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Healthcare system overview
The different roles in the healthcare system. Created by Sal Khan.
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- My understanding is that the US cannot compete in a world market with countries that have a real national health plan. It gets added to the price of the product here. It seems that the health care industry chooses to ignore that. Why? When our country is going down the tubes so fast and unable to compete in a world market, would health care choose to be the albatross around the neck of every person in this country to the point that it will probably sink the whole country? Why let them do that?(1 vote)
- You've got to pay for health care one way or the other. In the US, employers pay for it directly (maybe with some cost-sharing with the employee), but in turn, pass those costs on to either the employee (through reduced wages) or the consumer (through higher costs). But those consumers are (usually) patients as well. In a nationalized health care system, the gov't might pay for it (again possibly cost-shared with the patient), but in return, taxes its citizens (patients) higher. The later would mean that the employer would have to pay the employee more pre-tax salary for them to receive the same post-tax purchasing power. So while the mechanism might have some impact on people's behaviors at the margin, they're still both systems where the provider and the patient are not the payor. And they're still both systems where someone is paying for the services. So I don't see how nationalized vs. employer-based private insurance leads to one country's industries being less competitive. The big difference is the level of coverage - nationalized systems (usually?) cover everyone, while an employer-based system would leave un- and under-employed patients to fend for themselves. But I haven't heard someone argue why the later makes an industry less competitive.(5 votes)
- Sal, are you closer to the microphone than the people you interview?(12 votes)
- Its somewhat annoying. Oh well. Its a good presentation.(1 vote)
- What's the difference between a copayment, deductible, and premium?(1 vote)
- Copayment: For each visit you make, you pay a certain amount (either a base amount- or %) ex- you insurer might require you make a 50% copay to see your physician. The visit costs $100 so you have to pay $50 and they pay the other $50.
Deductible: A certain amount you need to pay, per year usually, before insurance begins to kick in. Ex- you might have a $100 deductible. Your first doctor visit costs $100- and so you have to pay all of it. However you have now paid off your $100 deductible- so your next visit will be covered by your insurance.
Premium: Just the basic 'price' of your policy. You would have to pay this regardless of whether you require any care or not. All types of insurance (life, home) require that you pay a premium.
Premium is more self explanatory- while the deductible and copay are a little more complicated/interconnected. Both are implemented in ways to discourage people of using certain levels/types of care, i.e. Moral Hazard. In simplistic terms, copay would decrease one's FREQUENCY of utilization (as you pay each time) while a deductible would discourage one from going for trivial matters, because you would have to pay the initial amount of $ yourself. They can be used alone, or together in a policy.(19 votes)
- If a person go's into the emergency room and that person has no health insurance, can he be denied health treatment? If he gets the treatment, who pays for it?(5 votes)
- The person cannot be denied emergency treatment regardless of ability to pay. The federal law is called EMTALA. The hospital can attempt to collect payment from the individual by billing him. In the end the hospital ends up covering any unpaid costs.(6 votes)
- I would like to know if it would be realistic for me to go to college to try and become a doctor at 30 years of age. I currently only have about 30 college credits. My biggest concern is the financial aspect. Having two children and placing our living expenses on my spouse would be very stressful.
What financial help is available?
What options would I have to quickly pay off the loans after residency?
I've heard that doctors sometimes have other sources of income, such as being on an advisory board. How rare are these positions and how many hours do they usually consume of your week?
Would it be worth the sacrifices at my age?
Would becoming a surgeon even be an option for me?(5 votes)- I go to medical school in Canada and many of my classmates are older than me (26), and some are well into their 30's. The Canadian banks offer generous lines of credit to students (minimum $250 000) in addition to government student loans (about $10 000/year). I don't know anyone making money effectively while going to med school, but that's not to say you couldn't. During residency one can begin making money, but you're still years away from debt free. Residencies can last between 2 and many many years. Med school is 4. Consider your non-income earning years, and then sigh and sign up. It's worth it, I think. Check out pre-med 101.(3 votes)
- While healthcare originally began to be paid for by employers when they were trying to attract workers who were in short supply, at this point, however, it seems more of an obligation that employers resent. Employers & healthcare aren't a good mix. Employers consider how much an employee will cost in healthcare; when unemployed, one loses care--possibly when needed most; workers put their care into the hands of self-interested companies, thus getting less. Why fight governmental healthcare?(4 votes)
- Were HMOs ever supported by the AMA? It seems like now they are constantly attacked but I can see how it may have seemed appealing initially(2 votes)
- HMOs were initially strongly opposed by the medical establishment because they were a threat to the traditional fee-for-service method of payment. They were later embraced by the AMA because doctors were more consistently reimbursed by HMO's than by individual patients.(4 votes)
- Why cant the U.S. work with other countries to have a good affordable health care plan(3 votes)
- What is the differene between Kaiser system versus traditional HMO ?(2 votes)
- Problem is the big programs our government has created are all bankrupt or going bankrupt. Look at any study on the out years of social security, and the health care programs and they all are totally unsustainable. So everyone wants big government to save them from health care expenses. Bottom line, this government is corrupt and will mess up and destroy the good that is still in our system. People from all over the world come to the united states to get health care. Heart surgery, Transplants, Cancer research is making huge progress. However Cancer is something i would like to propose as a main topic that can bring together both sides in this debate. It is used as a wedge at the moment. Here are my thoughts on Cancer and how that one disease can promote a government plan.
If you owned an insurance company and you could eliminate having to cover any of your customers for cancer treatment, you could compete and lower prices for most of your customers. If the government would set up a universal CANCER health care structure where cancer treatment was free. I think 99% of the people here in the united states would be for it and I think most would gladly donate money to such a cause as many do to charitable organizations now. By taking off the table some of the most expensive health care problems and specializing in the quest to cure cancer and help those that have fallen would be a tribute to such a great nation. Covering everything from soup to nuts is a recipe for disaster because this government is not qualified to run something that diverse. Find a way to help the people that need the most help that have fallen to a disease that one in three will be afflicted with and I think you can bring all people to the table. We do it with the CDC and stomp out major pandemics , food born pathogens and many diseases that third world countries still suffer from, and we do that with taxes on all (well 50% of the people don't pay any tax but you get the point.)(1 vote)
Video transcript
SALMAN KHAN: I'm here
with Professor Laurence Baker at Stanford
Medical School. And what we're going
to talk about now is the overview of the
health care system. LAURENCE BAKER: What is
the health care system? SALMAN KHAN: Yeah,
and who's in it? LAURENCE BAKER: And who's in it? And what are they doing? SALMAN KHAN: I think I
could give a go at it. LAURENCE BAKER: Go for it. SALMAN KHAN: And
then correct me. Expose my ignorance. So clearly, you
have your providers. Those would be your doctors,
and nurses, and all the rest. LAURENCE BAKER:
Hospitals, pharmacies, all kinds of people
are your providers. SALMAN KHAN: OK, so everyone
who's providing health care. So that's right over there. So that's hospitals, doctors,
pharmacies, all the rest. And then they are providing
the health care to someone. So those would be the patients. Let me do that in another color. LAURENCE BAKER:
Call them patients. Yeah, sometimes
you get the details like people become patients
after they need health care. But some people just
have a question. They're not really patients,
they're just asking. SALMAN KHAN: OK. What would you call them then? LAURENCE BAKER: Call
them population. SALMAN KHAN: Population. So just the population of
the world, or of the country, or whatever-- people. And then someone
has to pay for this. And so for the most
part, this is insurers. LAURENCE BAKER: Yup. Insurance companies. In the olden days--
like if you go back 100 years-- we didn't
really have insurers. We had patients and providers. And patients would-- if they had
a question, they had a concern, they go to the provider. They'd make some deal,
pay them some money, do some service for
them and work it out. We got insurance
companies really only in the last
100 years, maybe. Really starting in
the US in maybe 1930. 1940, they started
to become popular. So that's kind of
a new renovation. And those three
things work together. SALMAN KHAN: And the
general term-- and this is a word I've seen a
lot, and sometimes it's a little confusing because
it's very close to payer, you hear of these payors. And that would be
including anyone who's paying for the
paying for the service. And insurance companies
would be included there. LAURENCE BAKER: Right. So we have-- we
call them payors. Sometimes we call
them health plans because they arrange for some
of the care that people get. And payors could be private
insurance companies, or they could be government
payors-- government insurance companies like Medicare. SALMAN KHAN: And the insurance
companies themselves, they're not doing this out of
the goodness of their heart. Someone is paying them. And for the most part
in the United States, it tends to be employers. LAURENCE BAKER: So right. So if we made another
arrow on your diagram here, it would be from
the population-- or maybe from the patients--
to the insurance companies that provides the money for
the insurance companies to use to pay for the provider. So patients might buy
an insurance company-- or not an insurance company,
buy an insurance policy. SALMAN KHAN: Only if
they're very well healed. LAURENCE BAKER: Some of
them buy the whole thing. But they just might
buy their own policy. Go buy an insurance policy,
pay them a premium directly, the insurance company
collects that money. Or, for most people, they
work for an employer. The employer makes
the arrangement to buy that insurance and
then implicitly charges the population, the
patients for that. Maybe directly by
having them contribute some of their salary. Maybe implicitly by just
reducing the amount of cash they give them every
month, and instead giving them this
insurance policy. So people do that. And the other piece that's
floating around in here is that in some cases,
the population pays taxes to the government that
then functions essentially as an insurer, like the
Medicare program, where there's insurance provided to people
that's paid for by taxes. So there's some different
funds flows going around here, but always money
going from patients to insurers, through employers
from taxes, by direct payments. Those insurers
collecting the money and then paying for a
bunch of the care that's provided by the providers. And that's the
basic arrangement. There's one more
tiny piece, which is that sometimes patients pay
the doctors or the hospitals directly. You go you have
a $20 co-payment. And so there's a small payment
that goes back and forth. SALMAN KHAN: Your
copay is kind of there just so that-- it kind of makes
the insurance company feel good that you're not just
using it willy-nilly-- that you have to
pay your $10 or $50. LAURENCE BAKER: Absolutely. So insurers know
that once they start paying the providers
for the care, and the patient says
it's totally free, people might use
stuff that might be worth a little tiny bit, but
it costs a lot for everybody to pay for. So if you put a
co-payment on there, it makes people think
twice about using things that they don't really need. SALMAN KHAN: Right. That makes complete sense. And then within this ecosystem--
we hear a lot about HMOs. My perception is that's a
combination of the insurance company and the provider. It's kind of in one package. LAURENCE BAKER: Right. So over time, the US has had
different kinds of insurers out there. In the private market,
especially, there's been a lot of innovation
in the last 30, 40 years in types of
insurers that are out there. So we have different
insurers that have behaved in
different ways as we've gone through those
evolutionary cycles. So one version of that is
what we call an HMO-- a health maintenance organization. And that's really just jargon. You have to dig into it to
figure out what it means. But in a lot of
cases, what that is is a company that's
acting as insurance. So you pay a premium to them if
you're a patient or a person, and you buy some coverage. And then they'll
cover your care. But they'll do that by trying
to integrate themselves with the providers. And so the
organizations either are integrated because the HMO hires
doctors directly, or maybe owns the hospitals-- like Kaiser
Permanente, for example. Or, in some cases it's a
contractual relationship. It's not exactly the same. SALMAN KHAN: So not all of them
is tightly linked as a Kaiser, where it's like, you go
to this building that says Kaiser on it. And that's where your doctor is. It could be doctors just
have their practices, but they're tightly
linked with a-- I think that's how, what Blue Shield? Or one of those. LAURENCE BAKER: Yeah,
Blue Shield, or Aetna, or some of these
different companies. And you can start to
dig into the details and every one will be a little
bit different from the other, but they're contractual
relationships. SALMAN KHAN: And
the difference-- I think this is something
everyone faces when they sign up with insurance
with their employer-- I had to do it recently--
is-- they all say, you have to pick HMO versus PPO. And they're within
the same policy. And so my perception is HMO is
you have set list of doctors that they probably
pre-negotiated pricing with. LAURENCE BAKER: Yeah. So the difference
between HMOs and PPOs gets a little bit
into the details SALMAN KHAN: OK. I don't want to get too into-- LAURENCE BAKER: We can sort
of think about it in the way that you're talking about it. So an HMO will have
a list of doctors that you're supposed to see. And you'll have to go see
the doctors on that list. And a stereotypical one, if
you don't see the doctors on that list, the
insurance company's not going to pay
for you care, you're going to pay for yourself. And in the stereotypical
HMO, there's going to be a fairly
tight management between the insurance company
and the doctors about what's going to be done, what's
allowable, and so on. SALMAN KHAN: And in the
most tightly linked case, they'll be the same. They doctors will be
employed by the company. That's like Kaiser. LAURENCE BAKER: As you think
about it as a spectrum, if you move a little bit
away from that to a PPO. What's happening in
a PPO is you're still going to get a list,
so you're going to be encouraged to
see those doctors, but maybe it'll be a
little more flexibility. Like, if you decided not
to see someone on the list, the plan would still
pay some amount. Maybe not as much as they would
if you saw someone on a list, but something. Whereas in an HMO,
maybe nothing. And the plan will probably
work a little less hard at managing what those doctors
are doing to try and limit access to, say,
high cost services. HMO will tend to
work harder, PPO tends to work a
little less hard. So it's a little
bit of a spectrum. You're kind of moving from more
managed and more concentrated to a little less managed, but
still more so than the system we had, say, in
the '50s or '60s, where anybody went
to any doctor, and any doctor did
whatever they wanted. And the insurance company
just paid the bill, and there was no integration. So it's a little bit of a-- SALMAN KHAN: So that's
the main motivation why insurance
companies are trying to get more integrated
with the providers, is because-- just like you
said, in the '50s and '60s, you have the provider
providing a service. And obviously the
patient like the service. And then you have a third
party paying for it. And so there's no check
on-- the person deciding and the person getting it says,
yeah, let's get more service. And someone else is-- right. LAURENCE BAKER: So we
created a big issue. Insurance companies are
kind of an interesting thing in a health policy world. Because we have to have them. We have to have them to
manage the risk associated with getting sick. You get sick today
and get a huge bill. And so we can't leave people
on their own for that. We got to have
insurance companies. But as soon as you create
insurance companies, and I can have, implicitly,
all my neighbors pay for the health
care that I want, then I might start using things that
turn out to be an efficient. And so you got to have
them-- insurance companies. But you got to manage what
happens when you have them also. And so that's the
integration between providers or co-payments and utilization
review, and all these things, are basically attempts
by insurance companies to try and manage
what economists would call the moral hazard. The using additional services
that you don't necessarily need because everybody else is
going to pay for it for you. SALMAN KHAN: It
makes complete sense. Well thanks. That makes a ton of sense.