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45 Cards in this Set

  • Front
  • Back
What is the health care system?
A network of producers, providers, insurers, payers, and users that interact for the purpose of supplying and demanding health care.
Rugged Individualism
Pockets of providers, self-pay system:providers able to set the price.
Managed Care
A more structured network of providers that is formed to offer cost-effective services.
Prepaid health plan in which enrollees pay a fixed fee often with co-payment for designated health services.
Contracted network of physicians, hospitals, and other providers organized by an insurance carrier to provide health care. Offers more choice of providers than an HMO.
Carve out the pharmacy benefit from primary health insurance plans.
Mandated pharmacists to offer to counsel Medicaid patients on outpatient prescription drugs. Also required pharamcists to document patient counseling and offer DUR activities.
The monthly fee the employer group must pay to purchase the health insurance benefits.
The process of projecting financial risk.
Provider receives a fixed monthly fee for providing covered services based upon the number of enrolled memebers that are assigned to a provider. Receive the same monthly fee no matter how many times the members see the providers. Provider shares risk, more likely to use generics/formulary drugs.
Gatekeeper physician
HMO memeber must select a primary care physician that has the responsibility of coordinating all care for that patient.
Discounted fee for service reimbursement
Provider receives payment when a provide a service. Reduce cost per service and the reamining amount is in a reserve to be paid out if objectives are met.
Trends in national health care spending
Private payers played a greater role in slowing spending than public. Drug spending grew more slowly for all payers. Medicaid=largest spender. Growth in use of generics, increased OTC use, mail order dispensing, decrease in generic copays
Perfectly Competitive Market
Many buyers and sellers, freedom of entry and exit, homogenous goods, full/free info. No single buyer/seller has control over the price.
Exist one seller in the market. Competition from other products depends on the extent to which other products are substitutes.
Monopolistic Competition
Most firms face relatively close substitutes and the commoditites are not completely homogeneous. Product differentiation exists. Demand/cost curves are the same for all firms in the group.
Small number of firms, great deal of interedependence. Each firm formulates his policies with an eye to the effect on rivals. Any change in the firm's price/output influences the sales/profits of competitors. Can be differentiated.
Situation in which there is a single buyer.
Assumptions surrounding an agency relationship
1.both players are motivated by self-interest, Effort. 2.functions in conditions of incomplete info. 3. differ in amt. of risk willing to assume. 4.assumes that outcomes of agents actions are influenced by enviro. factors.
Hidden information problems or problems of adverse selection
Principle doesnt know if the agent is capable. (get certification).
Hidden action problems, moral hazard problems
agent may not perform actions the principal desires becuase of conflicting goals, differences in risk preference. develop a relationship with agent to help.
Solutions to agency problems
invest in monitoring activities, reward agents if a certain outcome is achieved
Group Rating
Actuary estimates amt. of risk and can adjust reates for a specific subset of insured individuals, usually an employer group, based on the group's experience the previous year.
Community Rating
Actuaries adjust estimates based on the insurance companies overall expenses for a specific geographic area during the previous year.
Self-funded insurance.
Company decides to put a large sum of money into a restricted account that can be used to pay for health insurance. rare-very risky.
Elimination Period
avoid adverse selection by not covering pre-existing health problems until after the policy holder has been covered for a certain amt. of time.
Trends in Employer Sponsored Health
decrease in coverage among employees, increase in employer premiums, increase in employee contribution
Indemnity Insurance
health insurers initially reimbursed subscribers not proviers for a portion of their medical expenses. Premiums of these plans rapidly increased due to the cost of processing claims.
Service Benefit
health care providers are paid directly by the insurance plan.
Federally Mandated Eligibility for Medicaid
Categorically needy:AFDC aid to poor families with dependent children, supplemental security income (SSI):poor and aged, blind, disabled. Qualified Medicare beneficiaries (QMBs) people who are eligible for medicare and have incomes below the FPL.
Innovative drugs, start at high price, graduallyl raise the price.
Initially at a low price to gain market share and then price is raised over time. Drugs w/limited therapeutic gain. Undercut competitors. Raise the price once brand loyalty is established.
"Me too" drugs
diff. in side-effect profiles, convenience, efficiency, efficacy makes them more attractive, worth more.
Trends in utilization of drugs
Increased utilization due to increasing age of the population, insurance coverage, availability of drugs.
Trends in retail prices of Rx's
41.6% increase from 1999-2005. Price growth consists of inflation and product mix.
Pharmacy agrees to the assigned price and cannot seek additional reimbursement from the patient.
Sliding Mark-Up Scale
Uses variable mark-up percentages or fees to calculate prescription prices. As cost increases, mark up decreases.
Usual and Customary Charge
the normal charge to self-pay patients.
Prospective Payment
Set rate in advance for certian diagnosis, diagnosis related groups.
Shared Savings
Proportional share of expected savings, if the patients costs are less than the fee.
relative value units, assign relative numeric values to health care services based on the complexity of the services and the amt. of time/resources it requires in comparison w/a standard reference.
resource based relative value scale. each service is evaluated in comparison to other services for the amt. and quality of the providers' resources required to provide the service.
Per Diem
fee per day paid for care, fixed rate.
Incentive payment
pharmacist's fee is based on a percent of the savings which the pharmacist generates for the payer.
ongoing study of the frequency of use and cost of drugs, from which patterns of prescribing, dispensing and patient use can be determined.