💲Health System Economics 💲

Piedmont Boss Man

Why should we care about health care economics?

• labor markets

• How providers are compensated

• price and utilization of drugs

• operating margins

• finances and opportunities

• threats to the current business model

True or false: % government-insured patients affects profits

true

True or false: consumers of the product are typically the direct payers for the product

false, they are not

how is healthcare different from what we learned in economics 101?

• difficult for consumers to be educated about the market

• Supply and demand work differently

• employer-based health insurance

• negotiation ability impaired by legislative

what are the 3 profit models

1. for profit

2. not for profit

3. government

Which profit model is usually publicly traded on stock exchanges

for profit

what is another way to call the not for profit model

tax exempt

majority of the health systems in the U.S are what type of profit model

not for profit

insurance companies, PBMs, retail pharmacies, pharma, minority of hospitals are examples of what the profit model

for profit

true or false: Consumer choice affects only unnecessary care

false; both unnecessary and necessary

services are affected by what factors

• emergencies

• limited providers

• complex care

about what % of services were “shoppable”

43%

what are examples of “shoppable” services

• uncomplicated births

• non-urgent procedures

• some oncology diagnoses

• non-urgent radiology tests in metro areas with competition

what percent of total spending is affected by consumer choice

3%

True or false: the provider and the employer do not communicate to each other

true

what are some insurance trends affecting health systems

• cost shifting to employees

• lower cash collections based on changing insurance plans

• less capital available for investment in new technology, equipment, infrastructure, expansion

• pressure to reduce operating expenses

_____ makes buying insurance more affordable

subsidies

what makes using insurance more affordable

cap on % of income having to spend on healthcare

reimbursement from CMS now is determined by ________

average sales price

what is the 340B drug discount program

• funded by pharma

• regulated by pharma and federal government

• deep discounts on outpatient drugs