MHA 710 Exam 1
accountable care organization - ANSnetwork of providers that have financial incentives to reduce
spending and improve outcomes
adverse selection - ANSaffects risk pool. a situation that occurs when buyers have better information than
sellers.
-high risk consumers are willing to pay more for insurance than low-risk consumers are
adverse selection - ANSwhen buyers have better information than sellers.
ex: high-risk consumers are willing to pay more for insurance than low-risk consumers are.
because resources are scarce, what are the 3 important questions to ask - ANS1- WHAT shall we
produce (or not)
2- HOW shall we produce it
3- WHO gets what produced
bundled payment - ANSpayment of a fixed amount for an episode of care. the payment might cover just
hospital care or might include the physician, hospital, and rehab
capitation - ANSpayment per person (payment does not depend on the amount or type of services
provided)
case-based payment - ANSsingle payment for an episode of care, regardless of the number of services
coinsurance - ANSa form of cost sharing in which a patient pays a share of the bill, not a set fee
community health workers - ANSLocal, nonclinical workers who help patients live healthier lives and help
providers understand patients' needs.
copayment - ANSa fee the patient must pay in addition to the amount paid by insurance
cost - ANSthe value of a resource in its next best use
cost sharing - ANSdirect payments to providers by insurance beneficiaries.
decision tree - ANSa chart that depicts the values and probabilties of the outcome of a choice
deductible - ANSthe amount a consumer must pay before insurance covers any healthcare costs
diagnosis-related group - ANSthe basis of Medicare's case-based payment system for hospitals
expected value - ANSsum of each values of each possible outcome weighted by probability
expected value formula - ANSE(x)=(p1*X1)+(p2*X2)...
multiply the outcome by the probability and add all resulting products. ex:
(0.6X$120,000)+(0.4X$20,000)+....
fee-for-service (FFS) - ANSinsurance plan that pays providers on the basis of their charges for service.
($100 bill, $20 copy and $80 is paid by insurance)
global, risk-adjusted budget - ANSPayment of a fixed amount per person to the organization responsible
for providing care to a population. Risk adjustment means that the amount per person is higher for people
with higher risk of expensive illnesses
group model HMO - ANSA plan that contracts with a physician group to provide services.
, MHA 710 Exam 1
health savings account - ANSemployee's contributions and payments are not taxable
high-deductible (HD) plan - ANSPlan that has a deductible of at least $1,000 and may be combined with a
health savings account
HMO (Health Maintenance Organization) - ANSplan that provides comprehensive benefits to enrollees in
exchange for a premium
independent practice association (IPA) HMO - ANSA plan that contracts with independent practice
associations, which in turn contract with physician groups.
information asymmetry - ANSwhen one party in a transaction has less information than the other party
input - ANSa good or service used in production
life year - ANSone additional year of life
managed care - ANSloosely defined term that includes all plans except open-ended fee-for-service. it is
sometimes used to describe the techniques insurance companies use
marginal analysis - ANSanalysis of the effects of small changes in a decision variable (price or volume of
output) on outcomes (costs, profits, or probability of recovery)
marginal or incremental cost - ANSthe cost of producing an additional unit of output
medicare part A - ANScoverage for inpatient hospital, skilled nursing, hospice and home health services.
medicare part B - ANScoverage for outpatient services and medical equipment
moral hazard - ANSthe incentive to use additional care that having insurance creates
narrow network - ANSA limited group of providers who contracted with an insurance company
normative economics - ANSusing values to identify the best options. subjective statements of what
SHOULD be
objective probaility - ANSestimate based on frequencies
opportunity cost - ANSvalue of what one cannot do as a result of making a choice
out-of-pocket payment - ANSmoney a consumer directly pays for a good or service
output - ANSa good or service produced by an organization
per-service payment - ANSpayment for each billable service. providing an additional service increases
the bill
Point-of-service (POS) plan - ANSPlan that allows members to see any physician but increases cost
sharing for physicians outside the plan's network. (This arrangement has become so common that POS
plans may not be labeled as such.)
positive economics - ANSusing objective analysis and evidence to answer questions about individuals,
organizations, and societies (factual statements)
accountable care organization - ANSnetwork of providers that have financial incentives to reduce
spending and improve outcomes
adverse selection - ANSaffects risk pool. a situation that occurs when buyers have better information than
sellers.
-high risk consumers are willing to pay more for insurance than low-risk consumers are
adverse selection - ANSwhen buyers have better information than sellers.
ex: high-risk consumers are willing to pay more for insurance than low-risk consumers are.
because resources are scarce, what are the 3 important questions to ask - ANS1- WHAT shall we
produce (or not)
2- HOW shall we produce it
3- WHO gets what produced
bundled payment - ANSpayment of a fixed amount for an episode of care. the payment might cover just
hospital care or might include the physician, hospital, and rehab
capitation - ANSpayment per person (payment does not depend on the amount or type of services
provided)
case-based payment - ANSsingle payment for an episode of care, regardless of the number of services
coinsurance - ANSa form of cost sharing in which a patient pays a share of the bill, not a set fee
community health workers - ANSLocal, nonclinical workers who help patients live healthier lives and help
providers understand patients' needs.
copayment - ANSa fee the patient must pay in addition to the amount paid by insurance
cost - ANSthe value of a resource in its next best use
cost sharing - ANSdirect payments to providers by insurance beneficiaries.
decision tree - ANSa chart that depicts the values and probabilties of the outcome of a choice
deductible - ANSthe amount a consumer must pay before insurance covers any healthcare costs
diagnosis-related group - ANSthe basis of Medicare's case-based payment system for hospitals
expected value - ANSsum of each values of each possible outcome weighted by probability
expected value formula - ANSE(x)=(p1*X1)+(p2*X2)...
multiply the outcome by the probability and add all resulting products. ex:
(0.6X$120,000)+(0.4X$20,000)+....
fee-for-service (FFS) - ANSinsurance plan that pays providers on the basis of their charges for service.
($100 bill, $20 copy and $80 is paid by insurance)
global, risk-adjusted budget - ANSPayment of a fixed amount per person to the organization responsible
for providing care to a population. Risk adjustment means that the amount per person is higher for people
with higher risk of expensive illnesses
group model HMO - ANSA plan that contracts with a physician group to provide services.
, MHA 710 Exam 1
health savings account - ANSemployee's contributions and payments are not taxable
high-deductible (HD) plan - ANSPlan that has a deductible of at least $1,000 and may be combined with a
health savings account
HMO (Health Maintenance Organization) - ANSplan that provides comprehensive benefits to enrollees in
exchange for a premium
independent practice association (IPA) HMO - ANSA plan that contracts with independent practice
associations, which in turn contract with physician groups.
information asymmetry - ANSwhen one party in a transaction has less information than the other party
input - ANSa good or service used in production
life year - ANSone additional year of life
managed care - ANSloosely defined term that includes all plans except open-ended fee-for-service. it is
sometimes used to describe the techniques insurance companies use
marginal analysis - ANSanalysis of the effects of small changes in a decision variable (price or volume of
output) on outcomes (costs, profits, or probability of recovery)
marginal or incremental cost - ANSthe cost of producing an additional unit of output
medicare part A - ANScoverage for inpatient hospital, skilled nursing, hospice and home health services.
medicare part B - ANScoverage for outpatient services and medical equipment
moral hazard - ANSthe incentive to use additional care that having insurance creates
narrow network - ANSA limited group of providers who contracted with an insurance company
normative economics - ANSusing values to identify the best options. subjective statements of what
SHOULD be
objective probaility - ANSestimate based on frequencies
opportunity cost - ANSvalue of what one cannot do as a result of making a choice
out-of-pocket payment - ANSmoney a consumer directly pays for a good or service
output - ANSa good or service produced by an organization
per-service payment - ANSpayment for each billable service. providing an additional service increases
the bill
Point-of-service (POS) plan - ANSPlan that allows members to see any physician but increases cost
sharing for physicians outside the plan's network. (This arrangement has become so common that POS
plans may not be labeled as such.)
positive economics - ANSusing objective analysis and evidence to answer questions about individuals,
organizations, and societies (factual statements)
