Lec 11: Health Care Costs And Cost Control Flashcards by Jessica Deak

What are some reason why health care cost is important?

Affects demand
Affects how we get paid
Biggest problem = COST

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What are the three parts of kissick’s iron triangle?

Cost at top, quality at left, access at right

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Key facts about cost: How much is spent on healthcare per person?

$9,990

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Key facts about cost: What is the share of economic activity (GDP) devoted to health care?

17.8%

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Key facts about cost: If growth rate is going up, then…

Something is driving this change

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Key facts about cost: Where is spending the greatest?

In 2013… 10x more than it was in 1980

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US per capita health care expenditures: Growth ______, remains in step with ___________

SLOWS

Overall economy

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US health care expenditures as a % of the GDP: Growth trend line is going ____

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Distribution of national health expenditures, by type of service: _______ is the biggest piece of the pie in terms of where money is spent

HOSPITAL CARE (know this)

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The US spends a lot more compared to other countries, T/F?

True

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Explain the US health expenditure vs. life expectancy

We are spending way more than everyone else, but life expectancy is not that great

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Impact of increasing health care costs (5)

Affordability of CARE
Affordability of INSURANCE
Burden on businesses
Individuals not getting needed care
Increased use of government programs

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There is a burden on businesses (employee sponsored healthcare), because the cost of providing health insurance to their employees continues to go ___

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Why are health care costs so high?
There is a disagreement on drivers of rising health care costs
(What are the 4 reasons?)

Moral hazard
Demographic shift
Reduced consumer ownership
Unnecessary spending

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What is moral hazard?

Once someone has insurance coverage that someone else is paying for, they will use more of it

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What is a demographic shift?

People get older, they use more care.

More old people = it will cost more

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What are some examples of unnecessary spending?

Fraud and abuse

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What is the cost equation?

C= P x Q
Cost = Price x Quantity

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What are the two factors driving increased cost?

Prices

Volume & Intensity

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Factors Driving Increased Cost: Prices:
Concentration of _______ ______
______ and _______
If you are living in the city where you only have a few hospitals, prices will go ___

Market power
Supply and demand
UP

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Factors Driving Increased Cost: Prices:
__________ ____: working in practice and all these rules you need to follow, you need to hire someone to do this for you.

Administrative costs

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Factors Driving Increased Cost: Volume&Intensity:

Fee for ______

Service

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Factors Driving Increased Cost: Volume&Intensity:
_________ care and care systems - we do not have a coordinated system where the work has already been done follows us around; different specialists do their own test

FRAGMENTED

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Factors Driving Increased Cost: Volume&Intensity:

Medical ______

Technology

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Factors Driving Increased Cost: Volume&Intensity: | _________ liability

Malpractice

Factors Driving Increased Cost: Volume&Intensity: | Increased prevalence of _______ conditions

Chronic

Factors Driving Increased Cost: Volume&Intensity: | Changing ________

Demographics

Two types of “Painful” cost control: Reimbursement

- Price controls | - Utilization controls

Price controls: (2)

1. Mandated uniform fee schedule | 2. May result in cost shifting to other payers, increased utilization; reduced quality of care/patient satisfaction

Utilization controls (3)

1. Changing unit/methodology of payment 2. Patient cost-sharing (deductibles, co-pays) 3. Utilization management (controlling the volume of services provided)

Utilization is about ______. Movement from ________ to more _______ services

VOLUME Fee for service Bundled

CMS interprets the ______ | Who decides what is appropriate under Medicare?

LAW | CONGRESS

Insurance companies have a certain ______ for making decisions

Algorithm | And they do not have to tell you what it is

If you spend more money, your outcomes will get _______, to a point, and then they will ______

Better | Level off

What does it mean by shifting the cost curve?

Health of population improves | We cannot keep throwing money at healthcare outcomes because it will level off at a certain level

Where are the efficiencies for the “curve C” of health care cost/outcome curve?

It is still the same curve, and it will still level off | But spending less to get better outcomes for the patient

(6) Painless cost control strategies

1. Controlling FEES and provider INCOMES 2. Cutting the PRICE of pharmaceuticals and other supplies 3. Reducing admin WASTE 4. Eliminating medical interventions of NO BENEFIT 5. Substituting LESS costly technologies that are equally effective 6. Increasing the provision of those preventive services that cost less than the illness they prevent

Managed care includes (2): 1) _______ _______ created, in part, to manage cost 2) Original intents also included improving ______ and ______

Insurance model | Quality and access

What is a managed health care plan?

An arrangement that integrates financing and management with the delivery of health care services to an enrolled population

A managed health care plan employs or contracts with what?

With an organized system of providers, which delivers services and frequently shares financial risk

The 3 basics of managed care include: 1. _______ make up the plan’s network 2. How much the plan pays depends on the ___________ 3. _______ plans generally cost less; more ______ plans cost more

1. Providers 2. Network’s rules 3. Restrictive, flexible

What are the three TYPES of managed care plans?

HMO (Health Maintenance Org) PPO (Preferred Provider Org) POS (Point of Service)

HMO: usually only pay for care __________

Within the network

HMO: Who coordinates most of the care?

PCP

HMO: _______ requirement for referrals Only they decide when you can see someone _______ of that network, unless it is an emergency _________ will not be covered under any circumstances _____ cost

Strict Outside Out of network Low

PPO: usually pay _____ if care occurs within the network, but they still pay a _______ for outside network care

More | Portion

PPO: Usually have a ____ if he/she refers you, then the plan will pay _____

PCP | More

PPO: if out of network, you will have to may ______ of the cost

POS: plans permit choice btw ___ and ____ each time care is needed

HMO and PPO

POS is a ______

Hybrid

POS: you have a _______ provider network and encourage you to have a _______, but do not require it

Contracted | Gatekeeper

POS: _____ co-pays and patient responsibility if you go ______ of network

Higher | Outside

POS: More _______

Flexible

Evolution of managed care cost control strategies: EARLY strategies include: (4)

1. Selective provider networks 2. Provider risk contracting 3. Primary care gatekeeping 4. Utilization review

In provider risk contracting, the ____ you spend on managing your patients, it is in your best financial interest

LESS

In provider risk contracting, you are rewarded as a provider for keeping ________ down

Utilization

In utilization review, someone within the HMO is.....

Looking at what was done

Evolution of Managed Care Cost Strategies: Increased investment in ______ and ______ management

Disease and case

Managed care concerns: Advantages of managed care perceived to employer, not consumer (________ cost)

Decreased

Managed care concerns: Issues of provider _______, ability to access provider panels

Autonomy

Managed care concerns: ____ relaxation of restrictions, _____ hospital market power due to consolidation

HMO | Increased

HMO peak enrollment in _____; began to _____

1999 | Decline

Managed care backlash/resurgence: Continued cost ________ - renewed _________

Increases | Interest

Managed care backlash/resurgence: Reintroduction of prior _______ requirements

Authorization

Managed care backlash/resurgence: Increased concurrent ________ of care

REVIEW

Managed care backlash/resurgence: Disease management, targeting ______ risk patients

HIGH

Managed care backlash/resurgence: Tiered provider networks based on measures of _____ of care provided - track data based on what you bill, and they know who are the low and high utilizers

Cost

Managed care backlash/resurgence: ________ ______ incentives

Quality care

Managed care backlash/resurgence: Benefit design, cost ______

Sharing

Managed care backlash/resurgence: ______ directed plans

Consumer

General proposals to contain cost: (7) things

1. Government regulation 2. Adjusting provider compensation 3. Investment in IT 4. Improved quality and efficiency 5. Prevention 6. Increased consumer involvement in purchasing 7. Altering tax preference for employer sponsored insurance

Estimated sources of excess cost in healthcare: Unnecessary services — overuse, beyond _______ levels, unnecessary use of ______ cost services

Evidence based | High

Estimated sources of excess cost in healthcare: Inefficiently delivered: Care fragmentation, unnecessary use of _____ cost providers, _______ inefficiencies at sites

HIGHER | Operational

Estimated sources of excess cost in healthcare: Excess administrative costs: Insurance paperwork beyond benchmarks, administrative inefficiencies, ___________ requirements

Documentation

Estimated sources of excess cost in healthcare: Prices that are too high: Service and product prices _______ benchmarks

BEYOND

Estimated sources of excess cost in healthcare: Missed prevention opportunities: ______, ______, and _______ prevention

Primary Secondary Tertiary

Estimated sources of excess cost in healthcare: FRAUD: All sources including: _______, _____, _____

Payers, clinicians, patients

There is the most excess cost in: _________ _______

Unnecessary services

8 ways that we can improve efficiency to reduce cost? 1. EMR/Health IT 2. EBP 3. ______ based payments 4. ________ directed health care 5. Prevention, ________ disease management 6. Eliminating ______ and _______ 7. Management development and diffusion of new _______ 8. Comparative effectiveness

3. Quality 4. Consumer 5. chronic 6. fraud and abuse 7. technologies

Choosing wisely aims to promote conversations between ______ and _______ by helping patients choose care that is: 1. Supported by _______ 2. Not _______ of other tests or procedures already received 3. Free from ______ 4. Truly _______

Physicians and patients Evidence Duplicative Harm Necessary

What does policy data say about PT?

``` Payer tracking MedPAC Government accounting office (GAO) Office of Inspector General (OIG) Part B National Summary Data File ```

What happened in the OIG August 2014 Report?

Review of Illinois’s PT Medicare Claims for Therapy Services Provided Out of 100 claims that were reviewed, 99 of them contained more than one deficiency. The therapist improperly received ALOT of money that did not comply with the Medicare requirements. So he had to refund that money back to the government

Spending ________ 2000-2004

DOUBLED

More beneficiaries used ______

Services

There is considerable _______ in spending per beneficiary

Variability

What are 3 limitations in claims data?

No outcomes data Limited diagnosis data Provider identifiers

Lec 11: Health Care Costs And Cost Control Flashcards

(86 cards)