Test 2! Flashcards
What is the price elasticity of healthcare? What does this mean?
The price elasticity of healthcare is -.2 which means that for every 10% rise in out of pocket costs the use is reduced by 2%
What is moral hazard? How does it impact insurers?
Moral hazard is the law of demand which is that, at a lower price, people buy more of a good. People with insurance tend to use it more. Insurers combat this by lowering the premiums but raising copays/coinsurance (more out of pocket expense) to push patients up the demand curve. UM tools are also used.
Tell me about the RAND study. Why is it the gold standard?
The RAND-HIE was a useful study on adverse selection It randomly assigned families to a wide range of plans with varying coinsurance rates. Both urban and rural areas in 4 census regions. 14 fee for service plans and some in Seattle were enrolled in an HMO.
It’s the gold standard because it avoided the problem of adverse selection. It investigated a wide range of health services and the mos trecent studies have validated the RAND results.
Talk about 3 areas of the RAND study and give some numbers with them!
Hospital services, physician services, and prescription drugs
Hospital services: 29% increase in use between free care and 95% coinsurance rate and 30% higher inpatient expenses.
Physician Services: Free care resulted in 37% more visits that the 25% group and 67% higher than the 95% group. Copayments have a big influence on utilization on physician services
Prescription drugs: About as price sensitive as physician services. 76% on the free plan vs the 95% coinsurance rate.
Talk about freestanding ERs
They are like urgent cares…but ERs. They still bill like an ER and have a relatively low copay ($50-100). People are worried that the high costs of these ERs will drive up health insurance premiums (people aren’t discretionary in ER usage). HCA is the head of the big drive in building these facilities, with the biggest number of them being in Houston.
UM techniques: do they prevent/preclude patients from obtaining healthcare?
NO!
Preadmission certification
insurer requires that nonemergency hospital admissions be approved by the insurer prior to admission
Concurrent review
Used in conjunction with preadmission. Specifies the number of hospital days a patient is authorized to stay.
Retrospective review
Inpatient review undertaken after the patient has been discharged. If the insurer determines that the patient should not have been admitted or should not have stayed as long, it will advise the provider to follow admission protocols
Denial of Payment
Used with retrospective review. If the patient should not have been admitted or stayed too long, then the insurer will not pay for the inappropriate admission/days.
Mandatory second surgical opinion
duh.
Case management
Program to identify high-cost cases. Case coordinator has authority to approve the substitution of of some otherwise uncovered services as lower-cost or more appropriate alternatives to covered services.
Discharge planning
Program that requires the provider to have a plan in place at the time of admission for the patient’s care on discharge from the hospital
Gatekeeper
PCP must approve specialists
Disease Management
Program that provides coordination of care across multiple providers for patients with chronic diseases for which there are well-defined practice guidelines.
