Morbdiity Risk Flashcards
(14 cards)
Moratium underwriting
Insurer excludes certain pre-existing conditions of the covered party for a specified period of time and the underwriting is carried out at claims stage if needed
- ensuring that all PECs are identified and declared at policy nception so as to protect he existing risk pool
- common features
- clearly explained sales literature
- effective sales intermediary process
- clearly worded proposal forms
- more frequent use of doctor’s report at new business stage
- thorough audits on sample cases
- closer dialogue between underwriting, sales, and claims management
Class selection
Refers to the fact that people can be usefully classified by certain attributes that affect their mortality or morbidity - eg- non-smokers or smokers
Managing claim costs ( benefit design)
- Limitations and exclusions ( where the likelihood of moral hazard is high )
- Co-payments and levies ( require policyholders to pay a fixed amount or proportion o the cost of healthcare services used )
- MSA ( self-fund day to day medical expenses )
- Approved provider networks ( negating fees and service standards , treatment protocols , pre-authorisation , employing their own health professional , regularly reviewing utilisation to identify moral hazard and reduce occurrence )
- Medicine formularies
- Tariff negotiations ( tariff rate is set by an insurer in terms of what is required and what a reasonable cost world be )
- Disease management programme ( ensure chronic conditions are managed in a cost-effective manner)
Managed healthcare
Manage claim costs while maintains or ven improving access to quality healthcare services
- delivery andf financing of healthcare by providing insurers some control over the healthcare service providers through provider network
- can be introduced by the insurer or HMOs
Management care objectives
- Reduce cost of medical events
- Improving quality of care
- Ensuring that medical services are provided at an appropriate setting
- Ensuring that high-risk members are managed and receive appropriate care
- Reducing the number of uncessary medical services
Measure quality under alternative reimbursement
- Mortality rate
- Pecialist referral rate
- Hospital admission rate
- Procedure complication rate
- Chronic medication adherenace
- Patient questionnaires
The risks of managed care ( that can be transferred to MCO)
- Price risk
- Intensity risk
- Severity risk
- Frequency risk
- Actuarial and marketing risk
Provider withhold
Negative incentive
- fee schedule or other payments rate is negotiated between founders and providers
- the initial provider payment is then set at a lesser amount
Some or all of the withheld amounts will be paid if adequate funds ist at the end of an accounting period, with acceptance levels fo utilisation
- can be used in capitated arrangements
- withholds transfer financial risk from the plan to the provider
As the withhold amount is increased, additional risk is transferred to the provider
The risk assumed by the providers at various worthhold levels can be quantified using actuarial tools - aggregate claims probability distribution
Positive incentives
Business or surplus sharing is a positioned incentive approach
Where surplus generated as a result of costs being reduced below a target level is shared on a frormula basis between the founders and providers
The target is set based on prior plane experience , regional norms and or % above optimal levels
Risk adjustment
Adjusting for underlying factors , which are drivers of utilisation or which impact the underlying morbidity when evaluating utilisation levels and costs
Risk factors used in risk adjustment
- age
- sex
- socio-economic status
- race or ethnicity
- comorbdities
- diagnosis related group
-Functional status - active clinical stability
- lifestyle factors
- access to benefits
Application of risk adjustment
- Budgeting
- Measuring efficiency
- Risk management
- Measuring health outcomes
- Provider profiling
Concerns with managed care
- provider networks may restrict access to required care
- providers may resent external parties imposing clinical protocols on them and influencing the way in which they practice medicine
- management care may compromise the quality of care provided to patients by encouraging under-serving of patients by providers
- the use of formularies and other financial-based managed care initiative may result in additional cost being transferred from the medical scheme or health insurer to the policyholder , with no overal cost reduction
