Vocab 1

Actual Price is fees collected for good or service. Differences are provider discounts

expected insurance payments are equivalent to premiums paid by beneficiaries

High risk individuals have more information on their health status than their insurer and are able to buy insurance at a premium based on a lower risk group

Free standing outpatient facility that performs certain types of procedures

National organization (1897) that represents the collective interest of physicians

Legislation that promotes competition in US economy

Laws that lessen price competition by permitting any physician on the provider panel

agreement to accept the approved fee from the third party payer and cannot charge the patient more, other than copays

Physician collects form the patient, balance owing after insurance payment

Legal or economic limits to entry into an industry, i.e. licensure laws, patents, economies of scale

% of total premium paid out in benefits / price of insurance

Non-profit health insurers that provide insurance for hospital (BC) and physician (BS)

form of national health insurance with medical service free to everyone, providers paid by government, expenditure limits used to restrict cost growth

provider coordinates all medical services in the least costly manner by monitoring cost of hospital use, increasing physician productivity, prescribing less expensive drugs, and being innovative in delivering medical services. However, the provider then had incentive to reduce the use of services and decrease patient access.

risk-sharing arrangement for provider to receive a predetermined fixed payment per member per month (PMPM) to provide all contracted services

measure of relative complexity of the patient mix treated in a given medical care setting

State laws requiring health care providers to receive prior approval from a state agency for capital expenditures exceeding certain predetermined levels

physicians charge higher prices to those with higher income so they can charge lower prices to those with lower incomes

fixed % of provider's fee made by the insurance beneficiary at the point of service

Insurance premium is the same to all insured, regardless of their claims experience or risk group

wages and salaries are based on an evaluation of each position, including skill, effort, work conditions, responsibility, instead of supply/demand conditions

Interaction between a large number of buyers and suppliers where no single seller or buyer can influence the market price

regulation or legislation has large effect on a group to make it worthwhile for that group to invest resources to forestall or promote that effect

Part of Consumer Price Index, surveys spending patterns over period of time. Consists of 1.interview survey to determine expenditures and 2. diary or record of survey in which individuals are asked to record small frequently purchased items

Bureau of labor statistics used as a measure of the rate of inflation or the rate at which a family's income would have to increase to keep up with rising prices.

consumers choose the goods and services they can purchase with their income

approaches used to reduce health care costs i.e. utilization review and deductibles

Index of the price of medical care based on how the price of treatment for a particular diagnosis changes over time

Belief that providers charge a higher price to privately insured patients because some payers (Medicaid or uninsured) do not pay full costs

Determining which programs and/or inputs are least costly for achieving a given objective

combo of services and/or inputs used to provide medical care that are both technically and economically efficient

additional contribution to output of health input declines as more of that input is used

marginal utility of money decreases as the person's income or wealth increases

consumers pay a flat amount for services before their insurance picks up all or part of the remainder of the price of that service

Increase/Decrease in demand due to changes in non-price factors of demand

demand for particular services or input is based on the demand for service for which it is an input

employee wage relative to other inputs, employee marginal productivity, demand, price

method of reimbursement established under Medicare to pay hospitals based on fixed price per admission

burden of tax program is spread over a large population and is relatively small per person so that per person cost of opposing such a burden exceeds the actual size of the burden on the person

Financial Aid targeted to a specific group

occurs when demand is increasing more rapidly than supply so that an equilibrium price has not yet been established

quantity demanded exceeds the quantity supplied at a given price

optimal rate of output occurs when all marginal benefits equal all marginal costs

theory of legislative and regulatory outcomes that assumes political markets are no different from economic markets in that organized groups seek to further their self interest

relationship between long run average total cost (LRATC) and size of firm: as firm size increases, LRATC falls, reaches a minimum and eventually rises. In competitive markets each firm operates at that size that is the lowest point on the LRATC curve. The larger the firm size required to achieve the minimum costs of production, the fewer the number of firms will be able to compete

Federal law that applies to employee welfare plans and preempts all state laws with regard to reporting and disclosure policies, applicable to self funded plans

health reform plan where all employers are required to provide to medical insurance to their employees

value judgment underlying national health insurance in which the financial barriers to medical care would e the same for all

value judgment underlying national health insurance in which everyone should have equal consumption of medical services regardless of economic or other factors affecting utilization

weighted sum of the utilities of each outcome with the weights being the probabilities of each outcome. With regard to the demand for health insurance expected utility has a linear relationship.

Insurance premiums are based on the claims experience or risk level of each insured group

When an action undertaken by an individual or firm has secondary effects on others and that these effects are not taken into account by the normal operations of the price system

payment method for medical care services in which payment is made for each unit of service provided

1910 publication that was a critical report evaluating the medical training of physicians in the US and Canada. This report led to restructuring of the education and training of physicians and the eventual closure of many medical schools

Government agency that regulates entry into the US market of all drugs and relevant medical devices by requiring manufacturing firms to demonstrate that their products are safe and efficacious

List of prescription drugs reimbursed under a managed care plan

Non-profit organizations that own plant, property, and equipment associated with medical practice and employ non-physician employees. The foundation contracts with the medical group on a mutually exclusive basis to see all of the foundations patients. The foundation controls the contracts with payers, owns the medical record, and distributes a negotiated share to the medical group

Medicare/Medicaid original legislation in which all beneficiaries had to have access to all providers, this precluded closed provider panels, HMOs, and is considered to be anti-competitive because it limits competition and beneficiaries could not choose a closed provider panel in return for lower prices or increased benefits