Health, structure, organization and governance

Answer

Governments all over the world collect taxes to enable them to provide their citizens with essential public goods. Access to quality healthcare services is one of the vital public goods financed by governments to benefit their citizens. There are nations such as Japan, Canada, and Britain whose governments have ensured their citizens have universal health coverage through a single-payer system. Also, countries such as the United States are still struggling to ensure all their citizens have access to healthcare services through the multiplayer system.  According to Dalton and Byrne (2017), the cost of healthcare services is one of the major hindrances to access to quality healthcare services.  To increase access to care, the United States leverages the Medicare program. The program offers beneficiaries the option to enroll for either the traditional Medicaid or the Medicare Advantage Plan. This paper, therefore, purposes of analyzing the advantages and disadvantages of both the traditional and the Medicare advantage plans. Additionally, it seeks to demonstrate the program favored by physicians and discuss capitation related to reimbursements made through either of the Medicare plans.

Traditional Medicare Plan

The federal government offers the traditional Medicare has the following parts; first, Part A covers hospital insurance and caters for all services that involve inpatient stays in a hospital or a skilled care service provider such as a hospice.  The second part, Part B, offers medical insurance for outpatient services, and Medicare Part D offers coverage for prescription drugs.

Valuable elements of the Traditional Medicare Plan

Choice

According to Javanbakht et al. (2020), one of the downsides of medical insurance is their elimination of patients’ freedom of choice over where to get their care and who to provide the care the patients need. Under the traditional Medicare plan, patients still have a right to choose. The plan still offers patients the freedom to choose where to get their care and who provides such care as long as they participate in Medicare.  The freedom of choice ensures the patients get the care they believe is the best for them.  As Lind (2018) asserts, patients' trust and confidence in their doctors creates in them a positive mindset that plays a vital role in their health outcomes. According to Pepper et al. (2018), 93% of physicians in the United States accept Medicare, a fact that means there is a high chance that patients who choose the traditional Medicare Plan will not have to change their doctor and continue with their physicians who has their medical history.

Location of care

Apart from the freedom to choose their care provider, patients who choose the traditional Medicare Plan also have the freedom to get care anywhere within the United States as long as the medical care provider accepts Medicare. They are not limited to only getting care within a specific geographic area.   Therefore, it is a suitable medical insurance plan for  a person who likes traveling a lot as they are guaranteed access to care even when they leave their geographic area.  Under the traditional Medicare Plan, care is not offered in a network, and therefore there is no worry of having to pay more for medical care services sought outside one's geographic area as they are outside their network of care. Therefore, the traditional Medicare Plan does not limit care to a single geographical area and guarantees those who choose it as an option care throughout the country.

Negative elements of the Traditional Medicare Plan

Covered Care

One of the major shortfalls of the traditional Medicare plan is the relatively narrow list of covered care services.  The plans mainly cover hospital and medical costs only. Therefore, even though the patients have the freedom to choose their medical providers, the range of services covered is low. The plan does not pay for services such as cosmetic surgery and routing services for hearing dental and vision care. The patient must have Medigap, an insurance policy that caters to the services that the traditional Medicare Plan is not offering.  For instance, a supplemental care policy for vision or dental to cater for the patients' healthcare costs for dental and eye-related medical care services. The absence of various services from the list of medical care services offered through the traditional Medicare Plan that requires patients to seek supplemental insurance is a disadvantage.

Cost of care

 The cost of care under the traditional Medicare Plan is high in the long run because of the following reasons; first, the government decides the percentage of the premiums paid by the patients and the percentage of coinsurance. For instance, under the traditional Medicare Plan, patients pay 20% of the medical bill for Part B.  secondly, the patient also has to seek supplemental insurance to reduce their out-of-pocket payments for medical services not covered as routine dental care services.   The traditional Medicare Plan does not also have a limit to out-of-pocket payment. Therefore, the patients can end up paying thousands of dollars annually for out-of-pocket medical expenses.

Valuable elements of the Medicare Part C (Advantage Plan).

Covered Care

Unlike the traditional Medicare Plan, the Medicare Advantage plan covers a wide range of medical services. The plan offers its subscribers all the base services provided under the traditional medical care plan and a host of other numerous services.  For instance, those who choose Medicare advantage have access to vision, dental and can also access cosmetic surgery. The level of services offered varies based on the different types of medical care plans offered under the Medicare advantage plan. However, the main advantage is that regardless of the care plan selected under the Medicate part C, the number of medical services the patient has access to is far more than what is available to patients with the traditional Medicare plan. According to Wadhera et al. (2020), the federal government has also been improving the services offered under Medicare part C, such as providing gym membership and house modifications for patients, such as installing ramps in the house.

Cost

Medicare part C is also valuable because of its cost savings for the patients. The plan enables patients to save on costs of care by offering them a maximum limit for out-of-pocket payments that they can make within a year. Patients who have achieved the limit can receive care without having to make additional payments, thus resulting in significant cost savings.  As Crowley et al.(2020), the cost of medical care can easily bankrupt a family. Therefore the out-of-pocket limits set by plans offered under Medicare Part C protect patients from medical cases induced bankruptcy since the plan pays for 100% cost of care after the limit is reached.

Negative elements of the Medicare Part C (Advantage Plan).

Even though Medicare Part C as a choice offers patients a wide range of covered medical care services and is also cost-effective due to the medical limit, it has the following weaknesses;

Freedom of Choice

Medicare Advantage plan robs the patient of their right to choose medical practitioners that offer them care.  Patients are confined to working with physicians in a network of the care plans they have selected. Therefore, the patient is limited to only working with the physician in their network and in most cases, must get a referral to see a specialist or even seek care outside the network. The model, therefore, interferes with the continuum of care as a patent who has moved from the traditional Medicare plan in most cases have to deal with the change of physician and state dealing with a physician they do not have a relationship with and one that does not understand their medical history. Medicare Advantage plan, therefore, removes patients' right to choose their care providers.

Location of care

Medicare Advantage plan confines patients to care provided within a certain geographical region. Several plans offered under the Medicare advantage plan ensure that patients are assigned to a network based on their geographical area of residence. Therefore, the patients are only eligible to use the plan to access care within the network and make out-of-pocket payments outside the network.  Therefore, Medicare limits one's access to care should they leave their geographical area and move to another area.

Program Attractive to physicians

Prompt Reimbursement

Physicians are attracted to Medicare original. According to Pepper et al. (2018), more than 90% of physicians accept the traditional Medicare plan. The traditional Medicare plan is attractive to physicians because of the following reasons; first, prompt reimbursement.  Under the Medicare, plan physicians are reimbursed at least 14 days from the day of filling an electronic claim and at least 21 days after they file a paper-based claim. However, despite the presence of such clear guidelines, the timelines are not always adhered to, and come reimbursement can take months before they are made.  Reimbursements for Medicare advantage plans are much longer than those for the traditional Medicare plans, thus making medical practitioners favor them.

Administrative Burden

The level of documentation done by physicians providing care for Medicare patients is high. The paper trail that is used to file claims for payments requires physicians to hire those who assist in the administrative tasks thus incrusting the cost of care. The administrative burden for the Medicare advantage plan is far more cumbersome than that of the traditional Medicare plans because of the strict regulations physicians in the plans have to abide by. For instance, they are the ones who have to authorize any referral and justify such decisions. Therefore. The desire to handle less paperwork makes physicians prefer traditional Medicare plan.

Limits operations of physicians

Physicians prefer the rational Medicare plan because of the fee doom the plan offers them and their patients. Through the plan, the patient is free to choose any specialist to see. The physician is also free to recommend to the patient a specialist, unlike the Medicare advantage plan where the physician are bound to refer patients within the network. This factor limits the independence of the physicians in making decisions concerning the care of their patient.

Capitation

Capitation is a contract-based payment between the physician and the insurance ion payment received for the services offered to the patient. In a capitation payment contract, the medical provider receives a pre agreed payment for medical services offered per month per unit for a duration of at least one year. That is. The payment offered for a patient is fixed regardless of the number of times the patient comes in to seek care. The value of the fixed amount offered is offered based on the number of services offered and the approximate frequency of visits by patients, and the local costs of the services offered.  The method is often used to ensure that medical providers offer the best care to reduce the chances of their patients making several visits for care service. Such cases lead to losses since the medical practitioners will not receive additional payment for services offered due to repeat visits.

Advantages of capitation

Since capitation provides a fixed amount of payment per patient for the care provided over a period of time, it promotes the use of cost-effective yet reliable care processes. Through the use of capitation, physicians consider all options before embarking on expensive forms of delivering care such as surgeries. The payment model, therefore, results in reduced costs of care for the payers.

Secondly, capitation provides hospitals and medical care providers such as physicians with a more predictable cash flow from the medical services they are offering. They are paid in advance of the services they are offering and therefore are guaranteed to have finances to meet their financial obligations, such as paying employees. Additionally, through the advance payment, capitation reduces reimbursement wait time that plagues the other forms of payment from payers in the medical industry.

Additionally, capitation provides medical practitioners with the incentive to offer patients preventive care.  Medical practitioners paid through the use of capitation offer their patients frequent screenings and attests such as diabetes tests, cancer screenings, and counseling services. The preventive care services reduce the number of patients who need advanced care since diseases are identified early enough when they can still be cured and easily managed. The early detection ensures the patients do not have to make numerous visits to the hospital, a factor at can make the cost of care balloon over the fixed prepaid value for the care that the patient should be offered.

Furthermore, capitation increases the physicians' level of responsibility and accountability when offering care to the patients. It increases their ability to ensure they offer the patient the best care to reduce the number of visits they make to the hospital. Such accountability reduces the chances of the physician offering excess and unnecessary tests and medical procedures in order to control the cost of care. Such actions also protect the patient from incurring excess out-of-pocket payment.

Evaluation

Capitation as a method of payment is preferred in Medicare plan C.  Various medical plans such as the Health Maintenance Organization (HMO) medical plans leverage capitation to ensure that the patients in the network receive the best care possible and reduce the cost of care as much as possible. As Berenson et al. (2015) assert, Medicare advantage plans pay almost a similar amount as those offered by the traditional medicate plans, but the use of capitation payment increases the plans profit margins for payers involved as to reduces the cost of care.