Lecture 1 Intro to Health Policy and Management

Question 1

What is a deductible?

Answer 1

The amount you need to pay each calendar year before insurance kicks for non-preventive expenses. Usually choose an insurance plan w/ high monthly premium, deductible will be lower

Question 2

What is a co-pay?

Answer 2

A fixed amount you pay for a health care service, usually when you receive the service

i. amt can vary by type of service
ii. must also have a copay when you get a prescription filled
iii. copayment may/may not count towards deductible (depending on the plan)

Question 3

What is a co-insurance?

Answer 3

Once you have met your deductible, the plan pays a % and you pay the coinsurance

Question 4

What is a premium?

Answer 4

A monthly amount you pay to your health insurance company to maintain your health care coverage.

i. you may pay to the total cost or share the cost with your employer or union

Question 5

What is a formulary?

Answer 5

A drug formulary, list of prescription drugs, both generic and brand name, that are preferred that your health plan will cover

i. you will pay more if your doctor chooses a medication not listed on your health plan’s formulary

Question 6

What is an out of pocket maximum?

Answer 6

Limits the amount you can pay per year for medical expenses

i. consists of annual deductible, medical and prescription copay and coinsurance — but not premiums/payments made for non-covered services

Question 7

What is an HMO?

Answer 7

Health Maintenance Organization

i. must choose a PCP (primary care provider) from network of local health care providers and all care is coordinated with PCP
ii. need a referral for in-network specialists and hospitals – WONT COVER OUT OF NETWORK (unless true emergency)
iii. Premiums and OoP costs are lower

*if you don’t see a specialist a lot and like all are coordinated via PCP this is the best option

Question 8

What is a PPO?

Answer 8

Preferred Provider Organization

i. Offers network of health care providers, can receive care from in and out of network doctors (OoP costs are less w/ in network care)
ii. Don’t require you to choose a PCP and don’t require referrals for a specialist

*premiums, deductibles, and co-payment are higher

Question 9

What is the difference between in network and out of network?

Answer 9

IN-network: care is given by a provider who is in the group of physicians, hospitals, and other providers who agree to offer services to the medical plan at a lower price (negotiated rates”

Out of network: care is given by a provider that is outside the plan option network (higher rates)

Question 10

In-network/Out of network: which is covered under HMO vs PPO?

Answer 10

In-network: HMO
Out of network: PPO

i. this is the difference between the two; PPO allows out of network but you will have higher premiums, deductibles, and co-pays

Question 11

What is the point of service plan?

Answer 11

A combo of HMO and PPO. PCP is needed and must get referrals from the PCP if you want the plan to cover a specialist’s service

Question 12

What is “Risk” in the context of healthcare coverage/insurance?

Answer 12

Refers to the potential to lose money, earn less money, or spend more time w/ no additional payment

Question 13

What is Fee for Service?

Answer 13

Both insurance company and individual pay each time for each procedure that is conducted

Question 14

Who is at risk in Fee for Service? and what is the Problem

Answer 14

Usually the person paying the bill is the one at risk (could be payer, govern., agency, insurance company).

Generally there are more times the person is seen, then more the insurance company has to pay and the more people have to make copayments

Problem: MD will ask for more tests and insurance company can deny payment – person paying must pay more

Question 15

What is Payment by illness?

Answer 15

One sum is paid for full services delivered during one illness. Insurance companies use the concept of diagnostic related groups (DRG) for hospitals or global surgical fees for physicians, where all people w/ a certain diagnosis receive a certain amount

Question 16

Who is at risk with Payment by illness? and what is the problem?

Answer 16

Both providers for length of stay (LOS) and # of postoperative visits an the insurer for the # of admissions

Problem: hospitals or surgeons want to decreases LOS or post-operative visits, care may not be provided as completely

Question 17

What is per diem?

Answer 17

Hospital is paid by a fixed amount for all services delivered during one day. Called bundling of services

Question 18

Who is at risk with per diem?

Answer 18

Both the providers for # of tests and insurer for LOS

Question 19

What is Capitation?

Answer 19

Provider is paid in one payment for every patient cared for during a month or year. (for physicians) so the insurer pays physician for people signing up

Question 20

Who is at risk with Capitation? and what is the Problem?

Answer 20

The provider because the insurance company only pays one time and if the person keeps getting sick they do not pay more

Problem: There us is only an incentive for MDs to sign up healthy people, MDs need more capita (headcount) so they do not want sick or older patients
i. however, to mitigate the financial risks associated with capitation payments, 2 methods have been developed: carve outs and risk adjusted capitatio

Question 21

What are accountable care organizations?

Answer 21

Groups of providers and other providers to coordinate patient care – both financial and clinical

i. breaks down the silos between different parts and types of carea a patient might need
ii. coordinate providers and provide high qual. care at lower cost
iii. Goal = reduce duplication and unnecessary interventions and keep people healthy and reduce ER visits, hospitalizations, etc.