20 Jun 2022


Health Insurance and Reimbursement

Format: APA

Academic level: Master’s

Paper type: Research Paper

Words: 1239

Pages: 4

Downloads: 0

There are as many as 5000 hospitals in the United States equipped to meet the health needs of a diversified population whenever they arise. The majority of the facilities offer medical and surgical care for short-term illnesses. However, the services provided differ across hospital systems and sometimes under the same roof. Quality care and safety are among the elements considered during service provision. The American Hospital Association (AHA) advocates and serves all hospitals, health care systems, and patients and communities. Comprehensive health insurance covers have improved the well-being of marginalized groups by making health services available and affordable. Sadly, hospitals’ effort to provide care to all groups has been sabotaged by a fragmented health care system which leaves a significant population uncovered ( Bai & Anderson, 2016). The situation has forced hospitals to adopt daily balancing strategies which are not allowed by the federal laws and regulations. According to AHA, the paper presents the six groups of hospitals, the primary mission of each group, sources of funding, and payment rate mechanisms. 


Health care facilities in the US are divided into various sections based on size, location, finances, demographics, affiliation, and services provided. 

It’s time to jumpstart your paper!

Delegate your assignment to our experts and they will do the rest.

Get custom essay

Community Hospitals 

Community hospitals account for over 80% of the total health care facilities in the country. About two-thirds of the hospitals are situated in large cities. Some facilities offer general care while offering specialized care such as orthopedics ( Liu & Kelz, 2018). The facilities have as few as six beds and more than 500 depending on their sizes. Community hospitals can be categorized into non-teaching, major, and minor teaching. Non-teaching facilities are characterized by well-trained professional staff and focus on providing quality care to the community rather than research and medical training. Significant and minor teaching hospitals have ongoing research projects and trials and teach future practitioners about them. The primary mission of community hospitals is to offer quality and cost-efficient care to all groups. These hospitals target all patients around a given geographical location; however, the groups not covered by Medicaid are the primary targets ( Jiang et al., 2013). Minority groups are unable to access quality care due to health disparities. 

Community hospitals are funded through Medicaid payments, Medicare reimbursement, grant revenues, and other finances from public and private sectors. Medicare uses Inpatient Prospective Payment System (IPPS) and Outpatient Prospective Payment System (OPPS) to reimburse the payments ( Ishii, 2012). Government spending on Medicaid varies from 50-78%, while Medicare receives 14%. Charges relative to cost vary across community hospitals depending on the players involved. In Medicare and Medicaid patients, the US Congress and state governments set the payment rates, respectively. Private insurance companies are allowed to negotiate payment rates with the hospitals. 

Federal Government Hospitals 

As per the American Hospital Association, there are about 208 federal government hospitals which accounts for 3% of the total hospitals in the country. These healthcare facilities provide routine medical and surgical services. They are managed by the Department of Health and Human Services, Department of Defense, and the Veterans Health Administration ( Liu & Kelz, 2018). Federal government hospitals through the US Department of Health and Human Services (HHS) aim to enhance Americans' health and well-being by promoting sustainable advances in medical science, social services, and public health. Disadvantaged groups are given priority in accessing care services. Federal hospitals are funded through Medicaid programs, Medicare programs, private insurers, and out-of-pocket finances from insured and uninsured individuals. Medicare accounts to about 14% of the total government spending on Medicare. Medicaid expenditure varies between 50%-78%. Payment rates are determined by the market and non-market forces ( Ishii, 2012). Centers for Medicare and Medicaid Services (CMS) create fee schedules via the Prospective Payment Systems (PPS) for outpatient, inpatient, and other care services. 

Non-Federal Psychiatric Care Hospitals 

Non-federal psychiatric hospitals are short-term facilities that offer diagnostic and therapeutic services to patients with mental problems. They account for about 6% of the total hospitals. There are over 400 private hospitals of the kind serving unique mental complications presented by clients. Common conditions diagnosed and treated include substance abuse disorder and depression. Like the American Psychiatric Association, these facilities focus on providing high-quality care services to people suffering from mental complications such as substance use disorder and support to their families ( Liu & Kelz, 2018). Primary targets young adults and adults. Non-federal psychiatric hospitals are funded by patient pay, insurers, or foreign embassies. As per the Health Insurance Coverage statistics of 2019, private health insurance accounts for two-thirds of the insured population. The amount allocated by foreign embassies varies depending on the specifications of a given non-federal psychiatric facility. 

Non-Federal Long Term Care Hospitals 

Patients with severe acute problems in non-federal hospitals are referred to non-federal long-term care facilities. Patients are provided with quality inpatient care and can stay for longer than 25 days ( Liu & Kelz, 2018). There are about 400 long-term care hospitals, 4% of total hospitals in the country. The primary mission of these hospitals is to provide quality inpatient care to individuals with severe acute problems. Patients with more than one acute severe complication are the primary target of non-federal long-term care hospitals. In most cases, long-term care facilities are financed by public donors through Medicaid and other insurance covers. Medicaid receives over 60% from public donors. Funds from out of pockets and the private sector account for about 22% and 12%, respectively. Payment rates are determined by the Prospective Payment Systems, which considers aspects such as the care given and period stayed by the patient ( Ishii, 2012). 

System or Network Hospitals 

According to AHA there are over 600 network hospitals in the US, 9% of total health care facilities. They consist of either single diversified hospital systems or multihospital owned, leased, or managed by a central body. Members of a network are operated independently; however they collaborate to produce quality care services. Network hospitals aim at providing safe and quality pre-acute and post-acute services. These hospitals target patients who wish to receive more significant experience and satisfaction. The government funds network hospitals through Medicaid and Medicare programs, private health insurers, and willing donors. Medicaid gets over 50% of the allocated resources while Medicare over 10%. Prices charged are based on CMS's evaluation of resource and labor input of different medical services recommended by the American Medical Association ( Ishii, 2012). 

Profit and Non-Profit Hospitals 

These are either federal or non-federal health facilities. Most hospitals, 52% in the US, are non-profit, while 42% offer services to gain returns. Despite having different motives, both profit and non-profit healthcare facilities are evaluated using the same metrics. However, the mission of these facilities varies. Non-profit organizations aim to provide quality care at a cost-efficient price, while profit organizations strive to deliver improved care to gain returns. Patients with both acute and severe conditions are targeted. Non-private organizations are funded by private health insurers, individuals, and the government through Medicaid and Medicare programs. An individual finances profit organizations through self-pay and private health insurers. Medicaid receives over half of the allocated funds in non-profit health organizations. Payment rates are hinged on the Prospective Payment System which considers market and non-market forces ( Ishii, 2012). 


The American Hospital Association advocates for and serves over 5000 hospitals, healthcare systems, patients, and communities in the US. Accordingly, there are six groups of hospitals which offer various services to diversified populations. These hospitals have similar and different objectives, target groups, sources of finance, and payment rate mechanisms. They include; community, the federal government, non-federal psychiatric, non-federal long-term care, network and profit, and non-profit hospitals. Rate payments across all types of the hospital are determined by the Prospective Payment System (PPS). Community hospitals account for over 80% of the total population. They aim at offering improved care to a diversified population. Community hospitals are financed through Medicaid payments, Medicare reimbursement, grant revenues, and other finances from the public and private sectors. Federal government hospitals account for 3% of the hospital population. They aim at providing sustainable care to disadvantaged groups. They are funded through Medicaid programs, Medicare programs, private insurers, and out-of-pocket finances from insured and uninsured individuals. For non-federal psychiatric care facilities, 6% of the hospital population focuses at offering quality care to mental ill patients with acute complications. These organizations are financed by patient pay, insurers, or foreign embassies. Non-federal long-term care facilities account for 4% of the population. They focus on providing quality care services to patients with severe acute problems. Sources of funds emanate from public donors through medical insurance covers. Network hospitals, 9% provide safe and quality pre-acute and post-acute care to a diversified population. Such organizations are financed by Medicaid and Medicare programs, private health insurers, and willing donors. Lastly, non-profit and profit hospitals are characterized by features from both federal and non-federal healthcare systems. 


Bai, G., & Anderson, G. F. (2016). US hospitals are still using chargemaster markups to maximize revenues.  Health Affairs 35 (9), 1658-1664. 

Ishii, M. (2012). DRG/PPS and DPC/PDPS as prospective payment systems.  Japan Med Assoc J 55 (4), 279-291. 

Jiang, H. J., Friedman, B., & Jiang, S. (2013). Hospital cost and quality performance in relation to market forces: an examination of US community hospitals in the "post-managed care era." International journal of health care finance and economics 13 (1), 53-71. 

Liu, J. B., & Kelz, R. R. (2018). Types of hospitals in the United States.  Jama 320 (10), 1074-1074. 

Cite this page

Select style:


StudyBounty. (2023, September 17). Health Insurance and Reimbursement.


Related essays

We post free essay examples for college on a regular basis. Stay in the know!

Vaccine Choice Canada Interest Group

Vaccine Choice Canada Interest Group Brief description of the group Vaccine Choice Canada, VCC, denotes Canada's leading anti-vaccination group. Initially, the anti-vaccination group was regarded as Vaccination...

Words: 588

Pages: 2

Views: 146

Regulation for Nursing Practice Staff Development Meeting

Describe the differences between a board of nursing and a professional nurse association. A board of nursing (BON) refers to a professional organization tasked with the responsibility of representing nurses in...

Words: 809

Pages: 3

Views: 191

Moral and Ethical Decision Making

Moral and Ethical Decision Making Healthcare is one of the institutions where technology had taken lead. With the emerging different kinds of diseases, technology had been put on the frontline to curb some of the...

Words: 576

Pages: 2

Views: 89

COVID-19 and Ethical Dilemmas on Nurses

Nurses are key players in the health care sector of a nation. They provide care and information to patients and occupy leadership positions in the health systems, hospitals, and other related organizations. However,...

Words: 1274

Pages: 5

Views: 77

Preventing Postoperative Wound Infections

Tesla Inc. is an American based multinational company dealing with clean energy and electric vehicles to transition the world into exploiting sustainable energy. The dream of developing an electric car was...

Words: 522

Pages: 5

Views: 357

Watson’s Theory of Human Caring Paper

Watson’s Theory of Human Caring Paper The very act of nursing entails the conjunction between two distinct human beings, the patient and the nurse. To excel in nursing, as opposed to becoming a good nurse, one needs...

Words: 1867

Pages: 6

Views: 122


Running out of time?

Entrust your assignment to proficient writers and receive TOP-quality paper before the deadline is over.