Benefit Design Flashcards
“Hidden costs” in US healthcare
Since employers sponsor most US healthcare and individuals do not see the costs, some believe the US is more prone to moral hazard.
Major finding of the RAND Health Care study
People tend to consume less healthcare when they cost share regardless of the health benefit associated with that care.
The major role of differential cost sharing in benefit design nowadays is to . . .
. . . direct patients to high-value, low-cost care and away from high-cost, low value care.
For example, making preventative and maintenance care almost free, but making nonemergent visits to the emergency room have 30% coinsurance.
This encourages good health behavior in the patient economically, without the patient really needing to understand why a particular practice is high or low value.
Contingent coverage
Under contingent coverage the consumer’s portion of the cost of services is dependent on obtaining authorization from a qualified entity, such as a payer or provider, before receiving care.
Value-based insurance design
Built on the principle of lowering or removing financial barriers to essential, high-value clinical services based on the tenets of “clinical nuance.”
These tenets recognize that (1) medical services differ in the amount of health they produce, and (2) the clinical benefit derived from a specific service depends on the consumers using it, as well as when and where they receive the service.
V-BID aligns out-of-pocket costs for a service based on its “relative value” for a consumer or population.
High deductible health plans
Higher deductibles and lower premiums than most health plans.
A HDHP is often paired with a health savings account (HSA), which lets consumers set aside money on a pre-tax basis to pay for qualified medical expenses. Employers can also make contributions to an employee’s HSA
Tiered networks
Created by designating groups of providers into tiers based on the value—cost and quality—of the care they provide. Providers that deliver “high-value care” are in the highest tier, while those that provide “low-value care” are in the lowest tier. Tiered networks also are called high-performing networks.
Patients who seek care from high-value or preferred providers have lower copays.
Narrow networks
Smaller groups of preferred providers who have agreed to accept lower prices for services (in exchange for greater patient volume). If providers are outside the network, patients pay higher copays, or are uninsured for these providers.
Narrow networks are typically an elective product that consumers can choose when enrolling in a health plan. Consumers generally choose to enroll in narrow networks to have lower premiums.
Preference pricing
Reference pricing establishes a standard price for a drug, procedure, service, or bundle of services and requires that the plan member pay all charges above this price.
Generally, the health plan provides consumers with a list—often on a web site—that reflects various providers’ prices and whether they meet or exceed the reference price.
Centers of excellence
Designated groups of providers that meet high standards for both the quality and the cost of care for a particular service or set of services
Preauthorization
Requires patients to receive approval from their designated primary care physician (PCP) before receiving care from specialist providers.
Step therapy
Intended to control the costs and risks posed by particular treatments, by requiring patients to start with the most cost-effective treatment and move to more costly or risky treatments if the insurer determines it necessary care
Most commonly used for perscription drugs
Precertification
Requires consumers to obtain permission from their health plan before receiving a particular service, to affirm whether the care is medically necessary. If the care is denied by the health plan, the consumer must pay the full cost of care if they choose to receive the care anyway.
Continued stay review
A protocol health plans establish for inpatient admissions to a hospital or another facility that requires regular review of a patient’s stay. Health plans can determine whether they will cover the costs associated with the stay based on an individual patient’s need.
Another variation on this theme is caps on the quantity of a service, such as allowing a limited number of physical therapy visits for any one diagnosis. Caps are put in place to contain health care spending as well as to direct consumers to seek alternative care if the current services are not resolving the patient’s problem.
ambulatory surgery center
Health care facilities that offer patients the convenience of having surgeries and procedures performed safely outside the hospital setting
