costs Flashcards
health outcomes
the end result of medical care
what happens to the patient
three outcome categories
the six D’s:
Clinical (death, disease)
economic (dollars)
humanistic (disability, discomfort, dissatisfaction)
different types of clinical outcomes
intermediary (HbA1c, BP)
patient-oriented (MI, stroke, hospitalization, cure, death)
health economics vs pharmacoeconomics
health economics: applies concepts to health and health care outcomes (BROAD)
pharmacoeconomics: applies concepts to pharmaceuticals or pharmacy services (SPECIFIC)
drivers of higher healthcare costs in the US
inpatient/outpatient care
prescription drugs
health administration
what is universal health care coverage
all people have access to the full range of quality health services they need, when and where they need them, without financial hardship. covers the full continuum of essential health services. however, more taxes
3 factors that drive growth in prescription drug spending
newly marketed drugs
price changes of existing agents
increases in utilization
what must happen for an intervention to be sustainable
improvement of outcomes must outweigh the costs of the intervention
true/false: the price of a drug is the same thing as its costs
false
true/false: in the US we have a single-payer system
false: there is no single source for obtaining health care costs
what are charges
charge= cost + profit
the amount a provider bills a patient or payer for a product/service
what are RCCs
ratio of cost-to-charge
how to calculate RCC costs
(charge for item) x (RCC)
types of costs
direct, indirect, intangible
what is a direct medical cost
costs of services or products associated directly with a medical intervention (ex hospital stay, drugs)
what is a direct non-medical cost
cost of providing non-medical assistance, food, lodging, and transportation because of the medical intervention
what are indirect costs
cost of lost or reduced productivity resulting from morbidity or premature mortality due to a medical condition or intervention
morbidity costs
goods and services not produced by the patient because of illness
mortality costs
goods and services the person could have produced had the illness not been incurred and the person not died prematurely
intangible costs
costs assigned to the amount of suffering that occurs because of the disease or intervention
fixed vs variable costs
fixed: do not vary with quantity or volume of output in the short run (1 year). usually vary with time. includes things like rent, equipment leases, salary
variable: costs that vary with changes in output volume– the more you buy, the better the deal (drugs, devices, supplies)
mean cost
total costs of the healthcare intervention/total quantity of the intervention provided
major sources of cost data
external (literature/studies, databases, websites)
internal (payer, hospital, pharmacy)
sources of drug pricing
average wholesale price (AWP)
wholesale acquisition cost (WAC)
average wholesale price
a figure reported by commercial publishers of drug pricing data, based on wholesale pricing info provided to them by drug manufacturers
wholesale acquisition cost
the manufacturer’s list price (charge) for the drug to the wholesalers or direct purchasers
does not reflect discounts or rebates
preferred sources of drug pricing
medicare average sales prices (reflects actual prices after price concessions & discounts)
federal supply schedule
things to know about AWP
most plans use this to calculate reimbursements to pharmacies
frequently used in PE studies
derived from databases from self-reported manufacturer data on brand/generic drugs
not defined by federal law
intended to be the average price wholesalers sold medications to physicians and pharmacies
behind the scene discounts and rebate programs
sales price and contracts may be held confidentially
hospital drug cost issues
-drug acquisition/contract price is the actual price paid by a specific institution
-costs for drugs administered in the hospital are usually bundled w/ other services
-drug costs vary by package size & manufacturer
-may be highly variable
-drug acquisition costs are commonly used for institution-specific PE analysis
_____ is a common practice in hospitals that is a very important pharmacy issue
cost-shifting
the costs of newer, more effective drugs increase the pharmacy budget
hospital cost shifting
-most costs incurred by a department are directly associated with that department
-departments that do not generate revenue must assign their expenses to revenue-generating departments that charge patients for their services
-spending more money in one department might save costs in a different department: a new expensive drug may increase costs for pharmacy but DECREASE overall hospital costs
work measurement techniques
work sampling
stopwatch time
work sampling
momentary observation at pre-selected times; then the % of time devoted to each activity is determined
useful for non-repetitive tasks
stopwatch time
time and motion
directly measures time required to complete a specific task
useful for repetitive tasks
how do physicians typically bill for outpatient services
AMA CTP codes (current procedural terminology)
ICD-10 codes
internal classification of diseases
used to classify and code all diagnoses, symptoms, and procedures associated with hospital care
assigned at discharge for the entire patient encounter