12 - Morbidity risk Flashcards
What factors contribute to morbidity risk?
- Infection
- Lifestyle diseases
- Trauma
What are some techniques to manage morbidity risk?
- Avoid the risk
- Manage the risk
- Transfer the risk
What is moratorium underwriting?
A risk mitigation process where an insurer excludes certain pre-existing conditions (PECs) for a specified time.
How can genetics be used in underwriting?
To identify and understand underlying morbidity and mortality risks, but is subject to local legislation and practice.
What are some challenges with deteriorating risk profiles in group plans?
If there is some reason for a detrimental shift in the risk pool, this poses the risk that premiums will need to increase to allow for the increase in average risk of the pool.
How do distribution channels affect morbidity risk?
Different channels appeal to different people, according to their level of financial sophistication and level of income.
What is the class selection factor?
People can be usefully classified by certain attributes that affect their mortality or morbidity.
What is a risk with lump-sum disability benefits?
Once the beneficiary is diagnosed as being permanently disabled, the expertise required to evaluate claimants, and because once the benefit is paid money cannot be recouped if the person later recovers, often makes insurance an attractive proposition.
What is the main morbidity risk related to PMI?
The medical scheme or insurer may have limited control over the size of benefit payments, due to provider choice, treatment protocols used, medicine, and type of treatment provided.
What is the nature of the anti-selection risk on individual PMI contracts where individual rating of risks is not used?
Anti-selection risk is generally reduced on group PMI contracts that form part of conditions of employment, because the individuals involved have less active choice about taking out the contract.
How do unexpected changes in future rates of diagnosis affect morbidity risk?
Unexpected changes in future rates of diagnosis also constitute a risk. Improvements in medical technology are a key factor in this risk.
How can insurance companies reduce anti-selection risk for PMI products?
Insurance companies will of course seek to reduce anti-selection risk. For example, they might use a ‘waiting period’.
What are some ways in which insurers can manage claims costs?
- Limitations and exclusions
- Co-payments and levies
- Medical savings accounts
- Approved provider networks
- Medicine formularies
- Tariff negotiation
- Disease management programmes
What are the objectives of managed care interventions?
- Reducing the cost of medical events
- Improving the quality of care provided
- Ensuring that medical services are delivered in an appropriate setting
- Ensuring that high-risk members are managed and receive appropriate care
- Reducing the number of unnecessary medical services
What are some measures to assess the quality of care provided under alternative reimbursement mechanisms?
- Patient mortality rate
- Specialist referral rate
- Hospital admission rate
- Procedure complication rate
- Chronic medication adherence
- Patient questionnaires
What is the main aim of managed care protocols?
To reduce and manage morbidity risk while maintaining access to quality healthcare services.
What are the types of risks in managed care that can be transferred to the MCO?
- Price risk
- Intensity risk
- Severity risk
- Frequency risk
- Actuarial and marketing risk
What are some alternative reimbursement models (ARMs)?
- Fee-for-service (FFS)
- Modified (negotiated) fee-for-service
- Per diem
- Per case / episode of care / global fee
- Capitation
- Salary
- Pay for performance
- Pay for coordination
What is risk adjustment?
Risk adjustment refers to adjusting for underlying factors, which are drivers of utilisation, or which impact the underlying morbidity, when evaluating utilisation levels and/or cost.
What are some risk factors used in risk adjustment?
- Age
- Sex
- Race and ethnicity
- Acute clinical stability
- Principal diagnosis
- Co-morbidities
- Functional status
- Socio-economic status
- Lifestyle factors
- Access to benefits / insurance
What are some applications of risk adjustment?
- Budgeting
- Pricing / reserving
- Measuring efficiency
What is case mix index?
A risk adjustment factor often referred to as the case mix index when looking at different groups of clinical data such as admissions.
What are some patient concerns with managed care?
- Provider networks may restrict access to required care
- Providers may resent external parties imposing clinical protocols on them and influencing the way in which they practise medicine
- Managed care may compromise the quality of care provided to patients by encouraging underservicing of patients by providers
