HHS Quiz 1

Cost-sharing

The act of sharing the cost of healthcare with an insurance company

Deductible

A fixed dollar lower threshold. Until the patient’s healthcare cost has hit this threshold, the patient must pay for everything out of pocket.

Copayment

A fixed dollar amount the patient must pay for certain services

Co-insurance

The percentage of a bill that the patient must pay for

Out of Pocket Maximum

The fixed dollar amount upper threshold. Once the healthcare costs have hit this threshold, the patient doesn’t need to pay for anything else.

Utilization Management

Needing proper documentation before the insurance covers anything (PA)

Churn

When up to 33% of patients leave insurances each year, the company feels like they paid for the patients care for no reason.

Pre-existing conditions

Forced insurance companies to pay for all of a patient’s care, even if they had preexisting conditions

Community Rating

Stopped insurance companies from increasing the premium costs based on current or projected health status

Lifetime Maximum/ Lifetime Limits

Stopped insurance companies from setting lifetime cost limits to healthcare

Medical Loss Ratio

The % of your premium that actually pays for your health (80-85%)

Essential Benefits

Requires all insurance companies to pay for the same few things

Medicare Part A

Inpatient insurance that covers hospital stays

Medicare Part B

Outpatient insurance to cover doctor visits

Medicare Part C

Private insurance that covers everything in Medicare and maybe more at a higher cost

Medicare Part D

Covers drugs

VHA

Veterans health administration that covers all healthcare for veterans and their families

Tricare

Covers all healthcare for active members, retires, and family members

HMO

Health Maintenance Organization that keep premiums low and deductibles high alongside choosing which doctors you should see

PPO

Higher premiums but lower deductibles/copays and you have more flexibility regarding who you see

High-Deductible Plans/ HDHPs

High deductible, lower premiums, and you get an HSA/FSA card

Employer-sponsored insurance/ ESIs

Pretty much what it sounds like

ACA Marketplace

A mall for insurance that isn’t tied to your work

Information Asymmetry

When patients don’t know a lot but their doctors do

Moral Hazard

When patients are okay with doing costly things since they know that insurance will cover for them

Adverse Selection

When people who are healthy stop paying for insurance, premiums go down while cost of healthcare (for the insurance company) goes up.

Costs

The cost of a doctors office to run

Charges

The charge a patient is requested to pay

Reimbursement/ Payment

The money the patient actually pays at the office

Rationing mechanisms

How much the treatment will extend or better a patients life, patients ability to pay, first come first serve, how well will the treatment work, of certain patient characteristics

Why is Healthcare not a real market?

There’s too many variables to the cost of health

Price Transparency

It’s hard to find out what your bill will be before you receive care

Conflicts of Interest

Doctors can act as an agent for a patient and as an agent looking for money

Anti-kickback

Stops professionals from doing unnecessary tests for the sake of money

Stark law

Stops doctors from sending medicare/aid patients to facilities they own or make money from

Tax subsidies

Provided to the employers and employees to purchase insurance distort on the market

Competition failures

People don’t get to really compare insurance’s properly so there’s no real competetion

Service obligations for charity care / EMTALA

Requires hospitals to care for emergencies regardless of a patients ability to pay

Fee for Service

Doctors get paid for treating patients

Alternative Payment Models/ Value-based Care

Pays the doctor based on the quality of their care

CPTs

Current Procedural Terminology: a code assigned to all medical services

DRGs

Diagnosis-related group: basically the math behind how complex and expensive a patient is

ICD-10 codes

International classification of diseases: basically a diagnosis code

RVUs

Relative value unit: determines the cost for medical procedures and services

Pricing and payment variability

There’s differences in pricing depending on where you go, and there’s differences in what the doctor expects to be paid vs what he insurance/patient will be paying

Risk-adjustment

Helps insurance companies determine what they expect to pay for a group of patients by seeing how sick they all are

Accountable Care Organizations

Entire organizations of doctors and hospitals dedicated to high value care and keeping the patient healthy

Networks and Consolidation/ Competition and pricing implications

More and more hospitals and doctors are joining networks, increasing the total cost of care

PBMs

The middleman between pharmacies, pharmaceutical companies and insuance’’s.

High-value Care

When care provides clinical benefit, better when the cost is lower.

Low-value Care

When care provides no clinical benefit but still costs money