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127 Cards in this Set
- Front
- Back
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Physicians Education
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•Undergraduate school- 4 years
•Medical school/osteopathic school-4 years o2 years classroom, 2 years clinical •Residency- 3-4 years oClinical work in hospitals/outpatient facilities •Subspecialty fellowships- 1-2 years oClinical work in subspecialty area (ex. Cardiology) •Most states require 20-50 hours of continuing medical education annually to maintain licensure |
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Decision Making
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• Base decisions on history, knowledge and availability of tests, patient requests
• Perfect agent model o Used under the traditional indemnity insurance, FFS o Physician acted in the patient’s interest and not the insurer’s o Ignores costs to society or insurer o Medical costs rose quickly |
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Supplying service
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• Target income theory
o Physician will induce demand and increase services in order to meet a target income level o May be limited in inducing demand because of moral concerns, consumer concerns, and peer pressure |
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Regulators
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• Regulators: state medical boards, Medicare/Medicaid, insurers, managed care plans
• Managers: practice partners, department chairmen, insurers |
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Financial controls
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• Traditional insurance programs
o Second opinion programs o Utilization review o PPOs- high quality care at a lower cost • PPO o Insurance company negotiates discounted fees with networks of health care providers in return for certain volume o Enrollees must pay more to go outside preferred providers • HMO o Insurer and provider of medical services in return for prospective per capita payments o Rewards physicians with profit sharing or bonuses for low costs o Imperfect agents may not provide enough services or increase patients Could cause to lost market share or reputation |
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Group Practice Single or multi-specialty groups
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o Share facilities, staff, equipment, records
o Income options: income plus share, FFS plus share, capitation per patient o Physician cannot take patients if leaves group |
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Group Practice Independent practice association (IPA)
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o Individual has own staff, records, offices
o Association useful in joint contracting with a health plan through discounted FFS arrangement |
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Group Practice Creation
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o Price competition between insurers and HMOs to enroll patients
o Increasing number of physicians gave HMOs power to contract o Could compete more successfully for contracts with HMOs and insurers |
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Group Practice Benefits
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o Internal systems
o Expertise in managing, best care practices o Spread risk over larger number of patients o Bargaining power over hospitals o Economies of scale o Demand increasing shares from HMOs and insurers |
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The Future of Physicians
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• Not clear if there are too many or too few doctors
• Specialists now providing primary care o Need more work for income o Patients have direct access to specialists now o Patients believe better care from specialists o Patients can save time and get continuity of care better • Poor geographic distribution o Physicians in urban areas because of lifestyle and career issues o Patients in low density areas have higher waiting times and lower access to specialists o Solutions Relation of training programs, use of telemedicine • Inadequate diversity o More likely that minority populations will not have access |
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New Roles • Inpatient specialist
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o Provide care for inpatients of office-based physicians
o More efficient because more familiar with hospital o Able to monitor and discharge more frequently o Don’t have outside patients |
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• Medical manager
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o Physicians with administrative training
o CEOs, medical directors, consultants o Can understand info between business professionals and physicians o Trust of both parties |
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Hospital Statistics
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• Decline in number of hospitals
• Technological innovations provide lower cost care outside of hospitals o Lower LOS o HMOs have lower LOS • Shift from inpatient to outpatient in past 10-20 years o Improved technologies, financial pressures |
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• Methods of paying hospitals
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• Methods of paying hospitals
o FFS: based on each test, procedure o Per diem rates: payment inclusive of all service for a single day o DRGs: Medicare, Medicaid; payment based on bundle of tests under a diagnosis • Chargemaster lists hospital’s prices for every single procedure and item |
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Medicare/Medicaid pricing
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• Medicare pricing
o Flat fee per hospital case, DRGs o Payments adjusted for variations or complex cases • Medicaid pricing o Flat fee per DRG (% of Medicare) o Flat per diem payments o Payments less than full costs |
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negotiated rates/uninsured
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• Negotiated rates
o Negotiated each year between insurer and hospital o Discounted charges, negotiated per diems, DRGs • Uninsured o Before paid full charges o Now means-tested discounts of chargemasters |
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Cost-reducing efforts
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• State control of what hospitals could charge was tried, but not successful
• Certificate of Need Laws (CON) o Set to perform CON reviews for all facility expansions, modernizations o Goal to eliminate unnecessary and duplicate investments o Scope: building a new facility, changing an existing, adding to existing o No impact on growth rate, protected old hospitals from new entrants • Medicare prospective payment o 1983, used DRGs instead of FFS o Created incentives to be more efficient o Reduction in admissions, LOS, growth rate of expenditures |
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Price competition and managed care lowered rate of cost growth
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• Managed care backlash
o Overly restrictive utilization restrictions led to relaxation of restrictions • Price competition o Reduced hospital margins o Reduced quantity of services provided to the uninsured |
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Pay for performance
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• Before payment tied to quantity of services, incentives to increase volume
• Difficult to judge quality, need incentives to increase quality o Focus on process measures of care • Medicare hospital quality initiative o Focuses on set of 10 quality measures, linking to hospital payments • Premier hospital quality demonstration o 34 quality measures, best hospitals receive bonuses on top of DRGs |
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Pay for performance Issues
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o Hard to roll out, need risk adjustment to compare outcomes
o Pay those that improve vs. good already? o Outcomes vs. process measures |
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FP and NP Hospital general trends
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• Health services: 15% GDP, hospital care: 33% of health
• Decline in number of rural hospitals • Rural states have more beds per person • Decline in LOS o Mid-80s: DRGs, 90s: balanced budget act • Increase in outpatient vs. inpatient • Payments o Private payer always pays more than 100% o Negative correlation between government and private paying, cost shifting |
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trends for hospitals
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• Non-profit have larger facilities on average
• Government stepping out of the market-switched role from delivering healthcare to financing • NP have higher LOS than FP, gap is shrinking |
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Non-profits
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• Regulatory status allows tax exemption
• Governed by trustees • Mission statement to benefit community, help needy • Maximize needs of trustees, administration, patients, physicians • Signal for quality o Will not profit from recommendation o Solve problem of asymmetric information- physicians know more about condition. • Change to for profits o Bought if bad management, eliminating competition, better bargaining power • Community benefits: uncompensated care, Medicare and Medicaid shortfalls, community programs |
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Market power
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• IRS grants exemption from taxes, still pay on unrelated business
• Antitrust laws designed to prevent bad mergers, gauge market power gain |
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Tax exemption value
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• NP and FP have same share of uncompensated care
• Bad debt and free care is greater than tax value • Finance uncompensated care with cost-shifting |
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Health vs. medical care
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• Medical care is an input into health, occurs after event or diagnosis
• Lifestyle may affect slops and spikes of health o Diet, exercise, smoking may affect the slope: rate at which health depreciates o Risky behavior may affect the frequency and magnitudes of troughs • H=H(genes, environment, medical care, behavior) |
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Economics
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• Lifestyle choices have an investment dimension
• Lifestyle choices involve incentives and tradeoffs • Lifestyle choices involve externalities • Utility maximization subject to limited researches |
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Actions
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• At any point in time, individuals compare the utility they derive from alternative courses of action and choose the action that will yield the highest expected utility
• Cost of action is measured by the utility that the action not chosen would have yielded (opportunity cost) • Only an action has a cost, not a health status • Individuals best suited to make these decisions o Sometimes not optimal due to externalities, public goods, self-control |
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Externalities and their solutions
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• Health insurance: charge premiums to let consumers face full costs
• Annuities: positive externality, pay healthy to live longer |
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Addiction
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• Gradual adaptation or tolerance
• Positive effects of habits on current tastes or reinforcement • Addicts are responsive to prices • Addiction is not worrisome as long as addicts incorporate consequences of their addictions into their decisions |
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Medical Malpractice Crises
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• Older crises
o Mid 1970s: increased claims, insurers left market o 1980s: premium increases led to states adopting reforms to limit insurance company costs, caps on damages • Early 2000s o Increase in medical malpractice insurance premiums o Insurer exits |
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Deterrence of harm
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• Liability for harm encourages safety (appropriate care)
• Want providers to consider risk of harm and severity of harm • Theoretical result o Optimal deterrence requires providers to be responsible for full liability o Otherwise inadequate incentives for safety |
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Punitive damages
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• Some people may not get caught, reduces incentives
• Punitive damage amount should be inversely related to the probability of detection • Extra money given to victim, such a bad crime |
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Liability insurance
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Premiums paid measure risk of causing negligent injury
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Optimal compensation/insurance
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• Relaxing of standards of negligence, providers better able to spread risk than patients
• People pay more for medical services to be insured if injured |
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Implications of optimal compensation/insurance
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• Cost of tort system implies less than full insurance is optimal
• Pain and suffering compensation o People aren’t willing to pay for o Support for damage caps • Collateral sources would be deducted o Don’t want to pay more to get double money |
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Deterrence in practice
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• Large transactions costs: attorneys, courts, liability insurer
• Assignment of fault, damages are imperfect o Random element o Threat of large awards can induce settlements and encourage too much litigation • Limited experience ratings o Hard to judge if doctor or patient fault o Adverse past doesn’t predict adverse future |
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Compensation in practice
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• High overhead costs
• Long lags before compensation • Many injuries not compensated, random element |
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Policy debate
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• Patient advocates/trial attorneys
o Too few claims, too much injury o Insurers markets are to blame for sharp premium increases and availability problems • Providers and insurers o Frivolous lawsuits o Large awards have little relationship to costs o High legal costs o defensive medicine |
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Evidence
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• little evidence, low % receive payment
• access to care falling in response to rising malpractice premiums |
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Proposed reforms
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• limit damage awards- caps on pain and suffering
• limits attorneys’ fees • pre-trial screening to determine claim merits |
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Premiums
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• determined by:
o expected claim and settlement costs o timing of payments o interest rates o underwriting expenses o old policy claim increases |
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Expanding tort liability
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• worst case: rapid cost growth + increased uncertainty + declining interest rates
• leads to large increases in premiums |
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Types of medical liability insurance
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• occurrence coverage
o policy period of one year o insurer responds to claims for all injuries in policy period, regardless of when claim was made o can be very long lags o good for doctors, protected • claims o insurer only responds to claims that are made during the policy period o lags are shorter, need to fund more because pay money faster |
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Spending on drugs
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• consumers more aware of because larger out of pocket expense
• consumers (60%), private insurance (28%), Medicare/Medicaid (13%) • represent large portion of total consumer budget |
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Reasons for increased expenditures
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• price effects
o increased prices for a particular product, more expensive new products o largest contributor to growth in spending • quantity effects o increased use in age group, more insurance coverage o lower relative price to consumer • new drugs o for untreated diseases, substitutes for other types of care |
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Drug Lifecycle
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• Research and discovery
o High costs for big pharma • Patent protection o Big pharma does marketing and sales with some pricing power, make money • Post patent expiry o Pharma: defensive strategies o Generic: competitive entry |
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Big Pharma
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• No firm dominates
• Growth is flattening due to patent expiry and difficulty discovering o Has caused mergers |
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Generics
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• Larger predicted growth
• More branded drugs hitting patent expiry • policy changes make it easier to approve generic drugs • generic substitution law: pharma has to substitute generic unless noted • do not research or promote products • high volume, low price • highly competitive market |
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Economic theory
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• competitive market: best way to set price
o many suppliers, consumers o no market power or price discrimination • price discrimination exists, significant discounting • at firm level market is competitive • at therapeutic level market is less competitive |
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Drug Lifecycle, market power
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• first entry: monopoly with patent, price based on value and substitutes
• second entry: within class competition, low initial price then increasing, competition for market share • patent expiry: highly competitive, lower prices |
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Pricing
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• Private insurers: discounts because of large volume
• Pharmacies: limited to no discounts, small volume • Government: price controls, ability to move market share • Consumers: advertising, less price sensitive • Physicians: indirect discounts, free stuff for market share |
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Cost control
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• Formularies
o List of approved medicines within a plan o Negotiate discounts for volume, requires substitutes • Payment tiers o Tier 1: Generics, lowest co-pay o Tier 2/3: Preferred brands on formulary o Tier ¾: branded not on formulary, highest co-pay o Changes in cost sharing lowered drug use • Medical necessity claims and bureaucratic hurdles • Required generic substitution • Reducing pharma costs increased inpatient admissions |
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Generic entry
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• Branded manufacturers defense strategies
o OTC: try to get drugs off prescription, get money from advertising o Modest changes to formulation o Legal challenges o Price increases o Pediatric trials: test on kids and get more time o Orphan drug status: option to extend patent from other drug without market yet |
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New drug development timeline
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• Pre-clinical testing, R & D- 1-3 years
• Clinical research and development: 2-10 years • NDA review: 2 years • Post-marketing surveillance |
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Review
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• Consumers have highest OOP on pharma
• Expenditures risen due to taking more, again, new drugs, price • Big pharma merging due to patent expiry, no discoveries • Generics expect growth, large volume o Branded response: OTC, formulation changes • Cost control: formularies and tiers affect supply (discounts from suppliers) and demand (changes consumer consumption) |
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Developing drugs
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• Drug discovery: modify compound to reduce side effects
• Pre-clinical: lab testing • Clinical trials: find safe dose, side effects o Most expensive phase, drugs sold to big companies o Three phases, need volunteers • FDA review: strong evidence of safety needed • Large scale manufacturing: ongoing studies of approved drugs, safety • Faster done, less assurance of quality |
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New Molecule testing
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• Pre-clinical: test for pharma activity
• Investigation of new drug authorization: clinical test strategies, animal test results • Phase 1: bad side effects • Phase 2: optimal dosage • Phase 3: efficacy o Most expensive, most drugs sold before this phase • NDA: 6-12 months, collect all info and give to FDA • Phase IIIb/IV and post marketing studies: surveillance, know side effects |
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Patent protection
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• R&D is costly, risky, and time consuming
• Patent protection allows recoup of R&D investment o Ensure investment in innovation • Protection for 20 years from initial application o Effective patent protection: 5-8 years for sales o Extension through pediatric trials, orphan drugs, modifications • Bio-equivalence requirement: generic doesn’t need to show safety/efficacy |
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Medicare Part D
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• Private industry creates plans selected by beneficiaries
• Government cannot negotiate with pharma companies • Premiums, deductibles, co-pay, then gap/donut hole, co-pay • 55% of eligible enroll • Cost sharing increasing over time o Stronger incentive to use generic |
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International comparisons
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• US biggest drug buyers, low % of total NHE
• Most rapidly growing pharma, highest per capita • Most patents, research expenditures in US |
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Cost control
• Supply-side strategies |
o Formularies
o Direct price controls: internal, external o Reimbursement controls o Profit, revenue controls o Access to market controls |
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Demand-side strategies
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o Patient cost sharing
o Tiered co-payments o Administrative: prescribing guidelines, generic substitution o Physicians drug budget |
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Direct price controls
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• Government sets prices, lowers current drug expenditures
• External vs. internal reference price • Product launch strategy o Initial high price launch, limit range of price |
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Reimbursement based cost controls
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• Government sets reimbursement for class of drugs
• Manufacturer sets price o If price is greater, consumer pays difference o If reimbursement is greater, government or pharmacist gets • Allow competitive effects, better quality can charge higher price • Prices tend to converge to reimbursement level |
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Generic referencing
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• Group is all products which have same molecule
• Reimbursement based on current generic prices • Only have to carry one generic, must carry all brands o Generics give discounts to be chosen • Some insurers and Medicaid pay pharmacy at maximum allowable cost o Patient pays difference, pharmacist makes difference |
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Medicaid best price
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• States only reimbursed if have manufacturer agreement
• Receive largest discount or 15% less than average • Penalized if increase prices faster than CPI |
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Policy impact
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• Without patents, less investment and innovation
• Price controls would lower prices, less investment in R&D |
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Key features of investment
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• High R & D
• Long lags from discovery to market, testing • Scientific risk (pre-launch), many clinical trials • Commercial risk- competing drugs, changes in demand, side effects • Legal liability • Regulatory/political risks |
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Costs of new drugs
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• Average cost: 800m-1b, justifies high price
• Includes all R&D costs, high probability of failure |
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Funding drugs
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• Internal: retained earnings
• External: venture capital, debt, mergers and acquisitions, alliances |
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Big pharma
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• Cash flow from blockbusters
• Need to invest in new drugs, fixed R&D costs lead to high operating leverage o Revenues drop with patent expiry, side effects |
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Biotech
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• Need external funding, few have profits
• Few giants, most are start-ups |
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Alliances/partnerships
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• biotech
o Act as seller of drug compound o Contribute research expertise, scientific knowledge, tech o Main 90% patent, rights in some markets • Pharma o Buyer, run trials o Product development, sales and marketing, manufacturing expertise |
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• Payments
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o Upfront payment: cash
o Milestone: payment contingent on compound achieving a specific goal o Equity: licensee purchases new share of licensor stock o Royalties: get % of sales or profits post-launch |
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• Motivation
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o Weak large pharma pipelines, patent expirations, excess capacity
o Specialization, comparative advantage Pharma: clinical trials, marketing, production Biotech: discovery with new technologies o Payments are cost effective vs. capital markets o Pharmas may have advantage in managing biotech o Co-development reduces risk |
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Health disparities
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• Health status disparities: differences in diseases, health
• Health care disparities: how long to get procedure, what type of care you get • Determinants of health: genetic, behavioral, environmental, social setting, health care |
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• Costs
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o Personal costs: morbidity, disability, lost productivity
o Societal costs: missed opportunities to intervene and reduce the burden of illness |
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Disparities in access to care
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• Differences in having a doctor, receiving care
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Disparities in health insurance coverage
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• Differences in income, employment leads to differences in coverage
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Disparities in quality
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• Differences in mortality rates, safety, waiting time, effectiveness, efficiency, patient-centeredness
• Need to create more representative health care workforce o Recruit minorities into health professions |
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Addressing disparities
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• Improve quality, access to care
• Increased use of health services guidelines in clinical practice • Increasing language interpreter services, quality |
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Health systems interventions
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• Promote consistency and equity of care
• Structure payment systems to ensure adequate supply of services to minorities • Reduce barriers, enhance communications • Promote use of interpretation services where need exists |
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Policy focus
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• Implement national policies to improve treatment of all patients
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Fraud and abuse
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• Bill for procedure not provided
• “upcode” treatment provided • Provides and bills for care that is unnecessary |
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Issues with fraud
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• Leads to unnecessary costs
• Hard to monitor claims • Risky to give surgery, getting sicker • Unethical, undermines trust in system |
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False claims act
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• Liable for false claim for payment
• Pay $10,000 per claim, can be excluded from Medicare/Medicaid • Qui tam provision: individuals can bring suit on behalf of the government o Can collect portion of settlement |
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Referrals
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• Paying internist for referrals
• Issues o Trying to increase patient flow o Doesn’t reward better surgeons o Unnecessary surgeries o Deprives people of access to other doctors |
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Anti-kickback statue
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• Cannot solicit or receive to offer or pay any kickback in return for referrals
• Not prohibition on charity care, bans doing things in return for favors |
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Waiving Medicare patient copayment
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• People may seek care they don’t need
• Redirecting traffic to him o Kick back: give something in return for seeing • Discourages people from choosing on quality |
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Sending tests to own lab
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• Might be inclined to prescribe more tests
• Manipulate test results • Another lab could do cheaper/better • Kick back= profits fro tests |
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Stark (self-referral) law
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• If physician has a financial relationship with an entity cannot make a referral to the entity for the furnishing of health services
• Bad if more efficient if physician has care over whole process, your lab may be best |
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Limiting the reach of fraud statutes
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• Statutory exceptions
o Anti-kickback, stark: doctor can send patients to own hospital o Stark: in-office ancillary services- in context of own office, supervised by physician o Stark: investment in whole hospitals • Regulatory exceptions and safe harbors • Advisory opinions |
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International health systems variation
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• Finance structure: who pays
• Insurance systems: pool risks • Delivery of care: incentivize physicians, hospitals, drug companies |
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Goals
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• Finance: money to cover healthcare
• Insurance: pool risks across ages/income, subsidize those that can’t pay • Delivery: purchase is allocatively and technically efficient |
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Determinants of health
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• Factors that influence health: sanitation, diet, education
• HC system inputs: supply of doctors, hospitals • HC system design: access to care, quality, insurance |
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Health system types
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• National health service
o UK, Canada o Tax financed care, government delivery, limited choice • Social health insurance o Germany o Wage-financed, sickness funds=public HMOs, some choice • Private/voluntary health insurance o US o Premium-financed (some OOP), large number of payers, competitive, choice • Community health insurance o Uganda o Premium-financed, local-level pooling, limited services and affordability issues |
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Component options
• Finance |
o Taxes (mandatory): income: all earnings, wages: workers only, sales: consumers
o Private payment (voluntary): employer/employee, premiums, out of pocket |
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• Insurance (risk pooling)
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o Public system: single vs. multiple pools, pools definition
o Public + private system: variations in public market size, regulations limiting private market entry |
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• Delivery
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o Sources of care: MDs, hospitals
o Ownership: government, private, non-profit o Reimbursement: fixed budgets, FFS, capitation, per diem |
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Financing mechanisms
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• UK: national health service, general tax revenue, selective private pay, limited OOP, single payer
• Canada: Canadian “Medicare”, general revenue tax, single-payer for most services • Germany: social insurance model, wage tax, limited income tax, multi-payer • US: hybrid-multi-payer. Private sector: employer-based tax exempt premiums, public sector: income tax and wage tax for Medicare/Medicaid, OOP |
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Financing spectrum
• Public |
o Canada, UK
o General tax (income) Generally progressive (+) Difficult to evade (+) Not responsive to market (fixed budget) (-) o Wage tax Simple to administer (+) Cross-subsidization (+) Pro-cyclical (-) |
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• Private
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o Germany, US
o Premiums (voluntary) Contributions reflect market demand (+) Equity/redistribution (-) o OOP Ensures cost aligned with willingness to pay (+) Risk reduction is eliminated (-) |
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Insurance mechanisms
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• UK: mandatory NHS, but private opt out selectively
• Canada: mandatory enrollment in provincial Medicare (prevent adverse selection) • Germany: sickness funds, choice of fund, private opt-out • US: voluntary HMO/indemnity pool at employer level, Medicare/Medicaid |
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Insurance spectrum
• Single-payer |
o Canada, UK
o Avoid adverse selection (+) o Economies of scale (+) o Weak incentives for quality improvement/efficiency (-) |
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• Multi-payer
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o Germany, US
o Competition between plans (+) o Individual choice/responsibility (+) o Selection/transaction costs (-) |
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Delivery/compensation spectrum
• Fixed compensation |
o Canada, Germany
o Budget Stability (+) Irresponsive to demand (-) o Capitation/DRG Incentives for prevention/efficient care (+) Incentives to shirk (-) |
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• Variable compensation
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o US, UK
o FFS/Per diem Incentives for volume (+/-) |
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Provision and reimbursement (primary care, specialists)
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• UK: capitation/FFS mix
• Canada: independent- negotiated FFS, caps on income • Germany: mandatory regional MD group, negotiated FFS • US: organized MD groups, rates negotiated between HMO/groups-capitation, discounted FFS |
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Provision and reimbursement (hospitals)
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• UK: compete with other hospitals for business, funding based on utilization
• Canada: private, negotiated FFS • Germany: highly regulated- per diem, recent shift to DRG • US: generally private, often DRG |
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Provision and reimbursement (drugs)
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• UK: regional access decisions, profit controls
• Canada: direct price controls • Germany: reference pricing • US: negotiated prices, Medicaid discounts |
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Canadian Health Care
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• 1984 Canada Health Act: universal, comprehensive, portable, accessible
• Free choice of physicians limits gatekeeper role • Price controls may harm access to medicines |
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German Health Care
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• Multiple sickness funds
o Risk transfers, free choice • Efforts to implement DRG payments and disease management |
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US Health Care
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• Medicare/Medicaid spending growth rate
• Tax subsidy on employer premiums • Technology leader-cost leader |
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Higher costs in US
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• Higher income, more spent on health
• Prices o High expenditure=average quantity*high price • Greater use of technology/technology intensity |
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Factors that affect health expenditures
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• GDP (+)
• Gatekeeper system (-) • Inpatient care expenditure proportion of total expenditure (+) • Capitation physician payments (-) • MD/capita (-), pay more |
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Health in Low Developed Countries
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• Most people pay OOP
• Government funds public hospitals in urban areas • Public clinics in rural areas • Limited tax base |
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• Obstacles
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o Low/no income
o Tax based limited by inadequate collection and enforcement o Weak public health o Health infrastructure: few personnel, emigration of trainees o Cycle: poverty disease, low productivity |
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UN goals
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• Reduce child mortality
• Improve maternal health • Combat HIV/AIDS • How to allocate resources o Maximize health income vs. financial protection |
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Prevention vs. treatment
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• Prevention is cheaper if prevention cost is less than treatment cost*disease incidence
• Prevention is ore cost effective if targeted to subgroups at high risk of disease |
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Iron triangle
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• Quality
o Longevity, morbidity and mortality statistics o Medical malpractice • Access o 16% uninsured, only major nation without universal health care • Cost o Healthcare costs rising faster than economy is growing o Premiums, co-pays rising, employers cutting back |
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Market Good
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• Consumer driven healthcare movement: let the consumer decide
• May not be good consumers without knowledge and skills |
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Public vs. Private
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• Trust government or private industries
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Need to contain costs
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• Historically doctors focused on individual patient
• Systems view: realize there are finite resources for all patients |
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Fiduciary duties
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• Arms’ length transactions: know each other is looking out for own interest
• Fiduciary: when disparity between parties, doctor knows more than patient o Fiduciary (stronger party) must put other party’s interests first • Erosion of trusts |
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Technology
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• Custom-tailored medicine
• Can lower cost and improve quality • But may be used to raise costs • Rich get first, need to bear costs |
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Covered services
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• Medically necessary and appropriate
• Don’t pay for experimental services • Must be of proven efficacy, evidence-based medicine • Contracts of adhesion o Contra proferentem- empower weaker party for negotiation, insurer has more power |
