Until 10/11 Flashcards
(97 cards)
1
Q
Why is health insurance important?
A
- Protects against financial losses
- Reduces access barriers so people less likely to forego care (preventative and chronic)
- Increases cost and utilization predictability (insurance companies can make more accurate predictions)
2
Q
What were the Blue Cross health plans?
A
Hospital-based pre-payment insurance plans
3
Q
What were the Blue Shield health plans?
A
Physician-based pre-payment insurance plans - doctor controlled (home visits, office visits, physician-hospital care)!
4
Q
Why was employer health insurance created?
A
Labor shortage during WW2 so employers competed for workers by raising wages - US gov’t was worried about this with inflation so banned it. Employers began competing using fringe benefits, like health insurance.
5
Q
What is the McCarran-Ferguson Act?
A
Deemed private insurance exempt from federal regulation.
US is capitalist so allows employers to control health insurance.
6
Q
How did the IRS make health insurance cheaper for employers in 1954?
A
Made employer contributions for health insurance excluded from taxable income, so can increase health insurance contributions which then decreases cash wages.
7
Q
Why is employer-sponsored insurance regressive?
A
- Not linked to salary, same premium - lower income pays higher share of wages in premiums.
- Excluded from payroll/income tax, so bigger tax break for the rich.
- Lower income earners are less likely to have employment that offers health coverage.
8
Q
What advantages does for-profit, commercial health insurance have over Blue Cross/Shield (non-profit)?
A
- Can offer multiple forms of insurance, not just health.
- Can offer national coverage for large businesses.
- Offers indemnity plans which allow employer to play a direct role in benefit distribution.
- Offers lower prices on plans for healthy, low-risk workers.
9
Q
What is experience rating?
A
Setting premiums according to individual risk = low-risk individuals cost less, high-risk individuals cost more
10
Q
What is community rating?
A
Insurer sets rates based on pool/market risk factors, everyone pays same premium.
11
Q
What is ERISA (1974)?
A
ERISA is the employee retirement security act passed by Gerald Ford.
Exempts self-insured employee health coverage from state regulation.
12
Q
What are the harms of ERISA?
A
No uniform state/national oversight of key insurance elements.
Large plan inconsistencies.
13
Q
What is an indemnity plan?
A
With an indemnity plan (sometimes called fee-for-service), you can use any medical provider (such as a doctor and hospital). You or the provider sends the bill to the insurance company, which pays part of it. Usually, you have a deductible—such as $200—to pay each year before the insurer starts paying.
14
Q
What is an HMO?
A
HMO is a health maintenance organization that has a tightly managed network of providers with a primary care gatekeeper.
15
Q
What is a PPO?
A
A preferred provider network where insurers create special “networks” of hospitals and physicians.
With a PPO plan, you can visit any doctor or hospital in or out of the network without a referral. You’ll pay less when you use in-network doctors and hospitals and pay more when you use out-of-network ones.
16
Q
What is a high-deductible health plan?
A
Requires patients to pay the first several thousand dollars of medical bills, normally young people would choose this.
17
Q
What are the types of private insurance policies today?
A
- Indemnity/conventional
- HMOs
- Preferred provider networks (PPOs)
- High-deductible health plans (HDHPs)
18
Q
What is the most common health insurance status in the US?
A
Employer based insurance with 50%. Then it’s Medicaid (18%), Medicare (15%), non-group (6%), etc.
19
Q
What is skin in the game?
A
Skin in the game is having a personal investment in something, so a vested interest in its success.
20
Q
Do Americans have skin in the game?
A
Yes, because they have a growing share in out of pocket (OOP) spending even if they have employer coverage.
21
Q
Do physicians have skin in the game?
A
Physicians historically had less skin in the game because they didn’t share in the financial risks, now they are beginning to have a larger share when we consider APMs… savings-sharings payment plans.
22
Q
Why do employers offer health insurance?
A
- It attracts new employees and keeps them retained (job-lock).
- Many people believe the employer offering health insurance is a benefit, but really workers pay by taking lower wages.
- Employers get a tax exclusion (biggest tax break in US tax code)
23
Q
What is the risk for employer-based insurance for a large employer? For a small employer?
A
Large risk pool because of a large # of people for large employer. For small employer there’s a narrow risk pool b/c of small # of people.
24
Q
What are stop loss plans?
A
Insurance for providing insurance - the stop-loss insurer is liable for losses that go over set employee deductible limit.
25
Why are stop-loss plans beneficial?
Protect smaller employers from potentially bankrupting insurance risk - if small # of employees and one has severe health episodes, the cost could be catastrophic for employer.
26
Who purchases stop loss plans?
It is purchased by employers who have decided to self-fund their employee benefit plans, but do not want to assume 100% of the liability for losses arising from the plans.
27
What are the advantages of stop loss plans?
1. Helps small employers mitigate the risk of one catastrophic risk bankrupting them.
2. Helps when hospitals are experimenting to be more efficient, gives downside protection in case it fails and you lose money.
= provides protection to experiment and take risks
28
What is Medicare?
Public health insurance if you're over 65 and have select disabilities/conditions. Divided into 4 sections.
29
What is Medicaid?
Eligibility defined by income.
Originally was just for the "deserving poor", jointly funded by states/feds and covered elderly, disabled, pregnant, etc.
Now for all poor under the Medicare Expansion of the ACA, mostly funded by the feds.
30
What is Medicare Part A? What is it funded by?
Covers hospital care.
Funded by payroll tax.
31
What is Medicare Part B? What is it funded by?
Covers physician services (ex. x-rays, labs, non-hospital services, physical therapy, etc).
Funded by premiums from enrollees and federal revenue. Premiums subsidized and cover 25% of costs.
32
What is Medicare Part C? What is it funded by?
Medicare Advantage - managed private care plans that cover services in A and B.
Not separately financed, capitated payments from A, B, D funds.
33
What is Medicare part D? What is it funded by?
Pays for prescription drugs.
Funded by premiums from enrollees and general federal revenue.
Premiums are subsidized and cover only 25% of costs.
34
What is Medigap?
Medicare has substantial OOP (ex. 10% coinsurance), so Medigap is a private insurance that covers costs the feds don't (ex. vision costs).
Covers costs enrollees would have to cover like deductibles, co-pays.
Funded by enrollee premiums.
35
What are Medicaid waivers?
Allow states to test new Medicaid approaches related to state-presidential priorities (ex. work requirements)
36
Can there be universal coverage in the US?
Actually there should be, because Medicare for all would shift the money from private health insurance spending to federal health spending - there would not be increased total costs.
Already paying for universal coverage .
37
What was sick care like in the 19th century?
Mostly women providing care in the home. Professional physicians weren't well-respected and often had other jobs.
Hospitals mainly for people who were too poor or didn't have family.
38
What transformed hospitals/medical care in terms of efficacy and safety?
Ether and Chloroform Anesthesia, Antiseptic technique, aseptic technique, gram stain diagnosits, x-rays.
39
What was medical education like pre-20th century?
Run by practicing physicians in large rooms, dependent on fees.
No library, laboratories, clinical rotations.
Students never failed.
40
Who was Abraham Flexner?
He criticized American higher education in 1908, published the Flexner Report which led to improvements in medical education:
- 2 pre-clinical years
- 2 clinical years
41
What was the consequence of longer medical training?
From 1910-1940:
Better hospitals, fewer med schools.
Doctors began to come from wealthier and more urban backgrounds - they could afford to take the time off for education.
42
Did the AMA like Flexner?
AMA created in the 19th century, wanted reform to increase legitimacy of the field so encouraged Flexner's reform!
43
What was the Hill-Burton Act?
Passed in 1946 with the main goal of getting new hospitals nationwide.
Increased funds for private community hospitals.
No discrimination based on race, religion, nationality.
Minimum requirement of uncompensated care.
Emergency care to all.
Incentivizes Drs to do more b/c get more funding!
44
Why are half of all hospitals nonprofit and defined as "charitable" with a tax exemption? What's the problem with this tax exemption?
Most hospitals nonprofit subsidized through state/fed income tax exemptions, sales tax exemptions, property tax exemptions.
Required to provide charity care b/c of these exemptions, but in reality for-profit provide MORE.
Tax exemption doesn't guarantee charitable goals and is worth more to hospitals in wealthy areas.
45
Are hospitals increasing?
No, there are around 5000 community hospitals and the number is decreasing, more close than open.
46
What are Diagnosis Related Groups (DRGs)?
It's a system to classify hospital cases as products.
Determines how Medicare pays the hospital for each product - CMS doesn't want to pay for each individual activity but for all the care surrounding one diagnosis (ex. all heart attack care - bed, procedure, tests, care, etc)
Replaces "cost based" reimbursement.
47
What is the problem with "Cost based" reimbursement?
If Dr gets paid to do things and gets profit on every task, they'll just do more!
48
What are the 6 Payment Rates for Hospitals?
1. Chargemaster/Retail Rate
2. Usual, Customary, Reasonable (UCR)
3. Commercial Insurer/Blues Rate
4. Medicare
5. Medicaid
6. Actual Cost
49
What is the Usual, Customary, Reasonable (UCR) Rate?
The un-negotiated hospital rate. More than the rate negotiated by commercial insurer.
50
Who is the Medicare Rate and the Medicaid Rate for hospitals set by?
Set by the government. Medicare rate is higher than Medicaid.
51
What were worries about the DRGs?
People were worried would incentivize lower quality, but really it has just reduced length of stay.
There's a big incentive to get healthier people in the DRG so if they get discharged earlier they hospital saves the portion of that bundle in their pocket.
52
Why are more physicians specialists?
In WW2 military promoted specialists in rank and paid them more - this persists.
53
How do physician earnings' vary?
If state has less doctors (supply and demand).
If employed by a health system (reduces administrative responsibilities).
54
What are the outcomes of having large medical systems/mergers/monopolies? Can they be blocked?
They decrease patient choice, increase price, decrease quality, and impede innovation.
Increases sway with legislators which increases negotiating power and thus price.
Procedure for blocking mergers is lengthy and is hard to regulate.
55
How does doctor billing for FFS work?
FFS = payment for each service good.
1. Medical coding by Current Procedural Technology (CPT) codes.
2. CPT codes converted to a bill.
3. Relative value unit (RVU) determines what will be paid for via reimbursement formula.
56
What drives hospital/healthcare mergers?
1. Emergence of technology (filing quality reports, investing in IT). Part of this is the introduction of managed care in the '90s which needed negotiation from Drs.
2. Compensation mechanisms, if you're employed by health system = they can charge more and you can be paid more w/o administrative responsibility.
57
What is Fee for Service?
Payment for each test, good, medication.
Incentivizes more care which = more money.
58
Why are nurses leaving the profession?
It is the fastest growing profession, but experiences very high burnout and high levels of profession disrespect.
More nurses leave (to be travel nurse or change professions) = increases overwork for remaining nurses = increases burnout = more leave.
As more become travel nurses the hospital needs to pay more for nurses = less pay negotiation for existing staffed nurses.
59
What are scope of practice laws for nurses?
They determine what services they can provide in what setting, under what supervision.
Some states who have physician shortage should increase powers of nurses so that they can do most of what the doctor could do.
60
What are federally qualified health clinics?
FQHCs provide comprehensive care+preventative services usually directed in underserved urban and rural communities.
Safety net (democrats like this), but not as good as universal coverage (republicans like them b/c they're not universal coverage).
61
What are LBJ's legislative principles?
Speed, Keeping economists quiet, mastering congressional process, giving congress credit, go public + momentum, passion
62
Why did the ACA go through?
1. Death of Ted Kennedy
2. Tea Party pressure - acknowledged wouldn't apply to undocumented
3. You Lie! Joe Wilson to Obama
4. Wellpoint raising insurance rates 39%
63
Why are doctors resistant to change?
1. no motivation to change
2. no specific changes to implement
64
What is adverse selection?
when one party in a transaction knows more than the other before the transaction occurs
= higher health-risk populations more likely to buy health insurance
65
How are segmented risk pools created?
price, advertising, languages, benefits, networks, locations
66
How can adverse selection be reduced?
1. reduce information asymmetry by expanding information production about risk estimates/predictions
2. reduce the incentive to exploit information advantage - standardize benefits
3. recruit healthier beneficiaries - advertising
4. mandates - keeps broader risk-sharing which keeps costs lower
5. community rating (only really works w/ coercion)
67
what drives health care costs?
technology, aging population, sicker population, covering more people, higher prices
68
what drives the growth of health care costs?
supply-induced demand
insurance-induced demand
69
What is moral hazard?
if someone has insurance, more likely to use it and use more expensive care
- if have already hit the OOP limit for health insurance, may add a colonoscopy b/c they're not paying for it
70
What is unnecessary care?
something that isn’t recommended but is still ordered by physicians
Ex. PET/CT scans during diagnosis/staging for local breast cancer
71
What is inefficient care?
something that can be done cheaper or in less time to get the same clinical outcomes
Ex. doing 3 weeks of breast irradiation instead of 7 when the survival rates are the same
72
What is Clinical Waste in US health spending?
~5-16% of all health spending = clinical waste (failures of care delivery, failures of care coordination, overtreatment)
Prices are higher in self-insured plans (big institutions take the financial risks, pay out of current revenue with the plan through an insurer) than fully-insured (insurance company takes the financial risk, pay fixed premiums).
When insurance companies negotiate the rates if they are bearing the financial risk they negotiate lower rates
73
What do rising health costs jeopardize/why is it relevant?
1. Coverage and access - coverage can’t be separated from cost.
2. Cuts in state education programs - have to reduce spending, can’t raise taxes or restrict Medicaid further = cuts to education.
3. Middle class wages - further cuts to cash wages.
4. Long-Term Fiscal Stability - more and more of the budget associated with healthcare costs.
74
How has the ACA expanded access?
Three methods:
1. Created state exchanges w/ subsidies for 100-400% of FPL
2. Expanded Medicaid for ALL AMERICANS under 138% FPL. No longer just deserving poor. Wasn’t just for specific eligibility, became universal based on income
3. Large employer and individual mandates
75
Describe the ACA exchanges. Who are they aimed towards?
Goal: Create a market where individuals who can’t access affordable insurance (no employer insurance) can purchase lower cost plans - pools individuals’ risk.
Subsidies based on income (sliding scale) were introduced 100-400% of FPL
76
What happened in the 2010s-2020s that impacted the ACA?
1. Congress said no more individual mandate penalties
2. Trump said i’m going to repeal and replace - gutted all the outreach/advertising and reduced annual enrollment period
3. American rescue plan (ARP) under Biden
Increased people eligible for subsidies w/ $0 premiums for low income people. $100 million for navigators to encourage health coverage enrollment
77
How do the ACA subsidies work?
The ACA subsidies are premium assistance for middle income enrollees which were extended until 2025 in order to reduce premium cost.
78
How did the ACA increase access?
1. Children allowed to stay on parents’ plans until 26
2. Guaranteed standard benefits (have to be insured but by plans w/ certain things - maternity care, emergency care, preventative, etc)
3. Community rating to limit variation (geography, age, family, tobacco)
4. No pre-existing condition exclusion
79
What are the 6 dimensions of quality?
1. Safety
2. Efficacy
3. Timeliness
4. Patient-Centered
5. Equitable
6. Efficiency
80
What are the 3 measures of quality? Give an example of each.
1. Structural- Health care capacity, systems, processes.
Ex. Number of physicians or nurses per hospital bed
3. Process - what a provider does to improve or maintain health, usually accepted recommendations which are linked to outcomes
Ex. % of people receiving preventative services
3. Outcome - impact of healthcare service or intervention on mortality/health
Ex. Rate of surgical site infections, % of patients who died by an operation
81
What are the impacts of/problems with the aging population in the current system?
Lack of geriatricians (b/c most elderly on Medicare/Medicaid so less profit under FFS) and high turnover rates for direct care workers - could be incentivized by covering residency, providing living wage for direct care workers, loan forgiveness, etc.
Baby boomers have increased obesity rates which means increased disability and decrease in independent function, more chronic conditions - need more specialists, quality care.
82
How can we improve health outcomes - quality?
1. Expand insurance coverage
2. Strengthen primary care
3. Reduce admin burdens for patients and doctors
4. Reduce income-related barriers, invest in social services
83
How can we strengthen primary care?
- Decrease administrative barrier
- Increase eligibility
- Promote equitable treatment through data collection
- Make telemedicine more prominent
- Make it easier for healthcare professionals to work across state lines
- Train community health workers to support their own communities
84
What are ways quality can be tracked/improved?
- Quality reporting coupled with payment rewards by federal mandate
- Digitizing quality measurements
- Person-centered outcome measurement: measuring what individuals say matters most to them and setting goals they can attain scaled to this! Very personalized!
- Equity focused accountability and measurement: staging health equity accreditation based on health practices and outcomes.
Basically, need fine, individual, clinical data to measure quality.
85
Describe salary payment.
In salary payment doctors are paid for time, seeing more patients doesn’t indicate a change in monetary compensation. So the incentive is to do as little as possible for as few people as possible.
86
Describe Capitation.
Capitation is a lump sum payment on a per patient basis (so to manage a patient you get a fixed payment) which incentivizes to do as little as possible for as many people as possible.
A worry of capitation is that the Drs might not do high quality care benchmarks (ex. Vaccines, cancer screening) b/c they are compensated by a fixed sum per patient.
87
Describe pay-for-performance.
Track what services people are doing, and give them incentives if they do good things (ex. High quality care which can be indicated by vaccines, cancer screening, etc). In pay for performance the outcome of procedures is prioritized, so doctors receive bonuses if they’re imparting quality care. The incentive is to do as many compensated tasks (ex. Vaccines, cancer screening) as possible.
88
What are alternative payment models?
They are additions to FFS to hopefully limit the volume/intensity of care. Essentially creating a payment structure on top of FFS to address the incentive problem.
89
What are ACOs?
Not itself a payment model, but instead ACOs are a concept of an organization similar to HMOs. They can include physician groups, hospitals, and medicare beneficiaries - all of these parties would be involved in care coordination across different providers.
ACOs are an organization that is accountable for Medicare spending and bears the risk of their patients in order to control spending.
They are conditional on meeting minimum quality targets and receive “shared savings” payments (this is the payment model!) if costs are below the benchmark.
They’re still transacting via FFS but at the end of the year we go back and see if physicians met the budget, if they spend more they share in the loss (and vice versa).
90
Are there any barriers to adopting ACOs?
Yes, there are many. Creating an ACO takes financial and capital and technical know-how which are both barriers to starting them.
As well, some parties are worried about the shared losses and the lack of opportunity for savings - there’s a complexity in that to save money someone has to lose and if you’re a hospital-led ACO it’s often going to be the hospital feeling this.
91
What is the ACO Investment Model (AIM)?
AIM was created to address the problem that only affluent areas were getting the ACOs, Medicare provided upfront to areas caring for more socially-disadvantaged populations. Idea was to stimulate more participation from these areas. They did that + saved money w/ no change in quality.
Provides up-front, recurring payments to providers w/o financing, payments recouped through shared-savings over time.
92
What are Bundled Payments?
FFS is piecemeal payments, the bundled payments encapsulate all of the pieces of one care episode in one price (ex. Knee replacement is one price for the anesthesia, surgery, hospital stay, recovery care, etc).
93
Are there any concerns with Bundled Payments?
The biggest concerns with bundled payments is that the fixed payment would reduce the quality and it would increase the unnecessary volume. For example, instead of paying the surgeon $3,000 for the surgery, you give the physician group $30,000 in the bundled payment which would incentivize them to do more and more. This didn’t happen.
94
Are Bundled Payments working?
In general for surgeries there’s around 4% savings (this is a good amount). For medical conditions (ex. Pneumonia, strokes, etc) there’s a saving of around 1% likely b/c these conditions are more complex. Yes, bundled payments = savings.
No effect on mortality or patient satisfaction/quality.
95
Why have Bundled Payments savings come from post-acute care?
Program design - the hospital gets a fixed amount for surgery so really the area for savings has to be in post-acute care.
96
What are failures of care delivery?
Poor execution which leads to poorer clinical outcomes/patient harm
97
What are failures of care coordination?
Low communication among physicians and the presence of incomplete EHRs
