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Learning Objectives


  • Discuss the perspectives of patients, employees, employers, providers, and insurers in health insurance.

  • Determine the role of employment and employers in healthcare insurance.

  • Discuss the regulation of healthcare insurance.

  • Compare and contrast types of private and public healthcare insurance.

  • Identify the challenges presented to managers by the underinsured and the uninsured.

  • Analyze the healthcare insurance issues presented in a case study.

  • Identify contemporary challenges in the payment for healthcare services.


Healthcare is a business, and, in many ways, its management parallels the management of all businesses. On one hand, finances, human resources, capital equipment needs, the control of costs, and the generation of profits are just as much a part of the business of healthcare as they are the substance of other businesses. On the other hand, the business of healthcare is unique because of its purposes— healing injuries and preventing, managing, and curing diseases—as well as the complex manner in which healthcare is conducted and paid for. A patient (with an employer if applicable), an insurer, and a healthcare provider (person, organization, system) make up the basic unit of healthcare business.

Proceed to Activity 4.1 and take the pre-test to determine your current understanding of health insurance. Refer to the Glossary at the Centers for Medicare & Medicaid Services (CMS) website for definitions of any unfamiliar healthcare terminology as you read this chapter (see Web Resources).


  1. Who pays for your health insurance? Who are all of the beneficiaries on your insurance plan? Parents? Spouse? Children?

  2. What kind of health insurance plan do you have? Preferred provider organization (PPO)? Health savings account (HSA)? Other?

  3. How much is the deductible? How much are the co-payments? What is the maximal annual or lifetime allowance on the policy? Do you have prescription drug coverage? Does the plan include payment for physical therapy services? What other services are covered?

  4. On your (or anyone's) payroll stub, which payroll deduction is greatest: Federal Insurance Contribution Act (FICA for Social Security)? Medicare Payroll tax? Your health insurance premium contribution? What is the employer's contribution to your insurance plan?

The basic unit of healthcare is considered in a presentation of the key components of the Patient Protection and Affordable Care Act (ACA) of 2010. This analysis adds to the understanding of the complexity of U.S. healthcare through the perspectives of patients, employers, providers, and insurers on healthcare access, costs, and quality.

Patients' Perspective

The business of healthcare places the patient in an unusual consumer position. When receiving healthcare services in any setting, or when purchasing medications, durable medical equipment, or other supplies, patients must contend with several intervening influences. The simple exchange of money for goods and services, which is the basis for any other business transaction, becomes complicated in healthcare. Rather than directly ...

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