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I'm here with Professor Lawrence Baker at Stanford Medical School and well what we're going to talk about now is I just like the overview of the healthcare system what is the health care system yeah and who's in it and who's in it and what are they doing I think I could give a go at it go for and then correct me okay expose my ignorance okay so so clearly you know you have your kind of your providers that those would be your your doctors and and nurses and all the rest and high middle hospitals eat all kinds people okay so everyone who's providing health care so that's right over there so that's hospitals doctors pharmacies all the rest and then there they're providing the health care to someone yep so that those would be the patients let me do that in another color yep calm patients yes um sometimes you get details like people become patients after they need health care but some people just have a question they're not really patients they're just asking okay what would you call them then common population population or so just the population of the world of the country or whatever of people people and then on the other end then someone has to pay for this someone has been in detention for the most part this is insurers yep insurance companies in the olden days like if you go back a hundred years we didn't really have insurers we had patients and and providers and patients would if they had a question they had a concern they go to the provider they make some deal pay him some money do some service for them and work it out right we got insurance companies really only in the last hundred years maybe really starting in the US and maybe 1930 1940 they started to become popular so that's kind of a newer innovation and those three things work together and the general term and this is a word I've seen a lot and sometimes a little confusing because it's very close to payer is that you hear that kind of these pay yours yeah pay yours and that that would be including that's anyone who's paying for the paying for the service yeah that insurance companies would be included there right so we have become hate payer sometimes we call them health plans because they arrange for some of the care that people get and you know payers could be private private companies private insurance companies or they could be government rioters government insurance companies like Medicare and the insurance companies themselves they're not doing this you know just out of the goodness of their heart someone is paying them right and for the most part of the United States it tends to be employers so right so we made another arrow on your diagram here it would be from the population or maybe from the patients to the insurance beneath that provides the money for the insurance companies to use to pay for the provider so patients might buy an insurance company our by an insurance company by nation how live there very well there are a few right but patients might buy their own policy go buy an insurance policy pay them a premium directly right sure somebody collects that money or for most people they work for an employer the employer makes the arrangement to buy that insurance and then implicitly charges the population the patient's for that may be directly by having them contribute some of their salary or maybe implicitly by just reducing the amount of cash they give them every month and instead giving them this insurance I say so people do that and the other piece that's floating around in here is that in some cases the population pays taxes to the government all right and that then functions essentially as an insurer like the Medicare program where there's insurance provided to people it's paid for by taxes so there are different funds flows going around here but always money going from patients to insurers through employers right taxes by direct payments those insurers collecting the money and then paying for a bunch of the care that's provided by the providers right and that's the basic arrangement there's one more tiny piece which is then sometimes patients pay the doctors or the hospitals directly yeah there you go you have a twenty dollar co-payment right and so there's a small payment that goes back and forth your copay is kind of there just so that it kind of makes the insurance company feel good that you know it's just using it willy-nilly that you have to pay your you know whatever $10 or $50 absolutely so sure's know that once they start paying the providers for the care and the patient says totally free people might use stuff that you know might might be worth a little tiny bit but it costs a lot for everybody to pay for so if you put a co-payment on there makes people think twice about using things that they don't really need right now it makes complete sense and then within this ecosystem you know we hear a lot about HMOs that my perception is that's a combination of the insurance company and the provider it's kind of in one package right so over time the US has had different kinds of insurers now they're in the private market especially there's been a lot of innovation in the last 3040 years and types of insurers that are out there so we have different insurers that have behaved in different ways as we've gone through those evolutionary cycles so one version of that is what we call an HMO a health maintenance organization and that's really just jargon you have to dig into it to figure out what I means but in a lot of cases what that is is an insurer company that acting as insurance so you pay a premium to them if you're a patient right person and you buy some coverage and then they'll cover your care but they'll do that by trying to integrate themselves with the providers right the organization's either are integrated because the HML hires doctors directly or maybe owns the hospitals like Kaiser Permanente for example right or in some cases it's a contractual relationship all right exactly this so not all Amara is tightly linked to like a Kaiser where it's like you go to you go to this building that says Kaiser on it and that's where your doctor is it could be doctors just have their practices but they're tightly linked with a I think I found what blue shield or one of those yeah Blue Shield or Aetna or sect of some of these different companies and you can start to dig into the details and everyone will be a little bit different right yeah under contractual relations and the difference is I think this is something everyone faces when they you know sign up with insurance with their employer I had to do it recently is you know they also you have to pick HMO versus PPP vs. PPO and then within the same policy and so my perception is HMO is they you have a you have a set list of doctors that I'm probably pre-negotiated pricing with yeah so the difference between HMOs and PPOs get some you gets a little bit into the Deegan okay I don't want to get too we can we can sort of think about it in the way talking about it so an HMO will have a list of doctors that you're supposed to supply and you'll have to go see doctors on that list in the stereotypical one if you don't see the doctors on that list the insurance company's not going to pay for right here you're going to provide self and in a stereotypical HMO there's going to be a fairly tight management between the Orions company the doctors about what's going on what's allowable and so on and in the most tightly Blinn case they'll be like the same they'll be not staying employed by the company right that's like right Kaiser as you kind of think about it as a spectrum if you move a little bit away from that to a PPO what's happening at PPO is you're still going to get a list right you're going to be encouraged to see those doctors but maybe there'll be a little more flexibility all right you decided not to see someone on the list the plan would still pay some amount maybe not as much as they would if you saw someone on a list but something whereas in an HMO may be nothing and the plan will probably work a little less hard at managing what those doctors are doing to try and limit access to say high-cost services HTML tend to work harder PPO tends to arrive less hard so it's a little bit of a spectrum you're kind of moving from more managed in more traded to a little less managed but still more so than the system we had say in the 50s or 60s where anybody went to any doctor and any doctor did whatever they wanted and the insurance company just paid the bill and there was no I integration so it's a little bit of us so that's the main motivation why insurance companies are trying to get kind of more more integrated with the providers is because just like you said in the in the 50s and 60s you have the provider providing a service and obviously the patient would like the service and then you have a third party paying for it and so there's no check on the person deciding on the service and person getting it says yeah let's get more service and someone else is right and right that's just so we created a big issue insurance companies are kind of an interesting thing in a health policy world because we we have to have them or I have to have them to manage the risk associated with getting sick you get sick I then get a huge bill and so we can't leave people on their own for that we gotta have insurance companies but as soon as you create insurance companies and I can have implicitly all my neighbors pay for the healthcare that I want right then I might start using things that turn out to be inefficient and so you gotta you've got to have them insurance companies but you got to manage what happens when you have them also and so that's the integration between providers or co-payments and utilization review and all these things are basically attempts by insurance companies to try and manage what economists would call the moral hazard that using additional services that you don't necessarily need because everybody else is going to pay for it for you it makes makes complete sense oh well thanks that makes a ton of sense