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How does the US healthcare system differ from typical industries?
No direct buyer-seller interactions
Who are the main financial intermediaries in US healthcare?
Third-party payers
What 2 types of organizations play a major role in US healthcare?
Nonprofit sectors and Local organizations
What characterizes government oversight in US healthcare?
Heavy regulation
Is the US healthcare slow or fast in adopting new technology?
Slow
What role do third-party payers play in US healthcare?
Mediates between buyers and sellers which influences costs and access
Why is cost and quality measurement difficult in US healthcare?
Many sectors are nonprofit so standardization is difficult
What are 3 factors that make healthcare slow to adopt new technology?
Poor flow of information
Regulatory barriers
De-centralized organization
What 5 factors complicate US healthcare problems?
Lack of transparency
Strained patient-provider relationships
Administration costs
High costs
Aging population
How does moral hazard affect US healthcare?
Insurance reduces out-of-pocket costs, leading to potential overuse of services.
How does government play a dual role in US healthcare?
Acts as both a buyer (Medicare, Medicaid) and a regulator.
What are primary, secondary, and tertiary care?
Primary = General care
Secondary = Specialist referral
Tertiary = Complex hospital care
Who provides primary care?
Family physicians
General practitioners
NPs
PAs
What is an example of secondary care?
Surgery
Cardiology
Dermatology
Obstetrics/gynecology.
What are examples of tertiary care?
Cancer treatment
Neurology
Orthopedic surgery
Neonatology
What are the five components of the healthcare value chain?
SIPPD: Suppliers, Insurers, Payers, Providers, Distributors
Who are the 3 main payers in healthcare?
Government, Private Insurers, Employers.
What are the 3 roles of insurers in healthcare?
Manage risks
Process claims
Negotiate payments to provider
How do providers fit into the healthcare value chain?
Deliver care
(hospitals, physicians, pharmacies, clinics)
What is the role of distributors in healthcare?
Manage the supply chain
(wholesalers, logistics companies)
What are 2 healthcare suppliers?
Pharmaceutical and Medical device companies
What is the general flow of money in the healthcare system?
Payer → Insurance → Provider
How do innovations such as new drugs, devices, and treatments move in healthcare?
Supplier to provider
What is the Hsiao framework?
A model for understanding healthcare system interactions.
What are the five components of the Hsiao framework?
PRO - BF = Payment, Regulation, Organization, Behavior, Finances
Three primary sources of healthcare financing
Taxes, private insurance, out-of-pocket payments
3 ways healthcare providers are reimbursed
Fee-for-service
Capitation
Value-based payments
How does the Hsiao framework define healthcare organization, as seen in hospitals, clinics, and networks?
Structure of care delivery
What are 4 purposes of healthcare regulation?
Quality control
Safety
Licensing
Pricing
How does behavior impact healthcare? (3)
Patient adherence
Provider choices
Preventive care
How does financing influence healthcare organization? (2)
Structure and Availability of services
What are 3 benefits of regulations shaping provider behavior?
Safety
Quality
Prescription rules
What are the three levels of the nested ecosystem model in healthcare?
Micro system, Macro system, Societal system.
What does the micro system in healthcare focus on?
Individual patient-physician relationships
(health literacy, adherence, trust).
What does the macro system in healthcare involve?
Interactions between insurers, providers, distributors, and suppliers.
What does the societal system in healthcare consider?
Population health and social determinants (poverty, education, environment).
What is an accountable care organization (ACO)?
A group of providers coordinating care to improve quality and reduce costs.
What are 4 goals of an ACO (accountable care organizations)?
Provide care right time
Provide care right care
Reduce errors
Reduce costs
What 2 entities fund ACOs (accountable care organizations)?
Medicare and Private insurers.
What are 3 major challenges of ACOs (accountable care organizations)?
Implementation
Provider buy-in
Data sharing barriers
What are the three aims of IHI’s Triple Aim?
(IHI = Institute for healthcare improvement)
Improve patient experience
Improve population health
Reduce per capita costs
What was added in IHI’s Quadruple Aim for healthcare providers?
(IHI = Institute for healthcare improvement)
Work-life balance
What was added in IHI’s Quintuple Aim?
(IHI = Institute for healthcare improvement)
Health equity
How can cost reduction efforts negatively impact healthcare providers?
Increased burnout
Why are social determinants challenging to address in healthcare?
Requires systemic change
What are the 5 key steps in the brand-name drug distribution model?
Manufacturer → Wholesaler → Pharmacy → Insurer/PBM → Patient.
What is the role of drug manufacturers in distribution?
Develop drugs, set list prices, sell to wholesalers.
What do wholesalers do in drug distribution?
Buy from manufacturers, sell to pharmacies, handle chargebacks.
How do pharmacy benefit managers (PBMs) affect drug pricing?
Negotiate rebates but may keep savings instead of passing it to patients
Why do brand-name drugs have high out-of-pocket costs?
Insurers calculate costs based on list prices, not discounted prices.
(list prices come from manufacturers)
What is a key criticism of PBMs regarding pricing and rebates?
Lack of transparency
How do PBMs limit patient medication choices?
Restrictive formularies
What market trend increases PBM control over drug pricing?
Vertical integration
How do PBMs contribute to high drug costs?
They keep a portion of negotiated rebates instead of reducing patient costs.
What are potential PBM reforms?
Increase transparency, pass savings to patients, ban spread pricing.
What is provider status for pharmacists?
Ability to bill insurance for clinical services.
What 3 new roles could provider status create for pharmacists?
Medication management
Chronic disease care
Preventative services.
What 3 services can pharmacists offer with provider status?
MTM
Vaccinations
Telehealth consultations
What are 2 challenges of pharmacist provider status?
Reimbursement
Training
What are the four main healthcare models?
Beveridge, Bismarck, National Health Insurance, Private Insurance.
Identify the following healthcare model
Funded by: Payroll-based insurance (mandatory employer & employee contributions).
Providers: Private hospitals and doctors.
Access: Universal but requires insurance.
Key Feature: Multiple non-profit insurance funds; government regulates but doesn’t run healthcare.
Bismarck
Identify the following healthcare model
Funded by: Taxes (government-controlled healthcare).
Providers: Government owns hospitals & employs healthcare workers.
Access: Universal, free at point of use.
Key Feature: Government directly funds and provides care.
Beveridge
Which 3 countries use the Bismarck model?
Germany, France, Japan
Which 3 countries use the Beveridge model?
United Kingdom, Spain, Italy
Identify the following health care model
Funded by: Public insurance funded by taxes.
Providers: Private doctors and hospitals.
Access: Universal, Single-payer system (one government-run insurance plan).
Key Feature: Government pays for care, but private providers deliver it.
National health insurance (NHI)
How does the USA incorporate all 4 insurance models?
Bismarck - Employers
Beveridge - Veterans
NHI - Medicaid and Medicare
Private/out of pocket model - Uninsured
What 3 countries use the NHI model?
Canada, South Korea, Taiwan
Which country has private insurance and higher healthcare costs, the US or Canada?
US
Which country has single payer insurance and longer wait times, the US or Canada?
Canada
How does US healthcare rank in the 'Mirror, Mirror' report?
Last place among high-income nations.
What is 'mortality amenable to healthcare'?
Avoidable deaths with timely medical care.
Give 3 reasons why the US underperforms in healthcare outcomes
No universal coverage
High costs
Inefficient primary care
What percentage of US GDP was spent on healthcare in 2022?
17.3%.
What are 4 key reasons for rising US healthcare costs?
High admin costs
Expensive drugs
Hospital pricing
Advanced technology
Since 1970, US healthcare costs increases from 7.2% to over _____ of GDP
17%
What percentage of US healthcare spending goes to prescription drugs?
18%.
3 Reasons why prescription drugs more expensive in the US
No government price negotiation
Patent protections
PBM rebates.
What percentage of US prescriptions are generics?
90%.
What are the four types of Medicare coverage?
Part A = Hospital
Part B = Outpatient
Part C = Advantage
Part D = Drugs
Who qualifies for Medicare?
65+ or disabled individuals.
What type of insurance is for low-income individuals, jointly funded by state and federal government?
Medicaid
What is Tricare?
Military healthcare system.
What health insurance plan require referrals?
HMOs
What type of health insurance plan allow more provider choice?
PPOs
What is an insurance premium?
Monthly payment for coverage.
What is a copay?
Fixed amount paid per visit or prescription.
What is coinsurance?
Percentage of costs paid by the patient.
What 3 types of drugs are covered under Medicare Part B?
Vaccines
Chemotherapy
Certain injectable drugs
What are the four main ways people pay for medications in the US?
Out-of-pocket
Private insurance
Employer-based insurance
Government programs.
How do insurers cover prescriptions differently from medical services?
Use formularies instead of coded billing.
What is a drug formulary?
A list of covered drugs managed by insurers.
What are 3 common formulary restrictions (restrictions that limits access to certain medications)?
Step therapy
Prior authorization
Quantity limits.
What is step therapy?
Patients must try cheaper alternatives before expensive drugs are covered.
What are 2 major Medicare drug cost changes take effect in 2025?
$2,000 out-of-pocket cap
Elimination of coverage gap.
Who may not benefit from Medicare's 2025 drug cost changes? (2)
Those with low drug costs
Medicare Extra Help recipients
What are 4 key reasons for high US drug prices?
Manufacturer pricing
PBM rebates
Patent protections
High research and development costs
Why do patents keep drug prices high?
Delays generic competition.
What percentage of US adults skipped a medication due to cost in 2022?
18%.
What are 3 consequences of high drug costs?
Non-adherence
Financial burden
Worse health outcomes
What is medication adherence?
Taking medication as prescribed.
