Exam 1 - Powerpoint 1

Question 1

For which age groups does US lag furthest behind the best?

Answer 1

15-19 to 45-49

Question 2

US Healthcare performance

Answer 2

perform poorly in terms of...
affordability
efficiency
equity
overall outcomes

Question 3

% of GDP US spends healthcare

Answer 3

16.4%

Average is 8.9%

Question 4

American Paradox

Answer 4

we spend so much on health, yet we get such poor results compared to other highly developed countries

Question 5

Large disparities from surveying people

Answer 5

Preventive care
Care coordination
Affordability
Having regular doctor or place of care
Access to after-hours care and prompt specialist care

Question 6

Where does US look good terms of healthcare?

Answer 6

Preventive care (vaccines, screenings, etc)
Safe care, including medication review
Patient engagement, including discussions and planning

Question 7

1st Decades of the 1900s

Answer 7

Hospital mostly for delivery and surgeries
Paid with own money, Out of Pocket
Doctors charged Fee for service, was on sliding scale, flexible, installment plans

Question 8

Great Depression (late 1920s - late 1930s)

Answer 8

Teachers in Dallas set aside small amount each week to cover hospital care at Baylor U Med Center if ever needed = Blue Cross

Spread to other states

created “Blue shield” to pay for physician visits

Blue Cross and Blue Shield joined in 1980s

Question 9

WWII (1939-1945)

Answer 9

Labor unions couldn’t negotiate higher wages, instead went for fringe benefits ie Health Insurance

IRS laws in 40s 50s made employer-based healthcare tax free, increasing benefit relative to wages

Medical technology advances from war brought back by MDs

Question 10

Post-War (Europe)

Answer 10

Focused on rebuilding infrastructure and providing basic services

Spirit of unity, reform, progress, socialism,

most advanced technology wasn’t priority

Question 11

Post-War (USA)

Answer 11

Didn’t have to rebuild, focused on Teach and healthcare infrastructure

Higher Tech = Higher prices

Question 12

How US Healthcare stands out from rest

Answer 12

spend alot more, relatively poor outcomes and characterized by inefficiency, inequity, and unaffordability

called “accident of history”, a WWII legacy

Many invested in current system, resisted changing it

Question 13

Early Employment-Based Insurance

Answer 13

Early plans generous, employer paid most or all premium, and provided first-dollar coverage (no deductible and mostly zero cost sharing)

retrospective “fee for service” payments to providers

No constrains on premiums or fees on services

Question 14

US vs UK

Answer 14

US
◉ Private coverage (until the mid 1960s)
◉ Lavish benefits for those who have coverage
◉ Covering even things that were not effective
◉ Retrospective, fee-for-service reimbursement
◉ High technology demand + no budget cap = very costly

UK
◉ National Health Service (= public, created 1946)
◉ Universal coverage
◉ Global budget: facilities work within an annual budget
◉ Shorter lengths of stay, fewer lab tests
◉ Less costly

Question 15

Roemer’s Law

Answer 15

In an insured population, a hospital bed built is a filled bed”

This was used as justification for “certificate of need” laws to limit hospital growth, had to show a need. mostly controversial and repealed by now.

Question 16

Technologic Imperative

Answer 16

Once technology is available, everyone wants it

A medical arms race, hospitals want it, doctors want to work at the best hospital etc.

Question 17

Framingham heart study

Answer 17

Big, ongoing NIH-funded study in boston. started 1948

Most of what we know about causes and epidemiology of cardiovascular disease is from this

Question 18

Medicare

Answer 18

Federal program
For retirees
Hospital and doctor visits
No drugs
Later included disabled and certain diseases

Question 19

Medicaid

Answer 19

state-administered program
For certain low income individuals but not all
Not for able-bodied adults
Prioritized children, pregnant women and blind people

Question 20

Moral Hazard

Answer 20

caused by 100% 1st dollar coverage, Fee-for-service, retrospective reimbursement

Doctor order more than needed cause “free”, patient wants all they can get or more…since its “free”…..spend way more and “over eat”

Question 21

Who ends up paying for “Moral Hazard”

Answer 21

The employee (YOU!) either by lost wages, premium, etc

Question 22

“3rd party payment” does what

Answer 22

Leads to market distortions, market failures

If patient does pay directly, don’t experience price as consequence

Question 23

Information asymmetry

Answer 23

Patient doesn’t have complete info, cannot distinguish necessary care from wasteful care.

MD is expert and patient relies on MD’s recommendation

Question 24

Supplier-induced demand

Answer 24

when providers are able to push consumers to consume more than they would have chosen to consume if they had been fully informed.

Question 25

RAND Health Insurance Experiment

Answer 25

study in 1970s

more cost sharing = reduces use of both effective and ineffective car

up to 30% lower utilization among those facing higher OOP costs

Question 26

Law of Diminishing Returns

Answer 26

as input are increased, there will be a point at which the marginal output will decrease

Question 27

Flat of the curve

Answer 27

when an additional input produces no additional output at all.

Question 28

Capitation

Answer 28

Per member per month payment/budget

Question 29

Managed care organization

Answer 29

Grew in popularity in 1990s, provide full range of care

Prospective budge for providers

Providers restrict care to what is necessary and effective.

Shifts financial risk from insurer (payer) to MD or hospital (provider)