Measuring Cancer Cost Behaviour under Prospective Payment System in Clinical Coding - Term Paper Example

 Clinical Coding and the Role of Managers in Healthcare Financing Introduction The need for universal and affordable healthcare has become a major concern for every government all over the world. Each country is striving to establish a system that will allow every citizen to access quality healthcare regardless of their ability to pay as observed by Mossialos (2002, p.62). As such, health economists have established two systems of healthcare that bring all stakeholders in the healthcare industry to play a part in securing a pool of resources through which to share the risk of health problems over every member of the pool. These systems include the public-sponsored system and the public-private mix. Either way, the increased economic disparities and healthcare challenges have necessitated a rational management of financial resources allocated for healthcare service provision. This paper looks at The Role Of Managers In Healthcare Financing With Respect To The Functions Of The National Healthcare Service. Besides, the paper provides a succinct discussion on The Importance Of Clinical Coding In Promoting Proper Channelling Of Finances For Purchasing Healthcare Services. In particular, this paper examines the role of clinical coding in measuring the cost of cancer care and how such data promotes evidence based decision making for equitable allocation of healthcare resources. Challenges in managing Healthcare Costs According to Berger (2008), healthcare systems are organized in a manned that allows strategic achievement of three specific objectives. The first objective relates to collection of revenue from various sources including government, donors and individuals. The second objective of healthcare system is to enhance pooling of resources from all stakeholders such that the risk of ill health is shared among every member of the pool. Lastly, every healthcare system aims to provide an affordable and accessible platform of purchasing healthcare services that suits the best expectations of individual members of the society. With these objectives in mind, financial management of healthcare resources becomes a central focus at every stage in order to strike a balance between quality services and scarcity of resources as argued by Bodenheimer and Fernandez (2005, p.27). In the hierarchy of the National Healthcare Service, there are several healthcare trusts and public hospitals that work together to deliver health services to clients. Through the NHS, healthcare managers and commissioners are delegated the main duty of ensuring that various service providers deliver quality healthcare within the available financial resources allocated by the NHS as reiterated by Zelman et al (2009, p.75). These services are purchased by resources obtained from the pool which is managed by the NHS. Studies indicate that in public-sponsored systems such as the one deployed by UK, there is increased overspending especially in public hospital. A lot of money is used to purchase drugs and other medical deliverables that often surpass the allocated resources. Since public hospitals are heavily subsidized by the government, majority of the population especially the poor tend to take advantage of such cheaper services beyond the optimal capacity. The effect culminates to poor services in public hospitals when financial resources are exhausted before the end of a given financial year when the government can allocate another package (Abrams et al 2012, p.88). On the hand, private facilities are increasingly becoming specialized in particular areas of medicine. As such, they charge high rates for specialized services which in essence results in increased cost of healthcare per household as observed by Bodenheimer (2005a, p.847). In developed economies such as France where a public-private mixed system is deployed, clients enjoy the freedom of choice as to where they seek medical care and to what extent they want specialized attention. The only problem is that the extra cost above the allowable coinsurance is paid by the client from out-of-pocket copayment. Well, the business in normally profitable for private practitioners who benefits from private personal insurance or out-of-pocket copayments (Chirikos et al 2004; Gottret et al 2008, p.33). Looking at the two systems, public healthcare system is marred with overspending and potential poor quality of services due to inadequate financial resources. On the contrary, the public-private system is characterized by high rates and potential overcharging when billing the national healthcare insurance scheme or personal insurers of the client. These marks the first level of healthcare financing dilemma as reiterated by World Health Organization (2000, p.97). The second dilemma arises with respect to high cost healthcare services sought by the palliative and cancer patients. On one hand, this group constitutes less than 10% of the population yet the patients require specialized treatment and care which is not normally readily available in local public hospitals. Some of these cancer patients also happen to be very poor and majority are over 65 years of age. In public hospitals, most governments exempt cancer patients from copayment for various treatment services. However, these facilities hardly have sufficient and modern equipment for cancer care as argued by Brown et al (2001, p.94) and Kaufman (2007, p.16). Turning to private facilities, where specialized cancer care technologies are available, practitioners find it difficult to offer quality care within the predetermined coinsurance limits. Otherwise, these private facilities would either inflate the rates or compel the patient to top-up the surplus cost above the co-insured limit. Somehow, the vulnerable cancer patients are left at a in a healthcare quagmire where public hospitals do not offer reliable solutions and specialized private hospitals are unaffordable. It is on such critical grounds that the need for equitable allocation of resources should be reviewed to ensure that each member of the society has sustainable access to quality and affordable healthcare as emphasized by McLeod (2009) and WHO (2000, p104). Role of Managers in Healthcare Financing Since the day-to-day operation of the hospital lies in the hands of the Chief Medical Officer of Health and the Chief Financial Offer, these two personnel are best placed to control the financial endeavours of the facility without compromising the quality of service. Bodenheimer (2005b, p.998) argues that clinical expenditures are tied to clinical data that ascertains the variation between resource needs and resource consumption. Capital expenditures are made on the basis of local needs while medical supplies are replenished on the basis of average consumption. If there is no proper data to support these endeavours, then there is high probability of inequitable allocation or irrational utilization of healthcare financial resources as noted by Abrams (2012, p.87). To avoid such problems, healthcare managers and commissioners have a big role to play. First and foremost, it is the responsibility of hospital managers to ensure that the facility is well equipped with relevant clinical technologies and sufficient medical personnel to meet the rising demand for healthcare. In addition, the manager ought to ascertain that at any given time, the hospital is adequately prepared to handle any unforeseen public health emergencies or disasters. These internal arrangements must be incorporated in the annual operational plan of the hospital within a specified budgetary allocation towards achieving universal access to quality and affordable healthcare outlined by WHO (Gottret & Schieber 2006). The second role of hospital managers is to make certain that the hospital has sufficient facilities and supplies to cater for all groups of clients. The hospital should be in a position to meet the needs of both the outpatients and inpatients. It should also possess the ability to offer quality healthcare to people with special needs including nursing women, children, critically ill patients, immune-compromised persons, the elderly and the terminally ill or cancer patients as stated by the World Health Organization (2000, p.109). Hospital managers should therefore balance the internal budget of the hospital to ensure that each group of patients is taken care of within the available resources. The first two roles outlined above call for proper planning. This is the third role of healthcare managers. According to Kaufman (2007, p.18), healthcare planning is an integrated process that depends on practical experience, supporting data and available resources. It also revolves around observed trends as well as anticipated projections that require advance preparations. Managers at the local level base their decisions on available statistic and information collected from various healthcare providers at the local level. The same information is analyzed and sent to the regional and national level for reviewing. Plans and decisions made at the local level are sent to the regional board that consolidates all statistics for the entire region to make relevant conclusions and recommendations (Gottret et al 2008). The accuracy of public health statistics and the relevance of regional healthcare plans start with the hospital managers at the grass root level of NHS. These managers are accountable for every dollar spent since the money is always allocated on the basis of information generated from hospitals under the control of hospital managers. NHS commissioners also depend on such information to allocate funds and other healthcare resources. Hospital managers also oversee collection of revenues and returns on capital through the cost sharing healthcare plan as noted by Abrams et al (2012, p.89). Patients pay a certain minimum amount for services offered in public hospitals or for those services that are government-sponsored but are also offered by private practitioners in the case of public-private system. Therefore, it is the role of hospital financial managers to ensure that the revenues are well utilized in line with the operational plans and healthcare needs of the local population as accentuated by Kaufman (2007, p.19). In the case of settling reimbursements claims, healthcare trusts and insurance providers greatly depend on the hospital records provided by healthcare managers. These records should be as accurate as possible to depict all the details pertaining to a given patient and the costs incurred on treatment services offered. This is the only way to attain equity in healthcare financial management and utilization in line with the best expectations of all stakeholders (Zelman et al 2009, p.136). To that end, hospital managers must appreciate the importance of clinical coding Clinical Coding and Measuring Cost of Cancer Care According to Tatham (2008, p372), clinical coding refers to the process of transcribing specified medical information into universally recognized codes that define the hospital experiences of a patient in a summarized manners. Clinical cording enhances uniformity in recording and reporting the clinical details of the patient with reliable degree of accuracy pertaining to clinical presentation, diagnosis and treatment procedures. As such, there are two specific protocols used for clinical coding. These include the US oriented ICD-10 system and the UK-based OPCS-4 system (Lusignan 2005, p.90). Specifically, the UK uses both ICD-10 and OPCS-4 coding systems. The ICD-10 system was developed by the WHO with comprehensive codes for all possible reasons for which a patient may seek medical attention. In addition, clinical coding takes into account the reported complaints of the patient, diagnosis, treatment, duration of stay and the time of discharge. For that reason, clinical coding provides valuable information for cost analysis and clinical assessment of the effectiveness of care and treatment (Gerald et al 2002, p.105; Stanfill et al 2009, p.648). Clinical coding information is also important in healthcare commissioning. The NHS uses data obtained from clinical coding records to analyses morbidity trends and projections. Such details are useful in madding evidence based decisions when commissioning healthcare resources. The same is helpful in considering equitable allocation of healthcare resources from high cost treatment needs as well as cancer care services (Warren et al 2008, p.891). Studies suggest that cancer morbidity trends have increased by more than 11% in the last ten years (Teffeteller & Kish 2012, p.83). This has in turn increased the burden of care as well as the cost of treatment using specialized therapeutic technologies. On the other hand, it is becoming difficult to accurately determine the exact cost of care associated with cancer cases. Trusts also depending on various practitioners to provide the information that can be used to claim financial reimbursements and settle insurance related medical bills. In that light, clinical coding makes it possible to access valid records with accurate details for computing the due cost of care and treatment especially in chronic aliments such as cancer (Fryback & Craig 2004). According to Stanfill et al (2009, p.650) contemporary healthcare commissioners have developed increased interest to reimburse the cost of cancer treatment based on results. This is entrenched in the new ‘Payment by Results’ concept. Hospitals are only reimbursed on the basis of the number of patient actually treated. Such costs are computed with respect to real time data obtained from clinical coding files of respective patient. By means of clinical coding, the NHS is also to analyze health trends including the burden of illness associated with cancer. In Singapore and the US, clinical coding has enabled respective NHS of these countries to assess to prognosis of cancer care in both public and private hospital facilities. The case practice is also picking up in France, Sweden and Germany where service providers are reimbursed a predetermined standard rate for cancer treatments offered to each patient (Warren et al 2008; Stanfill et al 2009). Different types of cancers are assigned differed codes that defined the rational of treatment and care. Besides, such codes also help in determining the average cost of care across the healthcare market. As such, clinical coding avails the basis of rational utilization of NHS financial resources to afford cancer patients standardized quality healthcare in both private and public hospitals as observed by Gorski (2012, p.4). Conclusion Despite the fact that the cost of cancer care and treatment remains high, hospital managers are working in collaboration with NHS commissioners to avail the best line of care in both public and private hospital. This new trend is based on the increased appraisal of clinical coding practices as well as the modern concept of standardized rate of Payment by Results. These allow case-mix planning and controlled financial allocations. That notwithstanding, various healthcare systems still advocate for rational choice of health-seeking behaviour in which increased healthcare expenditures attract additional copayments out-of-pocket. The idea promotes competition in the healthcare market without compromising the quality of health care services. The UK should therefore consider adopting an efficient practice of Payment by Results anchored on a public-private healthcare system. References Abrams, N, Cummings, S & Hage, D 2012, ‘Clinical care paths: a role for finance in clinical decision-making’, Healthcare Financial Management, vol.66, no.12, pp.86-91. 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