The U.S. health care system also has several different mechanisms by which
funds for health services are obtained. These U.S. health financing options
include out-of-pocket money at the point of service from those who use health care, taxes, and insurance premiums (see Figure 1.2). Each of these is discussed
in greater detail, but for now it is important to simply distinguish the difference
between health financing and health economics; health economics
is a broad term that refers to overarching questions about the allocation of
scarce resources, whereas financing is a narrower term that relates to how the
money for services is generated in the first place.
Reimbursement: How Are Providers of Health Care Paid?
These two concepts, economics and financing, differ still from another key
concept, reimbursement. Reimbursement refers to the money paid to providers
of care for services delivered and is discussed later in this chapter as
well as throughout this text. Financing refers to how the financial resources
(money) for health services are raised, and reimbursement refers to what and
how providers are paid for providing those services. You can think about this
as money going into a bucket (financing) and money later being poured back
out to pay for services used (reimbursement). Those providing reimbursement,
that is, paying providers for the delivery of health services, are aptly
called payers. As used in health care, the term payers includes commercial
insurance companies and state and federal governments, termed governmental payers, but not individuals paying out of pocket at the time of receiving a
health care service. This is an important concept and is developed in more
depth in the following section.