Unit 5: Objectives
        • Describe healthcare financing in the US and 
             the history and role of the health insurance 
             industry 
        • Understand the payment process in 
             healthcare and concepts of reimbursement,  
             billing and coding of claims using appropriate 
             code sets during the billing process
        • Review factors responsible for escalating 
             healthcare expenditures in the US
        • Describe methods of cost containment  
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                               Section 5A Goals
        • Examine total healthcare expenditures in the 
             United States
        • Review the growth and development of the 
             health insurance industry in the US
        • Describe the revenue cycle and the billing 
             process including charge capture and coding 
             in the cycle that ensures appropriate 
             reimbursement
        • Review the use code sets and electronic data 
             interchange transactions used in the claims 
             process 
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                   National Health Expenditures 
                                                          2008 
        Total Healthcare Expenditures (billions)                                               2339
             Private                                                                           1232
             Public                                                                            1107 
                  Federal                                                                        817 
                  State and Local                                                                290 
        U.S. Population in Millions                                                              305
        GDP in Billions                                                                     14441
        National Health Exp. Share of GDP (%)                                                   16.2
        Adapted from: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health
        Statistics Group, at http://www.cms.gov/NationalHealthExpendData/ (Historical)
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                 U.S. Healthcare Expenditures 
                                                     (2008)
        • Average $7668 per person
        • 16.2% GDP 2008/19% GDP by 2018
        • 23% paid out of pocket
        • 64% paid by private health insurance
        • Private health insurance developed during 
             last 80 years
           Adapted from: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health
           Statistics Group, at http://www.cms.gov/NationalHealthExpendData/ (Historical)
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         History of Healthcare Financing
        • Late 19th and early 20th century
              – Care provided at patient’s or doctor’s home
              – Self-pay/charity payment for services
              – Increasing advancement of medicine as a science 
                  especially in surgery and infectious disease 
              – AMA standardizes medical education and quality of 
                  care improves
              – Medical care for illness moves out of the home to 
                  doctor’s office, surgical care at hospitals
              – Commercial health insurance not available due to 
                  unpredictability of health and “moral hazard”
                Adopted from: Thomasson, M, Health Insurance in the United States, available at 
                http://eh.net/encyclopedia/article/thomasson.insurance.health.us 
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