Chapter 1
The Health Care
System
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Learning Objectives
• Describe the organization of the health care system in
the United States.
• Describe the focus of public health services.
• Define the three levels of prevention.
• Discuss financing of health care in the United States,
including Medicare and Medicaid programs.
• Describe the components of the health care system that
provide outpatient and inpatient care and the types of
service each provides.
• Describe the impact of cost-containment measures on
the delivery of care.
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Organization
• Health care system consists of patient,
patient’s family, community, governmental
agencies, health care providers, insurance
companies
• Many health services funded by government or
private agencies
• Not all U.S. citizens eligible for government
funds; some unable or unwilling to obtain
private insurance
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Managed Care
• Provides comprehensive health care at a
reasonable cost
• Health maintenance organization (HMO)
• Preferred provider organization (PPO)
• Managed care has stimulated increased
interest in wellness and prevention, increased
outpatient and home health care, and
increased cost sharing
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Administration
• 1953: Department of Health, Education and Welfare
was established to organize the health and we
• lf are agencies of the U.S. government
• 1980: Department of Health and Human Services
(DHHS) was created when education became a
separate department
• Today: DHHS programs are administered by the Public
Health Service and Centers for Medicare & Medicaid
Services, Administration for Children and Families, and
the Administration on Aging
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Public Health
• Improvement of the health of communities and
aggregates (collections of people) rather than
the individual
• Main goals are to protect and improve the
health of populations at risk in the community
and to prevent disease and disability
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Primary Prevention
• To improve health; prevent disease and injury
• Exercise programs to increase strength and
cardiovascular fitness
• Campaigns in schools to prevent children from
smoking and to educate people to wear seat belts
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Secondary Prevention
• Focuses on early detection and treatment of
disease to improve patient outcomes
• Papanicolaou (Pap) smears and screening
mammograms
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Tertiary Prevention
• To prevent disease recurrence or complications
• The use of physical therapy to prevent contractures
in a stroke patient
• Teaching proper diet and foot care to a person with
diabetes
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Financing
• U.S. health care most expensive in the world
• In 2002, $1.6 trillion (equal to 14.9% of gross
domestic product [GDP]) spent on health care,
compared with 5% in 1960
• By 2013, projected total health care
expenditures of $3.6 trillion, accounting for
18.4% of GDP
• Largest component of health care costs (32%)
is hospital expenditures
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Financing
• Many approaches to health care financing:
HMOs, PPOs, and governmental agencies
affect how health care is delivered
• Capitation: designed to control costs
• HMOs pay physicians a fixed amount each month
for each member (patient) enrolled in the plan,
regardless of whether the physician sees the patient
that month
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Medicare
• Medicare: health insurance program offered by
the U.S. government as part of the Social
Security Act
• Helps pay for health care of people ages 65
and older, those of any age with permanent
kidney failure, and those younger than age 65
who qualify for Social Security disability
benefits
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Medicare
• Diagnosis-related groups (DRGs)
• Hospitals reimbursed a flat fee for specified number
of days based on predetermined diagnosis fee
schedule
• If the patient gets better faster, hospital makes
money; if longer stay, hospital loses money
• Medicare prescription drug coverage
• Medicare typically pays about half an individual’s
annual drug costs
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Medicaid
• Government insurance program for people of
very low income
• Funded by federal, state, and local taxes;
administered by federal and state governments
on a partnership basis
• States develop and operate Medicaid
programs within federal guidelines
• Benefits vary from state to state
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Medicaid
• Benefits provided for needy, low-income
disabled individuals younger than age 65 and
their dependent children
• Individuals older than age 65 who are below a
specified income level may also receive
benefits, including services that Medicare does
not cover
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Physicians Offices
• Physicians may practice in individual or group
settings
• Many group practices are made up of various
medical specialties so that clients can have all
their health care needs dealt with in one
location
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Clinics
• Outpatient clinics are associated with community
hospitals, teaching hospitals, or public health
departments
• Focus on people with chronic illnesses (diabetes or
heart disease) but also treat people with acute
illnesses
• Care in clinics: diagnose and treat current illness
• Clinics offer physician and nursing services,
rehabilitation, prenatal care, well-baby checkups,
immunizations, preventive dental and eye care,
laboratory and diagnostic services
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Figure 1-1
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Health Maintenance Organizations
• Group practice with prepayment, voluntary
enrollment, combination of hospital and
outpatient facilities, emphasis on health
promotion and illness prevention, and
physician responsibility for direction of patient
care
• Federal government enacted the Health
Maintenance Organization Act
• Helps private agencies develop methods of health
care delivery to control accessibility, quality, and
cost
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Ambulatory Care Centers
• Alternative to inpatient surgery
• Located in hospitals, freestanding clinics,
health care centers, and physicians offices
• Less costly and allows people to recover in
their own homes
• After recovery from anesthesia, patient is
discharged, usually the same day
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Home Health Agencies
• History of home health care
• 1617: St. Vincent de Paul organized Daughters of
Charity
• Members went from house to house, taking food,
education, and health care to the sick
• Mid-1800s: William Rathbone organized first district
nursing organization; opened the first training
school for visiting nurses in 1859
• 1893: Lillian Wald, forerunner of modern public
health nursing, founded Henry Street Settlement
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Focus of Home Health Care
• Services for clients in their homes or assisted
living centers: promote, maintain, or restore
health or minimize the effects of illness and
disability
• Home health care one of fastest-growing fields
• Medical and dental care, nursing care, physical
and occupational therapy, speech therapy,
enterostomal therapy, social work, nutrition
counseling, transportation, lab services,
medical equipment and supplies, and the
assistance of home health aides and
homemakers
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Funding of Home Care Services
• Paid for by individuals, private insurance,
Medicare, and Medicaid
• Most nursing services paid for by Medicare
must be skilled care; strict governmental
guidelines define care that must be provided
• Medicare regulations for home care identify
standard duties of the LPN, including furnishing
health services, preparing progress notes,
assisting the RN in special procedures, and
assisting the patient in learning self-care
techniques
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Voluntary Agencies
• First to deliver nursing care in the home
• Financed by wealthy philanthropists in the
community; mission was to care for the sick
poor
• Visiting Nurses Association: most common
example of a voluntary agency
• Usually governed by a community board of
directors that determines service delivery
policies and assists with fund-raising
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Official Agencies
• Supported by tax dollars; authorized by law to deliver
services to a defined area or community
• State, regional, and local health departments are
responsible for health promotion and disease
prevention services, communicable disease
investigation, environmental health protection
• In most states, includes maternal and child services,
sexually transmitted infection clinics, tuberculosis
surveillance and treatment, and other health services
as funds permit
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Proprietary Agencies
• Organized to make a profit on their operation
• May or may not participate in Medicare; most
do
• May be owned by individuals or corporate
chains
• Limitations imposed by the Balanced Budget
Act (1997) decreased profitability, and many
have closed
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Hospital-Based Agencies
• Usually governed by hospital’s board of
directors
• Most referrals from the hospital itself
• Philosophy and policies usually consistent with
those of parent institution
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Outpatient Care
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Home Health Care Services
• Physical therapy
• For patients recovering from health problems
affecting mobility, such as hip fractures and strokes
• Physical therapists assess need for walkers,
wheelchairs, and grab bars and work with patients
on therapies to regain strength and mobility
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Home Health Care Services
• Speech therapy
• Speech therapists work with patients who have
speech or swallowing disorders
• A common indication for speech therapy is aphasia
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Home Health Care Services
• Occupational therapy
• For conditions that impair upper-extremity
movement
• People with arthritis or stroke may benefit from
assistive devices for dressing and other daily
personal care and household activities
• Occupational therapists also provide muscle
reeducation, splinting, and improved control of fine
motor movement
• Timely occupational therapy can help the patient
become safer and more independent in the home
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Home Health Care Services
• Social workers
• Provide valuable assistance to families trying to
manage chronic illness in the home
• Work with families to identify problems that arise in
managing illness at home and recommend referrals
to community resources
• May provide information about financial assistance
and help with applications for community services
such as Meals-on-Wheels and respite care
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Home Health Care Services
• Home health aide services
• Provide personal care, such as bathing, ambulating,
transferring, skin care, and oral hygiene, for the
patient in the home
• Measure and record vital signs and do other basic,
nonskilled tasks
• Homemaking tasks, such as making the bed and
straightening the client’s room, are also common
home health aide services
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Home Health Care Services
• Homemaker services
• Usually provided by families or state and local
assistance programs
• Duties include common household chores, such as
cooking, light housekeeping, laundry, shopping, and
picking up medications
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Home Health Care Services
• Enterostomal therapy
• Specialists in the care of all types of wounds, such
as pressure ulcers, surgical wounds, and ostomies
• Provide care to patients and consultation to nurses
on how to manage wounds
• Extensive knowledge of skin care products and
ostomy appliances
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Home Health Care Services
• Other home health care service providers
• Dietitians
• Nurse practitioners
• Psychologists
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Home Health Care Services
• Specialty home care services
• Pediatric: small, compact pumps, ventilators, and
monitors have enabled children with cancer,
respiratory disease, and cerebral palsy to live more
normal lives at home
• Mental health: provide medication monitoring and
teaching and perform mental status examinations
and suicide assessments
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Hospice
• May be delivered in the home, acute care
hospital, or extended care facility
• Provide care for terminally ill patients in the
home and other specified facilities
• Purpose: enable terminally ill patients to live as
full a life as possible, with skilled personnel
managing pain, discomfort, and other
symptoms associated with the illness
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Adult Daycare Centers
• Services and activities
• Promote health and socialization
• Benefit the elderly and mentally ill
• May be associated with hospitals or nursing homes,
or function independently
• Allow older people to live supervised in the
community during the day while the family is at work
• Centers provide health-related services, health
promotion programs, nutritional meals, and
social activities
• Fees are based on a sliding scale fee or free
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Inpatient Care
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Hospitals
• Vary greatly in size, shape, and organization
• Some hospitals are public and financed by the
local, state, or federal government; others are
private and owned by churches, businesses,
corporations, or charitable organizations
• Most frequent reasons for hospitalization are
infant delivery, cardiovascular disease, chest
pain, pneumonia, and depression
• Transitional and subacute facilities provide
intermediate levels of care after hospital
discharge
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Figure 1-3
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Psychiatric Hospitals
• Inpatient and outpatient treatment for acute
psychiatric illnesses; focus on helping clients
control their behavior or restore their behavior
to what it was before entering the hospital
• May be private, nonprofit organizations that are
sponsored by organized churches or run by local,
state, or federal governments
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Rehabilitation Centers
• Restore individuals to former level of
functioning or maintain or maximize remaining
function
• Located within the hospital or nursing home or
in a freestanding residential institution
• May focus on physical problems, such as those
caused by stroke, spinal cord injury, or
amputation, or on mental health problems,
such as drug dependency or mental illness
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Figure 1-4
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Long-Term Care Facilities
• Originally described institutions attached to
hospitals for recovery from acute illness
• Now describe several different kinds of
institutions—nursing homes, convalescent
homes, and some residential institutions—
whose primary purpose is caring for people
with chronic illnesses and physical impairments
• Focus is on those who do not need
hospitalization but cannot care for themselves
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Figure 1-2
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Long-Term Care Facilities
• Independent living retirement centers
• Offer services that permit residents to access the
level of care needed at a given point in time
• Boarding and personal care homes
• Provide a room and meals and, in some cases,
minimal assistance and supervision
• Residents of these facilities usually come and go as
they please
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Long-Term Care Facilities
• Assisted living facilities
• Permit a high degree of independence but usually
have limited access to nursing care
• Help with medications; some treatments may be
provided
• Residents often have kitchens; some group meals
are typically provided
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Long-Term Care Facilities
• Intermediate-care skilled nursing facility
• Provides care from a licensed nursing staff,
including rehabilitation for people who can regain
function
• Services: medical and nursing care; physical
rehabilitation; long-term ventilator care; wound care;
pharmaceutical, dietary, and social services; dental
care; and activities
• Federal regulations require an RN to serve as
director of nursing and an LPN to be on duty at least
8 hours a day
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Skilled Nursing Facility
• Residents must be in need of care that
consists of observation during an acute or
unstable phase of an illness, administration of
enteral (tube) feedings or IV fluids, bowel and
bladder retraining (for a limited period),
administration of intramuscular or intravenous
medications, or changing of sterile dressings
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