Health Insurance: The Basics & Geographic Variations in Spending (PUBPOL 2350 - September 16, 2025)

Flashcards covering key topics from the Cornell University PUBPOL 2350 lecture on Health Insurance Basics and Geographic Variations in Spending, including details on the Tulane Health Policy Case Competition and IQVIA recruitment opportunities.

What main observation is made about Medicare spending across different geographic areas?

Medicare spending per beneficiary varies widely across geographic areas.

What is the national relationship between Medicare spending and the quality of care?

There is no relationship nationally between spending and quality; areas that spend more do not necessarily provide higher-quality medical care or produce better health outcomes.

According to Atul Gawande's "The Cost Conundrum" article, what was a key issue in McAllen, Texas?

Overutilization of medical services, leading to much higher spending compared to El Paso, with little evidence of better health outcomes.

What did Atul Gawande identify as the 'most expensive piece of medical equipment'?

A doctor's pen, indicating that healthcare costs primarily arise from individual decisions doctors make about services and treatments.

According to the "Dartmouth Group," what factor contributes to differing treatment styles among doctors?

Lack of scientific evidence creates uncertainty for physicians, leading to a belief that more care means better care.

How does the fee-for-service system influence medical spending according to the Dartmouth Group?

Physicians and hospitals are rewarded for being busy, incentivizing them to provide more services, especially where there are many non-primary care MDs and hospital beds.

What did a 2003 study by Fisher et al. find regarding high-spending regions?

High-spending regions have more capacity to provide care, including more hospital beds, teaching hospitals, and physicians per capita.

What is the "Dartmouth Atlas Conclusion" regarding the impact of increased medical care?

Some regions have gone past the 'flat part of the curve,' suggesting that eventually, more medical care may actually harm patients rather than provide additional benefit.

What percentage of U.S. medical spending was estimated to be wasted in a 2019 study?

An estimated 25% of U.S. medical spending is wasted.

What is the "Choosing Wisely" campaign?

An initiative by medical societies to convince physicians to reduce their use of common tests and procedures that have little to no value, aiming to distinguish wasteful/harmful medicine from useful medicine.

What are the primary drivers of higher health care costs across regions, as summarized in the lecture?

Greater availability of physicians and hospital beds in some areas, uncertainty regarding the best way to treat patients, and the belief that more care is better combined with financial incentives for MDs and hospitals to do more.

What are the two major benefits of health insurance for consumers?

Reducing financial risk and enabling access to medical care.

What is patient cost sharing at the point of care, and what are some examples?

Out-of-pocket payments made by an enrollee when receiving medical care; examples include deductibles, co-payments, and co-insurance.

What is a "pure premium" in health insurance?

The expected medical spending for a specific person or group of people with the same risk level (e.g., same age, gender, expected health conditions).

What is a "loading charge" in health insurance?

The amount an insurance company charges in addition to the pure premium to cover administrative costs, establishing provider networks, processing claims, marketing, and profit.

How does health insurance mitigate financial risk for individuals?

It protects against the financial burden of low-probability but very expensive medical conditions by spreading financial risk from an individual to a larger group, pooling resources among all enrollees.

What proportion of medical spending do the top 10% of users account for in a given year?

The top 10% of users account for 64% of medical spending.

Explain "community rating" in the context of health insurance premiums.

A system where the premium is the same for all people regardless of age, gender, smoking status, or health conditions; healthy people effectively subsidize sicker people.

Explain "experience rating" for health insurance premiums.

A system where the premium is based on a person's previous medical costs or their predicted costs based on specific factors like age, gender, health conditions, or health behaviors.

How are health insurance premiums generally set for most non-elderly Americans who receive insurance through their employer?

Employers are typically experience-rated (charged more for sicker employees), but most health insurers community-rate within a firm, meaning each employee pays the same premium, with young/healthy workers subsidizing older/sicker ones.

What percentage of non-elderly people in the U.S. receive health insurance through their employer?

57.5%.