CH 6: health services financing

Question 1

What is the central role of health services financing in the United States?
Question 1 options:

a) Underwrite medical risk
b) Support managed care
c) Balance the supply of health care professionals
d) Fund health insurance

Answer 1

Fund health insurance

Question 2

What is the primary mechanism that enables people to obtain health care services?
Question 2 options:

a) Payment for services
b) Control of expenditures
c) Availability of services
d) Health insurance

Answer 2

health insurance

Question 3

The phenomenon called ‘moral hazard’ results directly from
Question 3 options:

a) the uninsured status of a segment of the U.S. population
b) inadequate payment to providers
c) health insurance coverage
d) managed care enrollment

Answer 3

health insurance coverage

Question 4

Controlling total health care expenditures by restricting financing for health insurance.
Question 5 options:

a) Underwriting
b) Demand-side rationing
c) Top-down control
d) Underutilization

Answer 4

Demand-side rationing

Question 5

In national health care systems, total expenditures are controlled mainly through
Question 6 options:

a) demand-side rationing
b) supply-side rationing
c) cost shifting
d) underwriting

Answer 5

supply-side rationing

Question 6

National health expenditures (E) =
Question 7 options:

a) Q / P
b) (P x Q) / P
c) P x Q
d) P / Q

Answer 6

P x Q

Question 7

In a general sense, what is the primary purpose of insurance?
Question 8 options:

a) Protection against risk
b) Predicting risk
c) Underwriting
d) Risk assessment

Answer 7

Protection against risk

Question 8

Private health insurance is also referred to as
Question 9 options:

a) mandatory health insurance
b) public insurance
c) employee health insurance
d) voluntary health insurance

Answer 8

voluntary health insurance

Question 9

how do single payer systems work

Answer 9

taxes are raised by govt. to provide health ins. to citizens

Question 10

as its central role, health services financing…

Answer 10

pays for health insurance premiums

Question 11

what does financing determine

Answer 11

who has access to health care and who does not

Question 12

moral hazard

Answer 12

consumer behavior that leads to a higher utilization of health care services when the services are covered by insurance

Question 13

underwriting

Answer 13

a systematic technique for evaluating, selecting (or rejecting), classifying and rating risks

Question 14

what principles underlie the concept of insurance

Answer 14

1. risk is unpredictable for individual insured
2. risk can be predicted w/ a reasonable degree of accuracy for a group or population
3. insurance provides a mechanism for transferring or shifting risk from the individual to the group through the pooling of resources
4. all members of the insured group share actual losses on some equitable basis

Question 15

plan

Answer 15

specifies among other details information pertaining to costs, covered services, and how to obtain health care when needed

Question 16

methods to determine premium

Answer 16

1. experience rating
2. community rating
3. adjusted community rating

Question 17

experience rating

Answer 17

based on groups own medical claims experience. premiums differ from group to group because different groups have different risks.

Question 18

community rating

Answer 18

spreads the risk among members of larger population. premiums based on the utilization experience of the entire population covered by the same health insurance. costs shift from poor health to good health people and makes insurance less affordable for the healthy

Question 19

adjusted community rating

Answer 19

overcomes drawbacks or experience and community rating. price takes into account demographic factors such as age, gender, geography and family composition. only age, family comp, geography and tobacco may be used to adjust premiums

Question 20

deductible

Answer 20

amount the insured must first pay each year before any benefits are payable on the plan

Question 21

coinsurance

Answer 21

set proportion of medical costs insured must pay out of pocket

Question 22

group insurance

Answer 22

anticipates a substantial number of people in the group will purchase. risk is spread out among many insured, lower costs for coverage

Question 23

self insured plans

Answer 23

employer acts as its own insurer instead of obtaining insurance through an insurance company

Question 24

reinsurance

Answer 24

self insured employers protect themselves against any potential risk of high losses, also called stop loss coverage

Question 25

high deductible health plans (HDHPs)/consumer driven plans

Answer 25

combine a savings option with a health insurance plan carrying a high deductible. gives consumer greater control over how to use funds.

Question 26

health reimbursement arrangement (HRA)

Answer 26

established by employer, pays deductibles, copayments, premiums, funded by employer

Question 27

health savings account (HSA)

Answer 27

established by individual, employer can assist, must be under 65, individual must fund, employer not required to

Question 28

medigap/medicare supplement

Answer 28

private health insurance that can be purchased only by those in medicare program which has high out of pocket costs, deductibles copays/coinsurance, does not cover long term care. can’t have this with MEDICARE ADVANTAGE

Question 29

preexisting condition

Answer 29

significant health problem that a person has prior to obtaining health insurance; diabetes, cancer, severe heart disease, hiv/aids

Question 30

medical loss ratio

Answer 30

percentage of premium revenue spent on medical expenses

Question 31

play or pay

Answer 31

requires employers to either provide their employees with health insurance or pay a penalty for not

Question 32

categorical problems

Answer 32

public health insurance programs ie medicare, medicaid, va health

Question 33

entitlement program

Answer 33

people contribute throughout lives through taxes and are entitled to coverage when qualified

Question 34

benefit period

Answer 34

spell of illness beginning with hospitalization and ending when a beneficiary has not been an inpatient in hospital for 60 consecutive days

Question 35

tricare

Answer 35

health care for the military

Question 36

indian health services

Answer 36

provides comprehensive health care to members of federally recognized american indian and alaska native tribes

Question 37

charge

Answer 37

fee set by provider which is akin to price in general commerce

Question 38

rate

Answer 38

price set by a third party payer

Question 39

fee schedule

Answer 39

index of charges listing individual fees for each type of service

Question 40

claim

Answer 40

demand for payment of covered expenses sent to insurance company

Question 41

balanced billed

Answer 41

asked the patients to pay the difference between actual charges and payments received from third party payers

Question 42

relative valued units

Answer 42

measures based on physicians time, skill, and intensity it takes to provide a service

Question 43

current procedural terminology (cpt)

Answer 43

a standard coding system for physicians services developed by AMA

Question 44

medicare physician fee schedule

Answer 44

price list for physicians services based on which individual payments are made when physicians file their claims

Question 45

capitation

Answer 45

provider is paid a set monthly fee per enrollee

Question 46

cost plus

Answer 46

reimbursement to a provider based on cost plus a factor to cover value of capital

Question 47

retrospective reimbursement

Answer 47

set rates after evaluating costs retrospectively

Question 48

prospective reimbursement

Answer 48

uses established criteria to determine amount of reimbursement in advance of services

Question 49

pay for performance

Answer 49

links payment to quality and efficiency as incentive to improve quality of health care and reduce costs

Question 50

outliers

Answer 50

additional payments made for cases that involve extremely long hospital stays are extremely expensive

Question 51

case mix

Answer 51

aggregate of severity of conditions requiring clinical intervention

Question 52

third party administrator

Answer 52

collects premiums, pays claims or provides administrative services

Question 53

fiscal intermediaries

Answer 53

private sector insurance (ie bcbs) who process provider claims under contract from Medicare and Medicaid

Question 54

carriers

Answer 54

private claims processors for medicare part b services

Question 55

gross domestic product (GDP)

Answer 55

total value of goods and services produced in the US

Question 56

national health expenditures

Answer 56

aggregate of the amount the nation spends for all health services

Question 57

personal health expenditures

Answer 57

component of national health expenditures and comprise total spending for services and goods related directly to patient care

Question 58

risk selection

Answer 58

healthy people disproportionately enroll into a health plan

Question 59

adverse selection

Answer 59

high risk individuals enroll in health insurance plans in greater numbers compared to healthy people. causes premiums to rise

Question 60

risk rating

Answer 60

adjusting premiums to reflect health status and making potential high cost enrollees pay more

Question 61

churning

Answer 61

phenomenon in which people gain and lose health insurance periodically

Question 62

cost shifting

Answer 62

providers charging extra to payers who do not exercise strict cost controls