Vocab 1

  1. Actual vs List Price
    Actual Price is fees collected for good or service. Differences are provider discounts
  2. Actuarially fair insurance
    expected insurance payments are equivalent to premiums paid by beneficiaries
  3. Adverse Selection
    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
  4. Ambulatory Surgical center
    Free standing outpatient facility that performs certain types of procedures
  5. American Medical Association
    National organization (1897) that represents the collective interest of physicians
  6. Antitrust laws
    Legislation that promotes competition in US economy
  7. Any willing provider Laws
    Laws that lessen price competition by permitting any physician on the provider panel
  8. Assignment/participation
    agreement to accept the approved fee from the third party payer and cannot charge the patient more, other than copays
  9. Balance Billing
    Physician collects form the patient, balance owing after insurance payment
  10. Barriers to Entry
    Legal or economic limits to entry into an industry, i.e. licensure laws, patents, economies of scale
  11. Benefit/premium ratio
    % of total premium paid out in benefits / price of insurance
  12. BlueCross Blue Shield
    Non-profit health insurers that provide insurance for hospital (BC) and physician (BS)
  13. Canadian type health system
    form of national health insurance with medical service free to everyone, providers paid by government, expenditure limits used to restrict cost growth
  14. Capitation incentives
    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.
  15. Capitation payment
    risk-sharing arrangement for provider to receive a predetermined fixed payment per member per month (PMPM) to provide all contracted services
  16. Case mix index
    measure of relative complexity of the patient mix treated in a given medical care setting
  17. Certificate of Need laws
    State laws requiring health care providers to receive prior approval from a state agency for capital expenditures exceeding certain predetermined levels
  18. Charity hypothesis of physician pricing
    physicians charge higher prices to those with higher income so they can charge lower prices to those with lower incomes
  19. Coinsurance/Copayment
    fixed % of provider's fee made by the insurance beneficiary at the point of service
  20. Community rating
    Insurance premium is the same to all insured, regardless of their claims experience or risk group
  21. Comparable worth-based wages
    wages and salaries are based on an evaluation of each position, including skill, effort, work conditions, responsibility, instead of supply/demand conditions
  22. Competitive markets
    Interaction between a large number of buyers and suppliers where no single seller or buyer can influence the market price
  23. Concentrated interest
    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
  24. Consumer expenditure Survey
    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
  25. Consumer Price Index
    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.
  26. Consumer Sovereignty
    consumers choose the goods and services they can purchase with their income
  27. Cost containment programs
    approaches used to reduce health care costs i.e. utilization review and deductibles
  28. Cost of Treatment Price Index
    Index of the price of medical care based on how the price of treatment for a particular diagnosis changes over time
  29. Cost shifting
    Belief that providers charge a higher price to privately insured patients because some payers (Medicaid or uninsured) do not pay full costs
  30. Cost-effectiveness Analysis
    Determining which programs and/or inputs are least costly for achieving a given objective
  31. Criteria for cost minimization
    combo of services and/or inputs used to provide medical care that are both technically and economically efficient
  32. Declining marginal productivity of health inputs
    additional contribution to output of health input declines as more of that input is used
  33. Decreasing marginal utility of wealth
    marginal utility of money decreases as the person's income or wealth increases
  34. Deductable
    consumers pay a flat amount for services before their insurance picks up all or part of the remainder of the price of that service
  35. Demand shift
    Increase/Decrease in demand due to changes in non-price factors of demand
  36. Derived Demand
    demand for particular services or input is based on the demand for service for which it is an input
  37. Determinants of firms demand for employees
    employee wage relative to other inputs, employee marginal productivity, demand, price
  38. Diagnosis related Groups (DRG)
    method of reimbursement established under Medicare to pay hospitals based on fixed price per admission
  39. Diffuse costs
    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
  40. Direct Subsidies
    Financial Aid targeted to a specific group
  41. Dynamic shortages
    occurs when demand is increasing more rapidly than supply so that an equilibrium price has not yet been established
  42. Economic Shortages
    quantity demanded exceeds the quantity supplied at a given price
  43. Economic Efficiency
    optimal rate of output occurs when all marginal benefits equal all marginal costs
  44. Economic theory of government
    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
  45. Economies of scale
    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
  46. Employee retirement income Security Act of 1974
    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
  47. Employee mandated health insurance
    health reform plan where all employers are required to provide to medical insurance to their employees
  48. Equal financial Access
    value judgment underlying national health insurance in which the financial barriers to medical care would e the same for all
  49. Equal Treatment for Equal needs
    value judgment underlying national health insurance in which everyone should have equal consumption of medical services regardless of economic or other factors affecting utilization
  50. Expected utility
    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.
  51. Experience Rating
    Insurance premiums are based on the claims experience or risk level of each insured group
  52. Externalities
    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
  53. Fee for Service payment
    payment method for medical care services in which payment is made for each unit of service provided
  54. Flexnar report
    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
  55. Food and Drug Administration
    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
  56. Formulary
    List of prescription drugs reimbursed under a managed care plan
  57. Foundations for medical care
    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
  58. Free Choice provider
    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
Card Set
Vocab 1
Vocab quiz 1