements of all 4 models working in our healthcare system
o Beveridge model- Veterans Affairs/Tricare
o National health insurance model- medicare
o Bismarck model- Average worker
o Out-of-pocket model- ~10% with no access to health insurance
UK Model:
o Decentralized
o Believes that this is a shared responsibility of which the community/government as an obligation to
provide completely
German Model:
o delivery and sickness funds are:
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 decentralized
 private
o Believe in Social Solidarity
 "This principle is a firmly held belief that government is obligated to ensure a wide range of
social benefits are available to all citizens including medical care, old age pensions,
unemployment insurance, disability payments, maternity benefits, and other forms of social
welfare"
Singapore’s Model:
o centralized
o public and private (delivery both, insurance public), medisave, medishield, and medifund
o Developed the belief that a system that took care of ALL of its citizens' needs would diminish the
population's desire to succeed.
 "the people's desire to achieve and succeed must never be compromised by an overgenerous
state"
Payment models:
o SEE UNDER KEY WORDS
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