Exam 2 Flashcards
- Which economic analysis approach has an outcome that is purely monetary (monetary values in the top and bottom of the ratio)?
cost benefit analysis
An externality can have a positive or negative impact. T or F.
T
Moral hazard refers to overutilization of health care services/the utilization of unnecessary health care services because health insurance exists. T or F.
T
An example of cherry picking is when an insurer tries to select the least costly people (the least likely to require a lot of medical care) to enroll in their insurance program. T or F.
T
What are the 2 types of policy analysis?
- prospective policy analysis
- descriptive policy analysis
What are the two qualities of the prospective policy analysis?
it is predictive and prescriptive
What are the 2 main approaches to prospective policy analysis?
- policy options analysis
- policy simulation or forecasting models
What are the 3 main approaches to descriptive policy analysis?
- retrospective analysis
- evaluative analysis
- economic analysis
Policy analysts need to possess ________ analytical skills to evaluate the consequences of alternative policies (statistics, cost-benefit analysis, program evaluation, decision analysis, etc.)
technical
Policy analysts need to understand political and ___________ behavior to be able to predict and perhaps influence the adoption and successful implementation of policies.
organizational
Policy analysts need to process an ___________ framework that can be used to address conflict between clients and the broader public interest
ethical
What are 4 techniques for policy analysis and policy research?
- cost-benefit analysis (CBA)
- cost-effectiveness analysis(CEA)
- cost-utility analysis (CUA)
- policy options analysis
The following is the goal of which policy analyses:
to minimize resource consumption in achieving the objective or maximize the amount of objective achieved given a fixed expenditure of resources in order to preserve resources for other valued and valuable uses.
economic policy analyses
What are the 3 types of economic policy analysis?
CBA
CUA
CEA
What is the purpose of CBA?
to determine which of alternative interventions, designed to achieve the same or different objectives, produces the greatest net monetary benefit
If you were to make CBA a ratio, what would be in the numerator and what would be in the denominator?
units of cost (monetary)/units of benefit (monetary)
If you were to make CEA a fraction, what would be in the numerator and what would be in the denominator?
units of cost (monetary)/unit of desired outcome
If you were to make CUA a fraction, what would be in the numerator and what would be in the denominator?
unit of cost (monetary)/unit of utility
What are cost and benefits measured in?
monetary units
What is the purpose of the CEA?
to determine which of alternative interventions are designed to achieve the same objective
Which economic policy analysis determines which alternative intervention produces the most of the desired outcome for a given level of expenditure?
CEA
Which economic policy analysis determines which alternative intervention cost the least to achieve a given level of expenditure?
CEA
In the CEA, how are costs measured?
in monetary units
In the CEA, how is effectiveness measured?
in a non-monetary unit (desired outcome)
What is the purpose of the CUA?
to determine which of alternative interventions, designed to achieve the same or different objectives
In CUA, how are costs measured?
in monetary units
In CUA, how is utility measured?
in a non-monetary unit, typically on a scale ranging from no utility to complete utility.
Example: life years saved (LYS), quality-adjusted LYS (QALYs)
Will all people place the same utility on the same goods or services?
no
What does utility mean?
- pleasure of satisfaction (value for money) derived by a person from the consumption of a good or service
- subjective or psychic return which cannot be measured in absolute or objective terms
An analysis that provides informed advice to a client that related to a public policy decision, includes a recommended course of action/inaction, and is framed by the client’s powers and values.
policy options analysis
What does a good policy options analysis do?
takes a comprehensive view of consequences and values
What is the weakness of a policy options analysis?
myopia from client orientation and time pressure
What are the 6 steps of a basic policy analysis process?
- verify, define, and detail the problem
- establish evaluation criteria
- identify alternative policies
- evaluate alternative policies
- distinguish among alternatives
- monitor implemented policy
What are the 5 elements of a policy options analysis?
- problem identification
- background
- landscape
- options (with criteria)
- recommendations
Of the 5 elements of a policy options analysis, which one is the key to analysis and frames the issue?
problem identification
Of the 5 elements of a policy options analysis, which does not allow for a yes/no answer and does allow for multiple options to be considered?
problem identification
Of the 5 elements of a policy options analysis, which provides key information/statistics needed to understand the problem being addressed and the options being considered?
background
What is the objective of the background portion of the policy options analysis?
to no only provide information that supports your recommendation
Of the 5 elements of a policy options analysis, which provides political and factual context by identifying key stakeholders and explaining key stakeholder views about salient issues?
landscape
In the options portion of the policy options analysis, all options must be assessed by the same ________.
criteria
All options must be within the client’s ________ and _________.
powers and values
Does all options have pros and cons?
yes
Of the 5 elements of a policy options analysis, which requires you to choose one of the options that were analyzed?
recommendation
What is the application of microeconomic tools to health issues and problems and study of societal allocation of scarce resources for health care?
health economics
What are the 3 key features of health economics?
- scarcity of resources/efficient allocation
- rational decision making
- marginal analysis
Quantity of goods and services that a consumer is willing and able to purchase over a specific time.
demand
What are the 5 things that can change demand?
- price
- income
- quality (perceived and actual)
- substitutes
- complements
What is the price elasticity of demand?
how responsive change in demand is to a one-percent change in price
What defines an inelastic product?
when the price of product changes, the demand for that product does not change
What is it called when people purchase more of goods and services because of the presence of insurance?
moral hazard
the amount of goods or services that producers are willing and able to sell at a given price over a given time.
supply
What are the 4 things that can change supply?
- price of goods
- input costs
- number of sellers
- change in technology
What is the supply elasticity?
percentage change in quantity supplied resulting from a one-percent increase in price of buying the good
is the health care field a perfectly competitive market?
no
What are the 6 aspects of a perfectly competitive market?
- goods offered by sellers largely the same
- many buyers and sellers (price takers)
- all resources are mobile
- firms can freely enter and leave the market
- no government involvement
- perfect knowledge and information
What is it called when resources are not allocated efficiently?
market failure
What are the 5 reasons for market failures?
- imperfect information
- concentration of market power
- consumption of public goods
- presence of externalities
- government interventions
What are the 2 types of public goods?
- non-rival
- nonexclusive
What does it mean for something to be non-rival?
more than one person can enjoy the good simultaneously
What does it mean for something to be nonexclusive?
impossible or too costly to exclude individuals from enjoying the good
What does consumption of public goods lead to?
free riders (underproduction of desired good)
What is it called when there is a positive or negative impact when one person’s actions create a benefit of imposing a cost on others?
externalities
What leads to underproduction or overproduction of goods from society’s prospective?
externalities
What is considered the membership fee of insurance?
premium
What are the 2 ways premiums are set?
- experience (requiring a check-up and questionnaire)
- community rating (everyone in the community will pay the same price for insurance)
The amount of money that you have to pay before your insurance kicks in and in order to get the benefit of negotiated rates.
deductible
What are the 3 things involved in cost sharing?
- co-insurance (percentage)
- co-payments (dollars)
- sometimes limits (ex. annual out of pocket limit)
This includes medical necessity, mandates, and limits.
benefit package
What is the death spiral?
when the pool of insured people are getting relatively sicker because those who are healthier are opting out of having insurance
What is asymmetric information in health insurance?
when the purchaser of insurance and the insurance company does not have the same information
What can adverse selection lead to?
the death spiral
What is caused when individuals who expect to incur high costs (high consumption of health care) prefer more comprehensive and expensive policies, which those who expect to have low cost (low consumption of health care) choose more restricted, less expensive plans?
adverse selection
What is “a phenomenon wherein the insurer is confronted with the probability of loss due to risk not factored in at the time of sale”?
adverse selection
What is it called when the insurer chooses to sell to individuals it expects to be low-cost (low consumption) and excludes those it expects to incur high costs?
cherry picking
Insurance companies need a large pool of insureds in a diverse demographic. T or F.
T
Insurance companies need reliable, current statistics on the probability of loss for each type of insurance offered. T or F.
T
Insurance companies need sufficient premium payments to cover the losses. T or F.
T
What created the first national standards regarding portability and accountability, guaranteed access and renewability, portability, and information privacy and security regulations?
HIPAA of 1996
Does HIPAA provide protection from individual plan to individual plan?
no
Does HIPAA reduce risk segmentation?
yes
Does HIPAA reduce access barriers due to health status?
yes
Does HIPAA prevent “job lock”?
yes
Does HIPAA limit preexisting condition exclusions?
yes
Does HIPAA provide protections if you are uninsured?
no
Does HIPAA provide limited protections without continuous coverage?
no
Does HIPAA provide limits on premiums or other health insurance costs?
no
Does HIPAA require employers to offer health insurance?
no
Does HIPAA require a certain set of benefits to be provided?
no
Prior to managed care, what type of fee basis was health insurance on?
fee-for-service basis
Prior to managed care, was there an incentive to do less or use/seek less expensive services?
no
Does managed care integrate payment and delivery of services?
yes
What are 3 features of managed care organizations (MCO)?
- defined benefit package for a pre-set fee
- providers network with contractural relationship with MCO
- financial incentives to control delivery, use, quality, cost
What are the 3 types of MCO plans?
- Health Maintenance Organization (HMO)
- Preferred Provider Organization (PPO)
- Point of Service (POS)
Which MCO plan requires patients to use a PCP gatekeeper (have referral for specialty care)?
HMO
Which MCO plan has the lowest payments for its members?
HMO
Which MCO plan has stringent quality and utilization standards?
HMP
Which is the most popular type of MCO?
PPO
Which MCO plan has a network of providers with a contractural relationship?
PPO
Which MCO plan is a hybrid model where patients can go out of network at higher costs but need a referral from in-network PCP?
POS
Pro or Con of MCO: may provide more plan choices for employee.
pro
Pro or Con of MCO: incentives for reduced unnecessary care.
pro
Pro or Con of MCO: may lower costs
pro
Pro or Con of MCO: quality controls, quality improvement
pro
Pro or Con of MCO: coordinated care
pro
Pro or Con of MCO: comprehensive benefits
pro
Pro or Con of MCO: concern about barriers to necessary care
con
Pro or Con of MCO: interference with provider/patient relationship
con
Pro or Con of MCO: reduced choice of providers in some arrangements
con
Pro or Con of MCO: increased cost for choice of provider in some arrangements
con
Pro or Con of MCO: concerns about quality of care, provider ethical concerns
con
What is the insurance policy that can be combined with a health savings account or a health reimbursement arrangement to allow you to pay for qualified out-of-pocket medical expenses on a pre-tax basis?
high-deductible health plan (HDHP)
What is the type of HDHP with high deductible and limited benefits (allowed under ACA for under 30s in exchange with some preventative care, not full minimum benefits)?
catastrophic plan
Name the insurance policy that is just stopgap, limited benefits and not a qualifying coverage?
short-term health insurance
Is employer-sponsored health insurance considered a MCP or private health insurance?
private health insurance
In 2016, what percentage of employers offered ESI (employer-sponsored insurance)?
56%
About how many people were in the individual marker in 2016?
25 million
What is the type of group health plan that means that the employer pays premium to insurance company; insurance company pays the claims of employees per contract with employer.
fully insured
What is the type of group health plan that means that the employer assumes financial risk of paying for health care benefits to its employees.
self-insured
What was the law that was intended to protect employee pension system from employer fraud and supposed to create uniform rules for administration of benefits.
Employee Retirement Income Security Act of 1974
Under ERISA, are self-insured employer plans considered insurance?
no
According to the ACA, under what circumstances are insurers allowed to vary premiums?
age, geographic area, tobacco use, and number of family members
Through the Health Insurance Reform, who are able to receive subsidies?
- individuals between 133% and 400% federal poverty limit (FPL)
- small businesses *under 50 employees)
For individuals between 133% and 400% FPL, do they receive subsidies if the employee’s share for coverage exceed 9.5% of income?
yes
What percentage of their premium income does the ACA require health insurance insurers in individual and small group markets to spend on medical care and health care quality improvement?
80%
What percentage of their premium income does the ACA require health insurance insurers in large group markers to spend on medical care and health care quality improvement?
85%
What are some essential health benefits in the individual and small group markets that were not covered prior to the ACA?
- maternity and new born care
- mental health and substance use disorder
- rehabilitative and habilitative services and devices
For Large Employer Plans, a health plan meets the minimum value standard if what 2 things apply?
- it’s designated to pay at least 60% of the total cost of medical services for a standard population
- its benefits include substantial coverage of physician and inpatient hospital services
For Large Employer Plans, what does it mean for the coverage to be affordable?
“a job-based health plan covering only the employee that costs [9.86]% or less of the employee’s household income.
What are the 6 adult preventative services to be covered by private plans without cost sharing?
cancer
chronic conditions
immunizations
health behaviors
pregnancy-related
reproductive health
If a state decides to opt out of the state health insurance exchanges, what must the federal government do?
create one for state residents
what are the 4 levels of coverage based on value in the state health insurance exchange?
- bronze
- silver
- gold
- platinum
How much does the insurance pay in the bronze level?
60%
How much does the insurance pay in the silver level?
70%
How much does the insurance pay in the gold level?
80%
How much does the insurance pay in the platinum level?
90%
Does state health insurance exchanges limit out-of-pocket costs?
yes
Does employees of small businesses have to offer insurance to their employees?
no
Are there a minimum set of benefits in state health insurance exchanges?
yes
What is another name for subsidies?
premium tax credit
When are marketplace enrollees eligible for premium subsidy?
if their income is between 100-400% FPL
What is the problem with the Family Affordability Glitch?
as long as the employee’s dependents have access to the employer-sponsored plan, their coverage is also considered “affordable”, even if the costs of adding them to the plan would cost well over 9.5% of the family’s income
What are 4 issues regarding marketplace plans?
- costs continue to rise - may discourage people from signing up and may also cause people to drop out
- market conditions and prices vary considerably, and change year to year
- health plans are saving money by limiting provider network - may be geographically restricted
- providers may refuse to participate in marketplace plans
Why does the people who are up to 133% below the FPL not have access to insurance?
because they live in states where Medicaid was not expanded
When is the ACA constitutional?
as a taxing power
When is the ACA unconstitutional?
as a commerce power
