Watkins Exam #2 Flashcards
1
Q
Why have insurance premiums increased so much since 1996?
A
- Managed Care Backlash
- Decreased competition among providers (aka–Provider Consultation)
2
Q
Is when Physicians and patients complain about the nature of the restrictions that managed care plans impose
A
Managed Care Backlash
3
Q
What do PHYSICIANS argue? /
A
Physicians argue that they’re losing money because managed cared plans were successful in reducing fees to providers
4
Q
What do PATIENTS argue?
A
Patients argue about a confusion between Quantity with Quality (The Chuck-A-Rama Effect)
5
Q
Mention the main difference between HMO & PPO
A
HMO’s has a very few providers within their network, and they can negotiate lower rates and premiums to providers
PPO’s- They can’t guarantee the volume, therefore their premiums are higher
6
Q
What is Provider Consolidation?
A
Evidence of a wide variety of anticompetitive behaviors within healthcare providers, Price Fixing & Hospital Merges
7
Q
Is provider Consolidation Always Anticompetitive
A
No, because the merge of two different hospitals can cause other providers to do the same
8
Q
Monopoly vs Monopsony
A
- Monopoly Power is the Large seller, they control price by controlling supply
- Monopsony Power is the Large buyer, they control price by controlling demand
9
Q
The economic way of quantifying the effect of a change in price on the quantity demanded
A
Price Elasticity
10
Q
A statistical process that takes into account the underlying health status and health spending of the enrollees in an insurance plan when looking at their health care outcomes or health care costs
A
Risk Adjustment
11
Q
Mention the Medicare’s original risk adjustment model
A
Adjusted Average Per Capita Cost (AAPCC)
12
Q
What is the meaning of AAPCC
A
Adjusted Average Per Capita Cost
13
Q
Mention the AAPCC Variables
A
- Age
- Gender
- Institutional Status (nursing home)
- Medicaid Status
- Active Worker Status (employer-sponsored Coverage)
14
Q
Explain the Measures of Potential Risk Factors Used in the RAND Study
A
- Demographic Measures aka (age, gender, location, eligible for welfare at baseline)
- Subject Health Status
- Physiologic Health Status
- Prior Utilization
15
Q
What was the name of the New Medicare’s Risk Adjustment model
A
Centers for Medicare and Medicaid Services Hierarchical Condition Categories (CMS-HCC)
16
Q
Mention the characteristics of the New Medicare’s Risk Adjustment model
A
- Balanced Budge Act (1997) required new model that better incorporated health status.
- Hierarchical Coexisting Conditions
- Renamed: Centers for Medicare and Medicaid Services Hierarchical Condition Categories (CMS-HCC)
17
Q
Mention the Uses of Risk Adjustment
A
Adjusting risk across plans in state insurance exchanges
Reduce payment to plans with disproportionately healthy enrollees
Raise payment to those with less-healthy subscribers
18
Q
How does the ACA impacted Medicare?
A
It helps lower prescription drug costs for Medicare beneficiaries & helps expand Medicare preventive benefits.
19
Q
When insured individuals bear a smaller share of their medical care costs, they are likely to consume more care
A
Moral Hazard
20
Q
Mention the factors about the RAND Health Insurance Experiment (HIE)
A
- Robust methodology
- Consistent model applied across many health services
- Results continue to be confirmed by smaller-scale, more narrowly focused studies
21
Q
Mention the modern pharmacy benefits programs co-payments
A
Generics
Preferred brands
Non-preferred brands
Biotech drugs
22
Q
Is the clinical restriction on utilization designed to approve or disapprove care based on clinical necessity.
A
Utilization Management
23
Q
Does Utilization Management prevents patients from obtaining services?
A
NO! It simply dictates that the insurer is not liable for the cost of the service if UM procedures are not followed.
24
Q
Mention all the UM Techniques
A
Preadmission Certification Concurrent Review Retrospective Review Denial of Payment Mandatory Second Surgical Opinion Case Management Discharge Planning Gatekeeper Disease Management Intensive Case Management
25
What is Pre-admission certification?
Refers to approval by a case manager or insurance company representative (usually a nurse) for a person to be admitted to a hospital or in-patient facility, granted prior to the admission
26
Mention the Home health types of care and qualifications:
- Skilled Nursing
- Physical Therapy
- Occupational Therapy
- Speech therapy
27
What are the benefits of Home Health?
* Some facilities have "United Way" which is a Non-profit program
28
Medicaid is for?
low income people, pregnant women, children, the elderly, and those disabilities
29
What is FMAP?
Federal Medical Assistance Percentage
Is the funding based on expansion., states Federal government matches state Medicaid spending based of the ratio of state to federal per capita income
30
Describe the state share formula (FMAP)
State share = (state income)2 / (federal income)2 x.45
31
What does it mean someone is Categorically Needy?
When an individual falls on the following categories:
- Low income
- Blind
- in LTC
- SSI recipient
32
What does it mean to be Medically Needy?
- When someone Incomes is adjusted for medical spending
33
What does it mean to be in Special Groups?
Also known as " Dual eligible", is when Medicare pays Parts B & D premiums and cost sharing
34
Which Medicaid Enrollees have the higher enrollment?
Children and Adults, however the Disabled & the elderly have the highest expenditures
35
What is a RCO?
Regional care organizations
36
What is CHIP?
(Children's Health Insurance Plan)
| Medicaid program for kids created in 1998 on the Balance Budget Act
37
Federal Matching funds for coverage of lower income children are?
Up to 350% of poverty line
38
Why is CHIP a separate program in some states
Because is a stigma, for example the state of Washington calls it Apple
39
How come the state of Utah came up with co-pays?
By the price of cigarettes'
40
What is "Crowd-Out"?
Is when people whom are enrolled in private coverage jump to Federal coverage (Medicare)
41
In which public program "Crowd-Out" is most prevalent and why?
"Crowd-out is more prevalent in CHIP, because parents can save more money
42
Joint Federal-State program (Medicaid) is a needs-based program designed to provide health insurance coverage to what kind of groups?
- Pregnant Woman
- Disabled
- Children
- Elderly
43
TRUE or FALSE: The Federal government provides the bulk of the funding for Medicaid and strictly dictates the eligibility requirements as well as services that must be covered
FALSE
44
TRUE or FALSE : Elderly and disabled individuals comprise the majority of the enrolled Medicaid population and are responsible for the majority of Medicaid expenditures.
FALSE
45
Easy way to describe "Crow-Out"
Is when a public program such as Medicaid causes people to drop private coverage and shift to the public program
46
How is the Federal Contribution determined? (FMAP)
Federal government matches state Medicaid expenditure based of the ratio of state to federal per capita income
47
Explain the graphic of Medicaid Enrollment & Expenditures
In the graph what is showed is that the two top enrollees to Medicaid are Children (49%) and Adults (26%) however, the most expensive groups are Disabled (42%) and Elderly (23%)
48
In 2005 Congress gave states ability to charge copays up to 10% of the costs of services for those with family incomes between 100 – 150% of FPL- What does this means?
Those with higher incomes pay more. But total cost sharing MAY NOT EXCEED 5% of family income
49
What could reduce the "Crow-Out" from Chip?
Assessing states FPL's of families
50
What is the average cost of a Nursing Home in America?
$60,000–$70,000/yr
51
Where the HI (Hospital Insurance) is funded
FICA, or in other words payroll taxes
If you're self employed you pay double of payroll taxes
52
HI Covers?
Medicare Part A
53
Supplemental Medical Insurance (SMI) where it gets the money
By Premiums & the General Tax Revenue
It covers part B & D
54
Where Medicare part C gets its funding?
From both General Tax Revenue and Payroll Taxes
55
What is a spell of illness and when it begins and when it ends
Begins with a person has been in a hospital for 3 days, and it ends when a person pass 60 days
56
What is the "Donut Hole"?
Is that weird "gap" on coverage, and its based on how much a person expends for Prescription Drugs
57
Mention the reasons of the HI decline
- Retirement of the baby boomers (fewer people paying payroll FICA taxes
- More people utilizing HI Benefits
- Increasing healthcare utilization
- Expanding healthcare technology and treatments
- People living longer
- Increasing healthcare
58
Mention the main factors that lead to Sponsored Health Insurance
- Wage and Price controls during WWII
- Labor Unions
- Declaration of Health Insurance
- Collective Bargaining
59
What was the original "Hospital Service Plan"? How they came about? and what they evolved into?
It was created in Dallas, TX. Baylor insured school teachers for $0.50 a month for coverage of 21 days in their hospital.
They came about because of the great depression, at that time hospital were having a hard time collecting money or revenue
60
Define:
HMO
PPO
POS
- HMO: Health Maintenance Organization
- PPO: Preferred Provider Organization
- POS: Point of Service
61
Is when someone takes a managed risk by setting aside a pool of money to be used in case of medical emergencies, however it can be a potentially large loss
Self-insure
62
Describe the main characteristics of Medicare and Medicaid
Medicare - Public Insurance program federally funded
Consists of part A, Hospital, Part B, Physician Coverage, Part C, Medicare Advantage, Part D, Prescription drugs
Medicaid - Public insurance program, funded jointly between the Federal Government & State for those who are: low income, disabled, pregnant woman, elderly and children
63
What is "Risk Premium"
The maximum amount a person will pay to avoid a medical situation that may be costly
64
Mention at least two advantages of purchasing health insurance through an employer
Lower Premiums due to favorable selection & Tax-exempt status
65
What is "Risk Aversion" how does it affect their level of insurance?
The amount of money a person is willing to pay to avoid potential risks. If a person is more risk adverse they will purchase more insurance coverage in contrast, a person who is less risk adverse will purchase less coverage
66
What is the meaning of "Adverse Selection"
Is when the consumer knows more about their insurance cost & coverage, and therefore it will utilize it
67
What is "Favorable Selection"
When an insurance company attracts low utilizers of healthcare services
68
What is the "HMO Effect"?
Is when HMO's try to keep people out of the hospital or the less time possible
69
What is the best predictor of utilization and why is it important to predict utilization or expenditures?
The best predictor is prior utilization, that insurance companies don't lose money
70
What characteristics health insurance companies can use to determine a person's insurance use?
- Age
- Tobaccos use
- Geographic location
- Numbers of members in the family
71
What is Community Rating?
Is when all individuals are put into the same risk pool. Insurance companies compute the claim experience per person from the resent past then add inflation and anticipated changes
72
What is Manual Risk?
When insurance companies seek to identify characteristics of individuals or groups for example: age, gender, location, occupation, health status
73
What is the PPACA's Health Insurance Tax "HIT"?
HIT an "annual fee on health insurers"
74
Which public insurance program adopted a risk adjustment model? and how was the model applied?
Medicare Part C (Medicare Advantage), use of CMS Hierarchical Condition Categories (HCC) Takes into account 70 clinical conditions, demographics & location
75
How price elasticity affects health services?
Price elasticity affects more Mental Health Services, while Hospitals are the least affected
76
What is Moral Hazard?
Is the law of demand, at lower prices people buy more goods, at higher prices people buy less goods
77
How Moral Hazard impact users?
The more people pays out of pocket for health services the less likely they are to use health services
The higher the deductible, the less it cost the insurance carrier. Lower copays or coinsurance increase the likelihood of healthcare usage
78
What was the RAND-HIE (Health Insurance Experiment)?
It was a study from 1974-1977 on the price responsiveness of consumer health services
The experiment fund that those who face no out of pocket cost used more medical expenditures, therefore insurance deductibles are an important tool to reduce usage and costs
79
Why is the RAND-HIE known as the "Gold Standard"?
Because the study overcame adverse selection, covered almost all services
80
What utilization management techniques have been found to be the most effective?
Preadmission certification & concurrent view
81
What is Selective Contracting?
Is the process whereby managed care plans enter into contracts with some, but not all the providers of the market
82
How Selective Contracting affects the price of Healthcare services?
It drives health services closer to marginal cost, instead of being determined on services, amenities and quality it adds in price
83
What are the main characteristics of Freestanding Emergency Rooms?
Why is the price different that an Urgent Care?
Are more expensive, faster care, & offer more services such as X-rays and MRIs
84
What was happening during the "Golden Era" of Hospitals?
Medicare, Medicaid paid hospitals on allowable cost, and commercial insurances tended to pay billed charges
85
Does utilization management prevents patients from obtaining healthcare services?
No, it just means that the patient is responsible for the bill
86
Mention and describe the four types of Utilization Management Techniques
* Preadmission certification: non-emergency hospital admissions need to be approved by insurer before the patient is admitted
* Concurrent view: Specifies the number of Hospital days that are authorized to a patient to stay. Additional days must be requested by a doctor
* Case Management: High cost cases are given to a coordinator who has authority to substitute otherwise uncovered services as lower cost or more appropriate alternatives to covered services, such as Home healthcare
* Gatekeeper: Is when an insurance company assigns a primary care physician is assigned to each subscriber, the physician authorize visits to specialist, otherwise becomes responsible for charge
87
What is the meaning of a "Gatekeeper"
Is when an insurance company assigns a primary care physician is assigned to each subscriber, the physician authorize visits to specialist, otherwise becomes responsible for charge
88
Who are more effective using Selective Contracting and why?
HMO's because they guarantee a higher volume with a contact
89
True or False: most physicians have contracts with managed care plans?
True: 91% of physicians have contracts with managed care plans
90
How do physicians benefit from managed care plans?
Increased volume of patients make up for the lower fees
91
Describe what is Fee-for-Service payment system
Is when the Provider charges for each service they provide
92
What is capitation payment?
The provider is paid for a number of expected people (it decreases utilization)
93
How did Selective Contracting begin?
1983 in California, the CA legislature passed 2 laws allowing Medicaid, to selectively contract with some hospitals providers and also allowed private insurances to selectively contact with some providers
94
What trends have been occurring in Physician Incomes and Fees Physician Compensation Methods
Lower incomes, lower fees for contracts with managed care & Fixed Salary performance
95
What is Monopsony Power?
Single large buyer, price to the hospital declines when the insurer has monopsony power
96
What is Monopoly Power?
Single large seller, Price to the hospital increases when the hospital has monopoly power
97
What are the growth trends for HMOs and PPOs? why?
Decline in HMO's, increase in PPOs. People want to choose their doctor and large networks
98
What is provider consolidation?
Merges between providers
99
How does the ACA impact provider consolidation?
Increasing provider consolidation, decreasing private practice
100
What is a Health Savings Account?
HSA allow individuals or employers to contribute money to a tax-sheltered account that is used to pay for qualified services. Balances can be rolled over from year to year
101
What is a Flexible Spending Account?
FSA is a tax-sheltered account by an employer, does not roll over, individuals must use it or lose it
102
What is a small group market and what is the nature of coverage offered?
Employers with >50 employees, if insurance is offered usually one plan is offered.
Employers with >10 employees are least likely to offer insurance
103
Why do small group markets offer health benefits?
Tax deduction, care about employees, helps keep employees
104
Describe Medicaid
Joint Federal & State program, base on income for families, pregnant women, children, elderly, and the disabled.
Has largely expanded in states whom elected to do so
105
What is CHIP, and how is it funded?
CHIP is a state & federal program for low income children up to 300% FPL
106
What does "Crow-out" means?
Is when a public program causes people to drop out of private insurance and shift over to public programs such as Medicaid
107
What is a long-term insurance?
Is a type of insurance for long-term care, serves as a protection to save money for the future
108
Describe Medicare:
Federally funded program for the Elderly age 65+., it provides Hospital Insurance, Inpatient insurance, Prescription Drugs coverage or Medicare advantage
109
How do you become eligible for Medicare?
Working 10 years & paying FICA payroll taxes, reaching age 65
110
What are the parts/components of Medicare?
Part A: Hospital, hospice, skilled nursing facilities
Part B: Outpatient services
Part C: Medicare Advantage, combination of part A&B
Part D: Prescription Drugs.
111
How are the trust funds for Medicare Funded?
Payroll Taxes by current employees and employers
