Chapter 21: Healthcare

Employers

________ can also make tax- free contributions to workers accounts if they choose.

Cons

________- Govt price ceilings not likely to control costs, doctors can hold strikes against low payments, etc.

Diagnosis related group

________ (DRG) system- A hospital receives a fixed payment for treating each patient; that payment is an amount associated with one of several hundred carefully detailed diagnostic categories that best characterize the patients condition and needs.

Healthcare

________ is one of largest US industries.

Defensive medicine

________- Doctors recommend more tests and procedures than are warranted medically or economically in order to protect themselves against malpractice suits.

Copayments

________- The insured pays, say, 20 percent of all health care costs and the insurance company pays 80 percent.

Deductibles

________- The insured pays the first $ 250 or $ 500 of each years health care costs before the insurer begins paying.

equity

Trade- off exists between efficiency + ________.

Tax subsidy

________- Federal tax policy toward employer- financed health insurance strengthens the demand for health care services.

maintenance organizations

Health ________ (HMOs)- Provide health care services to a specific group of enrollees in exchange for a set annual fee per enrollee.

Medicare Part D

________- Medicare enrollees can shop among private health insurance companies to buy highly subsidized insurance for prescription drugs.

National health insurance

________ (NHI)- The Federal government would provide a basic package of health care to every U.S. resident at no direct charge or at a low cost- sharing level.

Twin problems

Cost + access

Deductibles

The insured pays the first $250 or $500 of each years health care costs before the insurer begins paying

Copayments

The insured pays, say, 20 percent of all health care costs and the insurance company pays 80 percent

Normal good

Increases in income → Increases in demand for healthcare

Fee-for-service

Doctors paid separately for each service they perform

Defensive medicine

Doctors recommend more tests and procedures than are warranted medically or economically in order to protect themselves against malpractice suits

Moral hazard problem

Tendency of one party to an agreement to alter her or his behavior in a way that is costly to the other party

Tax subsidy

Federal tax policy toward employer-financed health insurance strengthens the demand for health care services

Play-or-pay

All employers would be required to either provide a basic health insurance program for their workers and their dependents ("play") or pay a special payroll tax to finance health insurance for uninsured workers ("pay")

National health insurance (NHI)

The Federal government would provide a basic package of health care to every U.S. resident at no direct charge or at a low cost-sharing level

Pros

Reduce administrative costs, patients choose own physicians, etc

Cons

Govt price ceilings not likely to control costs, doctors can hold strikes against low payments, etc

Preferred provider organizations (PPOs)

Require that hospitals and physicians accept discounted prices for their services as a condition for being included in the insurance plan

Health maintenance organizations (HMOs)

Provide health care services to a specific group of enrollees in exchange for a set annual fee per enrollee

Diagnosis-related-group (DRG) system

A hospital receives a fixed payment for treating each patient; that payment is an amount associated with one of several hundred carefully detailed diagnostic categories that best characterize the patients condition and needs

Medicare Part D

Medicare enrollees can shop among private health insurance companies to buy highly subsidized insurance for prescription drugs

Health savings accounts (HSAs)

Individuals can make tax-deductible contributions into their HSAs, even if they do not itemize deductions on their tax forms

Deductibles

The insured pays the first $250 or $500 of each year’s health care costs before the insurer begins paying

Copayments

The insured pays, say, 20 percent of all health care costs and the insurance company pays 80 percent

Fee-for-service

Doctors paid separately for each service they perform

Defensive medicine

Doctors recommend more tests and procedures than are warranted medically or economically in order to protect themselves against malpractice suits

Tax subsidy

Federal tax policy toward employer-financed health insurance strengthens the demand for health care services

Play-or-pay

All employers would be required to either provide a basic health insurance program for their workers and their dependents (“play”) or pay a special payroll tax to finance health insurance for uninsured workers (“pay”)

National health insurance (NHI)

The Federal government would provide a basic package of health care to every U.S. resident at no direct charge or at a low cost-sharing level. The system would be financed out of tax revenues rather than out of insurance premiums.

Preferred provider organizations (PPOs)

Require that hospitals and physicians accept discounted prices for their services as a condition for being included in the insurance plan

Health maintenance organizations (HMOs)

Provide health care services to a specific group of enrollees in exchange for a set annual fee per enrollee

Diagnosis-related-group (DRG) system

A hospital receives a fixed payment for treating each patient; that payment is an amount associated with one of several hundred carefully detailed diagnostic categories that best characterize the patient’s condition and needs.

Medicare Part D

Medicare enrollees can shop among private health insurance companies to buy highly subsidized insurance for prescription drugs

Health savings accounts (HSAs)

Individuals can make tax-deductible contributions into their HSAs, even if they do not itemize deductions on their tax forms. Employers can also make tax-free contributions to workers’ accounts if they choose. Earnings on the funds in HSAs are not taxable and the owners of these accounts can use them to pay for qualified medical expenses'