CH 6: health services financing Flashcards
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
Fund health insurance
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
health insurance
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
health insurance coverage
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
Demand-side rationing
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
supply-side rationing
National health expenditures (E) =
Question 7 options:
a) Q / P
b) (P x Q) / P
c) P x Q
d) P / Q
P x Q
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
Protection against risk
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
voluntary health insurance
how do single payer systems work
taxes are raised by govt. to provide health ins. to citizens
as its central role, health services financing…
pays for health insurance premiums
what does financing determine
who has access to health care and who does not
moral hazard
consumer behavior that leads to a higher utilization of health care services when the services are covered by insurance
underwriting
a systematic technique for evaluating, selecting (or rejecting), classifying and rating risks
what principles underlie the concept of insurance
- risk is unpredictable for individual insured
- risk can be predicted w/ a reasonable degree of accuracy for a group or population
- insurance provides a mechanism for transferring or shifting risk from the individual to the group through the pooling of resources
- all members of the insured group share actual losses on some equitable basis
plan
specifies among other details information pertaining to costs, covered services, and how to obtain health care when needed
methods to determine premium
- experience rating
- community rating
- adjusted community rating
experience rating
based on groups own medical claims experience. premiums differ from group to group because different groups have different risks.
community rating
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
adjusted community rating
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
deductible
amount the insured must first pay each year before any benefits are payable on the plan
coinsurance
set proportion of medical costs insured must pay out of pocket
group insurance
anticipates a substantial number of people in the group will purchase. risk is spread out among many insured, lower costs for coverage
self insured plans
employer acts as its own insurer instead of obtaining insurance through an insurance company
reinsurance
self insured employers protect themselves against any potential risk of high losses, also called stop loss coverage
high deductible health plans (HDHPs)/consumer driven plans
combine a savings option with a health insurance plan carrying a high deductible. gives consumer greater control over how to use funds.
health reimbursement arrangement (HRA)
established by employer, pays deductibles, copayments, premiums, funded by employer
health savings account (HSA)
established by individual, employer can assist, must be under 65, individual must fund, employer not required to
medigap/medicare supplement
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
preexisting condition
significant health problem that a person has prior to obtaining health insurance; diabetes, cancer, severe heart disease, hiv/aids
medical loss ratio
percentage of premium revenue spent on medical expenses
play or pay
requires employers to either provide their employees with health insurance or pay a penalty for not
categorical problems
public health insurance programs ie medicare, medicaid, va health
entitlement program
people contribute throughout lives through taxes and are entitled to coverage when qualified
benefit period
spell of illness beginning with hospitalization and ending when a beneficiary has not been an inpatient in hospital for 60 consecutive days
tricare
health care for the military
indian health services
provides comprehensive health care to members of federally recognized american indian and alaska native tribes
charge
fee set by provider which is akin to price in general commerce
rate
price set by a third party payer
fee schedule
index of charges listing individual fees for each type of service
claim
demand for payment of covered expenses sent to insurance company
balanced billed
asked the patients to pay the difference between actual charges and payments received from third party payers
relative valued units
measures based on physicians time, skill, and intensity it takes to provide a service
current procedural terminology (cpt)
a standard coding system for physicians services developed by AMA
medicare physician fee schedule
price list for physicians services based on which individual payments are made when physicians file their claims
capitation
provider is paid a set monthly fee per enrollee
cost plus
reimbursement to a provider based on cost plus a factor to cover value of capital
retrospective reimbursement
set rates after evaluating costs retrospectively
prospective reimbursement
uses established criteria to determine amount of reimbursement in advance of services
pay for performance
links payment to quality and efficiency as incentive to improve quality of health care and reduce costs
outliers
additional payments made for cases that involve extremely long hospital stays are extremely expensive
case mix
aggregate of severity of conditions requiring clinical intervention
third party administrator
collects premiums, pays claims or provides administrative services
fiscal intermediaries
private sector insurance (ie bcbs) who process provider claims under contract from Medicare and Medicaid
carriers
private claims processors for medicare part b services
gross domestic product (GDP)
total value of goods and services produced in the US
national health expenditures
aggregate of the amount the nation spends for all health services
personal health expenditures
component of national health expenditures and comprise total spending for services and goods related directly to patient care
risk selection
healthy people disproportionately enroll into a health plan
adverse selection
high risk individuals enroll in health insurance plans in greater numbers compared to healthy people. causes premiums to rise
risk rating
adjusting premiums to reflect health status and making potential high cost enrollees pay more
churning
phenomenon in which people gain and lose health insurance periodically
cost shifting
providers charging extra to payers who do not exercise strict cost controls
