HA4120D – Management of Continuum Care Services

Detail the impact of public policy on the financing of health care.

The purpose of this paper is to provide a detailed description and analysis of how federal, state, local, private insurance, employer-sponsored plans, Medicare, Medicaid, and other sources finance health services in the United States. This information will be used as background for an examination of the effects that changes in these policies may have on access to medical care.

Methods: A review was conducted using data from various government agencies and published literature. Data were collected by reviewing reports prepared by HCFA, examining agency publications, conducting interviews with key informants, and consulting with experts in the field.

Results: Federal programs are responsible for providing about half of all funding for health care; however, they do not cover all costs associated with delivering health care. State governments fund most hospital operations through general revenue funds or dedicated tax revenues. Localities also contribute significantly to hospitals’ budgets. Private insurers pay claims directly to providers but often use third party administrators to negotiate rates with physicians and hospitals. Employer-based coverage usually includes some form of reimbursement for physician visits and procedures. In addition, many employers offer supplemental benefits such as dental and vision care. Medicare provides payment for certain types of institutionalized long term care. Medicaid pays for nursing home care and covers approximately one quarter of total spending for health care. Other forms of assistance include free care at military facilities, Indian reservations, and emergency rooms.

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