Healthcare Economics & Systems Worksheet

What does Medicare Part A cover?

Inpatient hospital care, skilled nursing facility (SNF), and hospice.

• Hospital insurance; does not cover long-term custodial care.

What does Medicare Part B cover?

Outpatient care, physician visits, preventive services, and durable medical equipment.

What is Medicare Part C (Medicare Advantage)?

Private insurance plans that combine Parts A & B, often with Part D, and may include extra benefits (dental, vision).

What does Medicare Part D cover?

Prescription drug coverage.

What is Medigap?

Private supplemental insurance that helps pay Medicare deductibles, co-insurance, and other out-of-pocket costs.

What is Medicaid?

State-run insurance for low-income individuals and families; eligibility and coverage vary by state.

What is CHIP?

Children’s Health Insurance Program — covers kids whose families earn too much for Medicaid but can’t afford private insurance.

Compare HMO vs. PPO.

• HMO: Requires PCP, in-network only.

• PPO: Flexible choice, no referral needed, higher cost for out-of-network.

What is an EPO (Exclusive Provider Organization)?

In-network only (like HMO) but does not require PCP referrals.

What is a POS (Point-of-Service) Plan?

Hybrid of HMO and PPO — requires PCP for referrals, but can use out-of-network providers (higher cost).

What is a High-Deductible Health Plan (HDHP) and how does an HSA help?

• HDHP: Low premiums, high out-of-pocket before coverage.

• HSA: Tax-free savings account for qualified medical expenses.

Define capitation in healthcare economics.

Providers are paid a fixed amount per patient per month, regardless of services used.

Define fee-for-service.

Providers are reimbursed for each service or test performed — incentivizes quantity over quality.

Define value-based care.

Payment linked to outcomes and quality of care; incentivizes patient satisfaction and reduced errors/readmissions.

What is utilization review?

Assessment of whether services provided are medically necessary and cost-effective.

What are FQHCs (Federally Qualified Health Centers)?

Clinics serving underserved populations, providing care on a sliding scale based on income.

What are HROs (High Reliability Organizations)?

Organizations that achieve consistently high levels of safety and quality despite complex environments — aim for zero harm.

What did the Affordable Care Act (ACA) accomplish?

• Expanded Medicaid in many states

• Guaranteed coverage for pre-existing conditions

• Marketplace with subsidized plans

• Young adults covered under parents’ plan until age 26

Match the following:

• PPO

• Capitation

• HDHP with HSA

• FQHC

• HRO

• PPO = Flexible choice, no referrals

• Capitation = Fixed amount per patient per month

• HDHP + HSA = High deductible with tax-free savings

• FQHC = Serves underserved, sliding scale

• HRO = High safety performance

True or False: Medicare Part C is also called Medicare Advantage.

True

True or False: CHIP only covers elderly patients.

False — it covers children.

True or False: High-Reliability Organizations aim for zero medical errors.

True

True or False: Capitation increases reimbursement based on number of services provided.

False — it pays fixed per patient regardless of services.

True or False: Medicaid is the same in every U.S. state.

False — each state sets its own rules.

Compare Fee-for-Service vs. Value-Based Care.

• Fee-for-Service: Paid per service, incentivizes volume, quality often overlooked, risk of unnecessary care.

• Value-Based Care: Paid for outcomes, incentivizes quality, patient satisfaction emphasized, requires tracking metrics.

Match the scenario to the correct Medicare Part:

• Prescription for insulin pens

• Home health nurse visit

• Inpatient hip replacement

• Monthly premium to private insurer

• Supplemental plan for deductibles

• Insulin pens = Part D

• Home health = Part B

• Hip replacement = Part A

• Private premium = Part C (Advantage)

• Supplemental = Medigap