The changing health care system, payment methods, and the development of advanced
practice nurses.
Linnea Cooper
Maria Jones has been a nurse practitioner since 1967. She is retiring this year and spent
some time reflecting over how far the profession has come along since she started. As a young
NP, Maria worked for a family practice doctor, which had its good and bad points. At the
beginning, she was a salaried employee, performing similar duties to the physician but getting
paid a fraction of the amount. It was in this beginning era that patients were being charged for
services performed by the NP, but the NP couldn’t bill them directly. Therefore, the employer
billed what they wanted and reimbursed the NP a fraction of that. Maria remembers how much
money the physician was making at that time, and thought it was wrong, but didn’t know what to
do about it. Now Maria works with other physicians instead of for them, and takes home the full
amount allotted for her from the bill. Upon reflection, Maria is overjoyed with the hurdles NPs
have overcome and where the profession is headed.
The health care system has changed and evolved drastically over the past century.
Policies have changed with the times, organizations have merged and been created, and the role
of the advanced practice nurse (APN) has developed. How we pay for healthcare also changed
over the years and how the APN works in this system and gets reimbursed has been redefined.
Beginning with the birth of blue cross and blue shield insurance companies, physician
and hospital payment systems were becoming distinct. As a result of this method of insurance,
blue cross enrollees inpatient costs were 50% higher than non blue cross patients because they
were now receiving highly technological services that were expensive that were not being used
previously (Sultz & Young, 2009b, p. 173). As health care costs increased during the 1950s, the
rate physicians charged also increased (Sultz & Young, 2009a, p. 219). Payments were largely
on a fee for service basis; therefore, physicians were performing many procedures in order to
increase their salaries. With the increase in costs, citizens of lower economic status and the
elderly were having increasingly difficult time paying for resources and were not receiving the
services they need.
In response, in 1965, Medicare and Medicaid were introduced to give coverage to this
population. It gave citizens over the age of 65 coverage and a range of benefits (Shi & Singh,
2009, p. 153). These initiatives were formed in order to assist with paying for healthcare;
however, this large group of people obtunded the system and facilities began to be short staffed.
The Vietnam War also left the US short on manpower, and there was starting to be a shift of
doctors from primary care to other avenues of healthcare. At the same time, the public was
demanding improved access and quality. This was an ideal time for NPs to start infiltrating the
healthcare system.
Throughout the next decade, changes were initiated that addressed some of these holes
and increased the awareness of the escalating costs of healthcare. In 1972, grant and contract
funds for experimental and demonstration studies of the reimbursement of nurse practitioners
began which assisted in a new law in 1977. During this time NP reimbursement in rural areas
came about as an addition to slow the rising cost of healthcare (Sultz & Young, 2009b, p. 179).
In the 1980s, health maintenance organizations (HMOs) and managed care came about at full
force with the anticipation of having the ability to provide good care while keeping healthcare
costs at bay (Shi & Singh, 2009, p. 155). These organizations took advantage of the low cost of
NPs and many worked under managed care and a fee for service basis. It was in structures like
these NPs began doing demonstration projects that proved their effectiveness. For the next two
decades, NPs would continue to prove effectiveness and work towards reimbursement.
Major changes in reimbursement began to take place for physicians and hospitals and the
NPs that worked for them. Diagnostic related groups (DRGs) came into play which ultimately
only shifted the cost of services from the hospital to the private insurance payer, instead of
directly reducing the costs of the services provided (Sultz & Young, 2009b, p. 181). There was a
fuzzy line of establishing cost vs. pay and the actual price was unknown. At this point hospitals
started monitoring length of stays (LOS) and focused on discharge planning, which would have
resultant problems. The length of stay of the patient became the gold standard for managing care
under the DRG structure of care (Sullivan, 2009, p. 205). The issue of expanding health care
costs was not met with this structure.
Although a dominant force and one of the primary structures for delivering care,
managed care has not answered the health care needs. Patients are being discharged to home
earlier and earlier so the hospital incurs less charges, and makes more money. This left sicker
than normal patients in the community. We also did not figure out if health care costs were
lowered or just shifted to the outpatient clinic (Sultz & Young, 2009a).
In the 1990s, there was a reengineering of delivery systems. This involved a decrease in
professional staff and management (Sultz & Young, 2009a, p. 229). This left the remaining
nurses doing more paperwork with less overhead and supervisors to assist them with nursing
issues. There is still a need for radical change in the US health care system as costs are still
increasing. NPs will need to find ways to improve quality outcomes, reduce cost, and enhance
quality of life in order to be able to practice successfully.
In 1997, the Balanced Budget Act was signed by President Clinton. This act allowed
nurse practitioners to bill insurance companies independently of physicians. Managed care
enrollment was expanded and copays and deductibles were becoming based on income to allow
more people access to health care and have them pay an individualized amount based on their
income (Sultz & Young, 2009b, pp. 188-189). This was a major step for NPs as their role was
beginning to be widely recognized and respected.
Despite initiatives to pay for health care, the issue of insuring those without has not been
addressed. Not having health insurance has consequences for everyone. It affects the ability for
that person to receive timely care, preventive care, as well as care for chronic and acute
conditions. Patients are seeking care at higher costs in emergency rooms instead of receiving
care at the primary prevention level (Sultz & Young, 2009b, p. 168). NPs can develop their role
in this setting. Providing primary and preventative care in the community setting before the
client develops the resultant disease will be necessary.
A similar trend is noted throughout history and the changing of the health care delivery
payment system. There has not been a direct cost reduction technique implemented, only cost
shifting and cost escalation. There has also not been a system implemented that effectively
increased insurance to a greater number of individuals or access to healthcare to these
individuals. Quality of care is another aspect that was not addressed by any of the previous plans.
Nurse practitioners will be developing their roles in this current scenario, at a time when we need
to decrease cost, and improve quality and access.
The competencies of nurse practitioners revolve around prevention of illness, promoting
a healthy living environment, and doing so in a supportive role. NPs also apply business
strategies to keep costs down and incorporate access, cost and quality into care. The current
health care environment is making the perfect position for NPs to take the lead in transforming
the system into a more primary and preventative care focused structure.
The current method for delivery of healthcare leaves a huge gap in preventative care.
Services like immunizations, weight loss and nutrition counseling, screenings, and emotional
supportive care is being neglected and is not covered under many insurance plans. In the mean
while, services that assist with secondary and acute care are predominantly covered, which in a
majority of the cases, are a direct effect of not having those preventative services. Where this gap
in health care lies is the perfect positions for NPs to fill in and take charge. This neglected
avenue is where NPs can change the system.
I believe this is the role that NPs will develop and grow in the future. There would be a
benefit for the majority of Americans if the health system would focus on this approach of
preventative care instead of the current system of acute care. The cost of acute care services, as
we have seen through history, is not feasible any longer and a change is needed. Many are not
getting the care they need and others are getting care they don’t need. A small number of people
acquiring services is not beneficial to the population as a whole. For a system to be beneficial to
all, it must be easy to access, reduced in price, and high in quality.
REFERENCES
Shi, L. & Singh, D. (2009). The evolution of health services in the United States. In A.M. Baker
(Ed.), Advanced Practice Nursing: Essential Knowledge for the Profession (pp. 129-162),
Massachusetts: Jones and Bartlett Publishers.
Sullivan, D.T. (2009) Managing financial resources. In A. M. Baker (Ed.), Advanced Practice
Nursing: Essential Knowledge for the Profession (pp. 203-218). Massachusetts: Jones
and Bartlett Publishers.
Sultz, H. & Young, k. (2009a). Managed care. In A. M. Baker (Ed.), Advanced Practice Nursing:
Essential Knowledge for the Profession (pp. 219-240). Massachusetts: Jones and Bartlett
Publishers.
Sultz, H. & Young, K. (2009b). Financing health care. In A. M. Baker (Ed.), Advanced Practice
Nursing: Essential Knowledge for the Profession (pp. 163-201). Massachusetts: Jones
and Bartlett Publishers.