US Healthcare System
Sailesh Man Singh
Digital Health | Product Design UX | Product Design Consulting | Information Architecture | Enterprise Design Thinking Practitioner | Salesforce Health Cloud Specialist
Overview
The population of the United States exceeds 330 million individuals, with intricate connections among healthcare providers, payers, and patients in need of medical attention.
Healthcare coverage in the US is offered through a blend of private health insurance and public health programs, including Medicare and Medicaid.
In contrast to many nations, the United States has a unique approach to granting its citizens access to healthcare services. Predominantly, healthcare services are delivered by the private sector, comprising 58% non-profit community hospitals, 21% government-owned facilities, and 21% for-profit establishments.
Additionally, other facets of the US healthcare system, such as pharmaceutical and medical device companies, also operate within the private sector.
Patient:
A patient refers to an individual receiving healthcare services from healthcare professionals, typically seeking treatment from physicians, nurses, cardiologists, surgeons, therapists, or other healthcare providers due to illness or injury. Patients play a pivotal role as the primary driving force within the healthcare system.
In the context of the US healthcare system, patients are alternatively referred to as "members" or "subscribers." These terms highlight their association with healthcare plans or insurance subscriptions, indicating their role as individuals enrolled in such plans.
Payors:
Payors, predominantly comprising insurance entities like Blue Cross, Blue Shield, Aetna, Cigna, among others, are responsible for covering the costs of healthcare services utilized by patients. In situations where patients are employed, their employers may also serve as payors.
Typically, beneficiaries (patients) contribute by paying for a monthly or yearly insurance plan, securing coverage for a specified range of services in return.
Types of Healthcare Insurance Payers:
Providers:
Providers are entities or individuals authorized to deliver healthcare diagnosis and treatment services to patients, encompassing medical interventions, surgical procedures, and the use of medical devices.
Examples of providers include doctors, nurses, hospitals, clinics, therapists, as well as facilities such as radiology or imaging centers (e.g., MRIs, CAT scans, X-Rays), and laboratories conducting blood tests. Providers typically receive compensation for their services from health insurance providers.
Employers:
These are all the companies, organizations, and government offices that employ people in the US. Employers are an important part of the healthcare system because most Americans receive healthcare insurance through their employer as a job benefit.
Suppliers:
A person, an agency or a company that provides medical equipments to the providers and patients are called Suppliers. They generally provide medical devices, equipments such as post-acute care, surgical supplies, and supplies to support both medical practices (like syringes, gloves, and masks) and healthcare systems (including supply chain and inventory management technology).
Five largest medical suppliers in the US healthcare who provides such facilities:
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Clearing House:
A Clearing House is a third-party organization or company that receives and checks the claims made by the patients for errors, ensuring that the claims can get correctly processed by the payers. Along with claims, clearing houses also exchange electronic payments information through Electronic Remittance Advice (ERA)
Common Terms and Terminologies
Admission: The process by which a patient is admitted into a hospital for at least one overnight stay. Treatment during an admission is considered as ‘inpatient’ treatment, whereas treatment when a patient does not stay overnight at a hospital, regardless of whether or not the treatment physically occurred at the hospital, is considered an ‘outpatient’ treatment
Claim: An insurance claim that is submitted from a provider’s office to a patient’s health insurance company for payment. Typically, when a patient visits a provider (eg. a doctor), the patient will provide their insurance information
CPT Codes (Current Procedural Terminology) CPT codes are a numeric coding system to indicate what procedure a provider performed on a patient. They are often very specific and greatly affect billing. For example, CPT codes 12011-12018 are for suturing (stitching) simple repairs to face, ears, eyelids, nose, lips, etc
DRG (Diagnosis Related Grouping) DRG codes are used to group various diagnosis codes (ICDs) together when they are related
ICD (International Classification of Diseases) Commonly version 9 (ICD-9) or the current version 10 (ICD-10). An alphanumeric coding system for describing a patient’s diagnosis (disease or injury). When patients are treated by a provider, that provider will note what the patient was treated for by writing at least one ICD code on the patient’s medical record. These codes are extremely important because they are later used for everything from billing to assessing hospital or physician effectiveness.
Provider Network: A group of doctors, offices, hospitals, and other services (e.g. MRI/radiology/imaging) that belong to the same company. Examples include the Mass General Brigham in Massachusetts and Kaiser Permanente in California. While some networks are small and may only consist of a single office with a handful of doctors, others are huge and own many hospitals, outpatient clinics, laboratories, etc.
Revenue Cycle and Revenue Cycle Management (RCM): The process by which a provider collects money first from the payer and then from the patient. In reality, the American Revenue Cycle is complicated because Providers, Payers, and Patients often go back and forth many times to resolve a claim.
Readmission: A hospital admission that occurs within a certain period of time, usually 30 days, from a prior hospital stay and discharge. Although sometimes unavoidable, especially for very sick people, readmissions are usually considered to represent a failure of the hospital in the care of the patient. For this reason, readmissions are often used as an important performance metric for hospitals. Good hospitals will normally have lower-than-average readmission rates.
Inpatient: A patient who is treated in a hospital while admitted (i.e. during an overnight stay).?
Length of Stay (LOS): The number of nights a person spends in the hospital. Specifically, the number of nights that elapse from admission to discharge.
Outpatient: A patient who is treated outside of a hospital setting (i.e. not during an admission). Note that if a patient is treated at a hospital, but they are not staying overnight, they are still considered an outpatient.
PHR (Personal Health Record): An emerging health information technology that individuals can use to engage in their own healthcare to improve the quality and efficiency of that care. Some PHRs are offered by healthcare providers and health plans covered by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule, known as HIPAA covered entities. Alternatively, some PHRs are not offered by HIPAA covered entities. In these cases, it is the privacy policies of the PHR vendor as well as any other applicable laws, which will govern how information in the PHR is protected.
Subscriber: Usually a patient. A patient who is covered by health insurance is said to ‘subscribe’ to a health plan.
EMR (Electronic Medical Record): EMRs are digital versions of the paper charts in clinician offices, clinics, and hospitals. EMRs contain notes and information collected by and for the clinicians in that office, clinic, or hospital and are mostly used by providers for diagnosis and treatment. EMRs are more valuable than paper records because they enable providers to track data over time, identify patients for preventive visits and screenings, monitor patients, and improve healthcare quality. Usually, this digital record stays in the doctor's office and does not get shared. If a patient switches doctors, his or her EMR is unlikely to follow.
EHR (Electronic Health Record): EHR? is an electronic version of a patient's medical history that contains the patient's records from multiple doctors and provides a more holistic, long-term view of a patient's health. It includes their demographics, test results, medical history, history of present illness (HPI), and medications. It goes wherever the patient goes and gets shared by healthcare providers.
PMS (Practice Management Software): PMS is a type of software program used to operate medical and healthcare practices. Its core purpose is to help organize administrative tasks, streamline appointment bookings, simplify invoice creation and billing, and manage client or patient medical records.
Doctor’s/ Provider's checkup: Doctor/ provider examines the patient and reviews the patient's electronic health record through the EHR system for previous medical information. After the diagnosis, the doctor recommends or performs any test required and finally adds the prescription information in the progress report.
Medical Coding: Medical coding is the translation of medical reports into a short code used within the healthcare industry. This helps summarize otherwise cumbersome medical reports into efficient, data-friendly codes. While complex and detail-driven, medical coding really comes down to knowing how to navigate the three main code sets: CPT, ICD, and HCPCS. These code sets help coders document the condition of a patient and describe the medical procedure performed on that patient in response to their condition.?
Medical Billing: Medical billing is the preparation of invoices for procedures rendered, and these are given to patients and insurance companies.
Adjudication: Once a claim reaches a payer, it undergoes a process called adjudication. In adjudication, a payer evaluates a medical claim and decides whether the claim is valid/compliant and, if so, how much of the claim the payer will reimburse the provider for. It’s at this stage that a claim may be accepted, denied, or rejected.