Health care is a complicated ecosystem, with a variety of stakeholders, and these stakeholders have different wants, needs, and expectations. At the center of the health care system is the patient. The patient is seeking to improve or maintain their health, from the providers of health care services. The patient also is financing some portion of their health care, through the payment of premiums, taxes, and any out-of-pocket expenses. Health care providers include physicians and nurses, who actually direct the medical care for the patient. Health care services are provided in a variety of settings including doctors offices, hospitals, labs, pharmacies, and many other settings. Providers deliver care to patients, and are paid for those services by insurance companies and patients throughout out-of-pocket expense. Health care is paid for by a variety of sources including employers that fund health insurance for their employees and their dependents. Elderly, disabled, and low income individuals, receive insurance coverage that is funded by state and federal governments. In most instances, an insurance company is involved in the health care transaction, acting as a risk pooling entity or third party administrator for the employer or government purchaser. Risk pooling refers to the process of combining many individuals medical costs, in order to offset some of the costs of those who are unhealthy, by spreading their cost across many people. Insurance companies pay for health care services at a funds they receive as premium dollars. Government purchasers pay for health care services at a funds they receive as tax revenue. Pharmaceutical industry develops new drugs, test them for efficacy and safety, and promotes them for use by doctors. To help contextualize this a bit, let's look at Janet. Janet has a job at XYZ corporation, that provides her health insurance through ABC health insurer. XYZ pays 80% for her premium costs and Janet only pays the remaining 20% of premium cost. Janet breaks her leg skiing, and has to go to the hospital to have surgery to have it repaired. Her insurance coverage requires Janet to pay the first $500 in expense, in the form of a deductible. The remaining bills for the hospital, surgeon, and anesthesiologist are all paid for by her insurance company. Upon discharge from the hospital, Janet is given a prescription for antibiotics, to help her body heal after the surgery. She goes to the local pharmacy to have that prescription filled, pays a small copayment, and her insurance company pays for the remaining cost. So, we have many stakeholders involved in this simple example. The patient is Janet, she gets the care, she pays 20% of her premium cost and $500 deductible out-of-pocket. The provider includes the hospital, the surgeon, the anesthesiologist. They build the insurance company to get paid for the services they provide. The employer XYZ corporation pays 80% of Janet's premium. The insurer, ABC health insurer, collects premium from XYZ Corporation and Janet, and pays the provider bills as they come in. Pharma represented by the local pharmacy in the antibiotic distributor are also involved as well. The government is not really a factor in this example, however, if Janet were elderly or poor, her insurance coverage would be provided by the government rather than her employer. Ultimately, the stakeholders and the system are supposed to align to meet the needs of the patient. However, that is not always the case. Throughout this course, you will hear me say, "Follow the money", and you will see the inherent conflicts that often exist, between the purchasers and the providers of health care. Reduce costs for a purchaser, are reduced revenue and income for providers. There are also potential consequences when health insurance is provided and financed by entities other than the patient. Insulating patients and providers from the true cost of health care, and prohibiting them from being better consumers. We reviewed an example of how many stakeholders are involved, when a person has health insurance through their employment, and then seeks health care services when they are ill, or sustain an injury. Remember, this is just one example of many. So, with all of these stakeholders involved in this complex web, which stakeholder in your opinion has the most influence on health care spend and trend, and why?
