Module 10 lecture, part 2 Flashcards
What is defensive medicine?
Unjustified medical tests and txs done for self-protection against the possibility of litigation
Along with malpractice insurance, this is costly and inefficient
How does fraud and system abuse contribute to cost escalation?
Knowing disregard of the truth
Major problem in Medicare and Medicaid
Falsified billing claims or cost reports
Unnecessary svcs provided
Upcoding: billing for a higher-priced svc when a lower-priced svc was delivered
Receiving kickbacks for referrals and self-referrals
How do practice variations contribute to cost escalation?
Geographic variations in tx patterns and utilization
Signal gross inefficiencies in the system and unfairness
Compromise both cost and quality
What are the two main approaches to cost-containment?
Regulatory approaches
Competitive approaches
Aspects of the single-payer system in other industrialized countries
Global budgets
Top-down control over total expenditures
Aspects of fragmented approaches in the US
No system-wide planning and controls
A combination of gov’t regulation and market-based competition
Some regulatory cost control: not comprehensive
Bottom-up cost control
-Providers and MCOs determine own fees and premiums
Total expenditure determined by competition created by employers and MCOs
What are the regulatory approaches of cost containment?
Supply-side controls (health planning)
Price controls
Peer review (for utilization control)
Where does restriction occur in supply-side controls?
Restriction on capital expenditures
-Certificate of need (CON) statutes by state legislation
Restriction on supply of physicians
-Entry barriers for foreign medical graduates
Types of price controls
DRG-based PPs: shift of costs from inpt to outpt sector
Medicare’s use of various reimbursement methods
Pay for performance payments
Definition of peer review
The general process of medical review of utilization and quality by or under the supervision of physicians
Aspects of quality improvement organizations
Evolved from peer review organizations (PROs) from 1984
Statewide private organizations
Review by physicians and other health professionals who are paid by federal gov’t
To review care provided to Medicare pts
Is care reasonable? Necessary? Provided to the most appropriate setting?
Can deny payment if care not necessary or appropriate
What are competitive approaches to cost containment?
Demand-side incentives
Supply-side regulation
Payer-driven price competition
Utilization controls
Aspects of demand-side incentives
Cost-sharing by consumers leads to a self-rationing mechanism
RAND experiment: cost sharing leads to low utilization, no effect on health
Aspects of supply-side regulation
Antitrust laws: anticompetitive practices can be illegal
MCOs and HC orgs should be cost efficient to survive
What are the two levels of payer-driven price competition?
Employers shop for value in health insurance plans
Managed care shops for best value from providers
