American Healthcare System Vocab

Flashcards with vocabulary terms related to Health Policy and the U.S. Healthcare System.

Accountable Care Organization (ACO)

A provider-led, contract-based integration of various providers who come together and manage the full continuum of care for a fixed population.

Adverse Selection

A situation in which people with higher risk of adverse events are more likely to buy insurance than people with lower risk of adverse events.

Allowed Amount/ Plan Allowance

Maximum amount an insurance plan will base their payment for a covered health care service.

Balance-Billing

The practice of a healthcare provider billing a patient for the difference between what the health insurance “allows” and what the provider charges.

Biologic Drug

A pharmaceutical agent that is derived from or developed in living things.

Biosimilar Drug

A product that the manufacturers claim is highly similar in structure and function to an already FDA-approved biologic drug.

Capitated Payments

Healthcare providers are paid a fixed amount for each patient that they choose to care for or are assigned.

Charges

The dollar amount that the provider asks for particular services from the patient or payer.

Chargemaster

A list of the price of each service provided by a hospital.

Co-Insurance

A patient’s share of the costs of a covered health care service, calculated as a percent of the allowed amount for the service.

Co-Payment

A patient’s share of the costs for a covered service, as a fixed amount.

Cost (in healthcare)

Actual expenditures made for healthcare goods and services.

Commercial health insurance

Synonymous with Private health insurance, any insurance that is sold and administered not by the government, but private companies.

Community Rating

When risk is assessed for a group of customers, and premiums are the same for all customers regardless of their individual health risks.

Comparative Effectiveness Research

Direct comparison of existing health care interventions to determine which work best for which patients and which pose the greatest harms.

Cost-Sharing

A term encompassing patients’ share of paying for healthcare services, also referred to as “out-of-pocket” payment.

Covered Services

Healthcare services for which an insurance plan explicitly says it will provide at least some payment.

Deductible

The amount a patient owes for health care services your health insurance plan covers before the plan even begins to pay.

Diagnosis-Related Group (DRG)

Each diagnosis/type of illness is assigned a DRG. For each DRG, Medicare offers a fixed amount in reimbursement.

Detailing

The practice of marketing to prescribers by having sales representatives make presentations to them about the ‘details’ of their products.

Durable Medical Equipment (DME)

Equipment and supplies ordered by a health care provider for everyday or extended use.

Employer Mandate

Policy or law that requires employers to offer health insurance benefits to their employees.

Employer-sponsored health insurance

Health plan that is offered as a benefit to employees in which the employer contributes to the insurance premiums.

Ever-Greening

Strategy to extend monopolies over products that are about to expire.

Excluded Services

Healthcare services that a health insurance plan doesn’t cover or pay for.

Experience Rating

When risk is assessed for individuals based on their individual characteristics or past experience using healthcare, and premiums can be different for high risk and low risk individuals.

Externalities

Indirect consequence of production or consumption that affects a third party.

Fee-for-Service Payment

Payment model in which each healthcare service is paid for separately.

Formulary

A list of prescription drugs that an insurer will cover.

Group market and Group health insurance plans

The market in which private/ commercial insurance companies sell plans to the large groups, like employers.

Global Payment

Fixed total dollar amount budgeted annually for all care delivered.

Healthcare Delivery System

Organizations and professionals who actually provide medical care and the system of organization and process around their care activities.

Health economics

The study of people's values and behaviors related to health and health care and of the effectiveness and efficiency in the production and consumption of health and health care, using the theoretical and analytical tools of economics.

Health Insurance Exchange (HIE)

The Health Insurance Marketplace, or Exchange, offers standardized health insurance plans to individuals, families and small businesses.

Health Maintenance Organization (HMO)

A managed care health insurance company that employs or pays a network of providers and generally employs a capitation payment model. Patients do not have the choice to seek care from out of network providers.

Health Policy

A set of decisions, plans, and actions that are taken to achieve specific healthcare goals within a society.

Indications-Based Pricing

Pricing system in which drug manufacturers are paid more when treatments are used for indications for which they have higher value.

Individual Mandate

Policy or law that requires nearly everyone to have health insurance that meets minimum standards.

Insurance Premium

The amount you pay for your health insurance every month.

Iron Triangle

The trio of Access, Cost, and Quality in healthcare. If one or two are improved, inevitably the third compromised.

Managed Care Organization (MCO)

Health insurance company that controls the cost of treatment through various tools.

Marginal benefits and marginal costs

The benefit of an additional unit of good or service.

Market Exclusivity

Exclusivity rights granted by the FDA to a drug manufacturer upon approval of a drug to protect it from competition from generics or biosimilars for the same disease or indications.

Market Share

Portion of a market controlled by a particular company or product.

Maximum Out-of-Pocket Expense

The maximum dollar amount a group member is required to pay out of pocket during a single year.

Medicaid Expansion

Expansion of Medicaid eligibility to people with annual incomes below 138 percent of the federal poverty level.

Medical-Loss Ratio (MLR)

The proportion of revenues that a health insurer collects in premiums from its customers that it reimburses for medical services.

Medical Underwriting

The process of assessing the risk associated with providing health insurance coverage to an individual or a group or population.

Medicare Advantage (MA)

Medicare plans offered by private health insurance companies that provide combined coverage for Part A and Part B benefits and often Part D drug benefits.

Moral Hazard

Lack of incentive to guard against risk when one is protected from its costs.

Network of Providers

The facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services.

Non-group market or Individual health insurance plans

Insurance plans that are available for individuals or families to buy.

Non-Preferred Provider

A provider who doesn’t have a contract with your health insurer or plan to provide services to you.

Off-Label Prescribing

Prescribing drugs for indications for which they are not approved by the FDA and therefore not listed in their FDA drug label.

Orphan Drugs

Drugs developed for diseases with small numbers of patients.

Patent

An intellectual property right that is granted by the U.S. Patent and Trademark Office to the inventor, developer, or discoverer of a specific intellectual property.

Patent thicket/cluster

Dense portfolio of patents to cover a single drug.

Payers

Organizations that finance health care, by reimbursing providers for their services, or other schemes of payment like capitation or bundled payment.

Pay for Performance

Financial reward system for employees where some or all of their monetary compensation is related to how their performance is assessed relative to stated criteria.

Pay-for-Delay

Practice whereby a drug company with a branded product pays a generic competitor to stay out of the market after the market exclusivity for that brand expires.

Payment or Reimbursement

The amount that payers actually pay to providers for their services.

Pharmaceutical Benefits Manager (PBM)

Middle-men in the drug delivery chain.

Point-of-Service (POS) Plan

HMO/PPO hybrid; sometimes referred to as an openended HMO when offered by an HMO. POS plans resemble HMOs for in-network services.

Preferred Provider Organization(PPO)

An indemnity plan where coverage is provided to participants through a network of selected health care providers

Premium Subsidies

Legislation included in the Affordable Care Act provides premium subsidies on a sliding scale to eligible individuals and families with incomes up to four times the federal poverty level.

Price (in healthcare)

The dollar amount that providers set for their services, like what hospital charges for a hospitalization for pneumonia or the physician fee for a routine office visit or the fee for performing a CT scan.

Private pay or direct pay

Payment from patients for healthcare directly rather than going through insurance.

Product Hopping

Tactic by which brand name pharmaceutical companies can try to obstruct generic competitors and preserve monopoly profits on a patented drug by making modest reformulations that offer little or no therapeutic advantages.

Progressive Tax

A tax in which the tax rate increases as the taxable amount increases.

Prospective Payment System

This system reimburses a predetermined, fixed amount based on the service provided and classification of that service (DRG).

Providers

Organizations and individual practitioners who are licensed to provide care for patients.

Quality

Safe, timely, effective, efficient, equitable, and patient-centered.

Quantity (in healthcare)

The volume or ‘utilization” of health service use (e.g., the length of stay in an intensive care unit, or the number of visits to an orthopedic surgeon).

Rebates

Money that is paid back by manufacturers to certain buyers of their drugs, such as Medicaid, or as part of price negotiations.

Redistribution of Wealth

Transfer of wealth from some individuals to others by means of a social mechanism such as taxation, charity, welfare, land reform, tort law etc.

Reference-Based Pricing

A cap is set on the price that is paid for a drug or service based on the price of a similar or “reference” product

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.

Reinsurance/Stop Loss

A reimbursement system that protects insurers from very high claims.

Relative Value Unit (RVU)

This is a number value assigned by Medicare's RBRVS system to each service or procedure that physicians provide based on the time, skill, malpractice cost, and other physician-level factors for each service.

Resource-Based Relative Value Scale (RBRVS)

A system for determining Medicare fee schedule introduced in the 1990s.

Single Payer

System in which a single public or quasi-public agency organizes health care financing.

Socialized Medicine

A system in which both provision of healthcare and the payment for healthcare is operated by the government and financed through taxes or other government revenue.

Specialty Drugs

Prescription drugs that are classified as high cost, high complexity, and/or need a high level of service.

Triple Aim

The simultaneous pursuit of improving the patient experience of care, improving the health of populations, and reducing the per capita cost of health care.

Underinsured

Describes individuals who have some insurance coverage, but it is inadequate for their needs.

Uninsured

Describes individuals who have no insurance coverage, and end up being obligated to pay for all healthcare costs out-of-pocket

Universal Healthcare, Universal Coverage, or Universal Access to Healthcare

Refers to a status when all individuals in the state or nation have access to health care, usually through insurance or coverage that pays for care.

Utilization Review/Management

The evaluation of the medical necessity, appropriateness, and efficiency of the use of health care services, procedures, and facilities under the provisions of the applicable health benefits plan.

Value

Defined as quality divided by costs. Value can be improved by increasing quality and/or decreasing costs.

Value-Based Payment

Value-based insurance design aims to increase health care quality and decrease costs by using financial incentives to promote cost efficient health care services and consumer choices.

Value-Based Pricing

Setting a price for a drug based on the value or outcome it provides.