Health Care Financing

Question 1

Why was WWII a spring board for insurance?

Answer 1

Wage freeze
Created incentive to increase fringe benefits in order to bargain with unions
Medical insurance quickly became a primary benefit that the employer paid for

Question 2

Pre WW2 insurance?

Answer 2

9% of population

Question 3

After WW2 (by 1952) insurance?

Answer 3

> 50% of the population had insurance

Question 4

Why is insurance needed?

Answer 4

Mitigate (reduce) the financial risk of the insured (lost income)
Pay premiums now so if large sum is needed later the insurer pays most of it, thereby protecting the insured’s income
Premiums paid by the many reduce the financial risk of the few who need it

Question 5

Way to pay for insurance:

Answer 5

private

public

Question 6

Who is paying for private insurance?

Answer 6

Employers who pay for 75+% of premiums

Individual where insured pays 100% of premiums

Question 7

Who is paying for public insurance?

Answer 7

government sponsored insurance

Taxes pay for all or most of the premiums

Question 8

What happens to prices when third parties are involved?

Answer 8

increase

Question 9

Moral hazard and provider behavior:

Answer 9

Moral hazard will also drive decisions health care leaders make
More of that which pays better
Less of that which pays less

Question 10

When did APTA secure coverage for PT services?

Answer 10

under Medicare as the bill was being worked in Congress in 1964

Question 11

Secondary effect of PT being covered under Medicare?

Answer 11

effect of PT being included in most insurance benefit plans

Question 12

What determines who has access to health care services?

Answer 12

insurance or lack thereof

Question 13

What is a moral hazard?

Answer 13

Demand for a product/service goes up when it is paid for by another

Question 14

Community Rating

Answer 14

everyone in that insurance plan pays the same premium

Question 15

Experience Rating

Answer 15

businesses pay different premium amounts based on the health (or healthcare utilization) of their employees

Question 16

In which rating does the employer pay less in premiums in they have healthy people?

Answer 16

experience rating

Question 17

Health Care Expenditures =

Answer 17

Payment X Quantity/Utilization

Question 18

Payers can influence health care expenditures by manipulating:

Answer 18

Amount actually paid (not what providers charge) = Allowable

Utilization

Question 19

Is rationing implicit or explicit?

Answer 19

implicit

Question 20

How is rationing implicit?

Answer 20

by manipulating PRICE (payment)
utilization
knowledge

Question 21

Utilization

Answer 21

PCP gatekeeper

Insurer utilization review and determination of “medically necessary” services: subjective and arbitrary

Question 22

Knowledge

Answer 22

Hidden insurance restrictions

One page summary when signing up, then 50+ page manual with details about what is covered and what is not covered

Question 23

What is a favorite method to pay less for a given service?

Answer 23

discounted fee-for-service (DFFS)

Question 24

How to reduce cost?

Answer 24

1. Less equipment
2. Fewer supplies
3. Reduce public relations and marketing activities
4. Outsourcing
5. Type (cost) of staff
   a. Professional versus mid-level versus technician/aide
6. Quantity of staff
   a. Productivity = ratio of output (e.g., units billed) to input (hours paid)
7. Change goals
   a. Move to next level of care as soon as possible instead of aiming for complete independence in current setting
8. Flattened administrative/management structures

Question 25

How is cost transferred to the patients?

Answer 25

deductible
copay
coinsurance

Question 26

Deductible

Answer 26

amount insured must pay up front before insurance pays for anything

Question 27

Copay

Answer 27

predetermined amount payable to the provider that is due at the time service is rendered

Question 28

Coinsurance

Answer 28

percentage paid by the patient after the service is complete and the insurer determines, via the Explanation of Benefits (EOB), what the patient owes toward the allowable