Term
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Definition
| Quality-Adjusted Life Years; the time spent in a health state (for a particular disease with specific symptom severity) multiplied by the utility score of that state. |
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Term
| Rate of return to a professional education |
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Definition
| Calculated by estimating the costs of an investment in a medical education, including both explicit and implicit (opportunity) costs and the expected higher financial returns as a result of that investment. More precisely, the internal rate of return is that discount rate which, when applied to the future earnings stream, will make its present value equal to the cost of the investment in a medical education. |
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Term
| Ratio of charges to charges to cost |
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Definition
| The hospital's charges to Medicare patients as a portion of its charges to all patients was the ratio of the hospital's total costs that would be reimbursed by the government. |
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Term
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Definition
| Assumes that the decision-maker chooses that course of action offering the highest ratio of marginal benefits to marginal costs. |
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Term
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Definition
| Based on society's value judgement that those with higher incomes should be taxed to provide for those with lower incomes. |
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Term
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Definition
| A proposal for national health insurance under which individuals are given a tax credit to purchase health insurance. The tax credit may be income related, that is, declining at higher levels of income. Persons whose tax credit exceeded their tax liabilities would recieve little or no tax liability, the tax credit is essentially a voucher for a health plan. |
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Term
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Definition
| When those with lower incomes pay a higher portion of their income for that tax than do those with higher incomes. |
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Term
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Definition
| Standardized data representing both process and outcome measures of quality; collected by independent organizations to enable purchasers to make more informed choices of health plans and their participating providers. |
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Term
| Resource-based relative value scale (RBRVS) |
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Definition
| The current Medicare fee-for-service payment system for physicians, initiated in 1992, under which each physician service is assigned a relative value based on the presumed resource costs of performing that service. The relative value for each service is then multiplied by a conversion factor (in dollars) to arrive at the physician's fee. |
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Term
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Definition
| When all inputs are increased and the output increases by a larger percent, then returns to scale are said to exist. |
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Term
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Definition
| The employer adjusts the insurance premium to reflect the risk levels of the employees enrolled with different insurers. |
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Term
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Definition
| Preferring an assured outcome to a more risky alternative. |
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Term
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Definition
| Represents a population group that is defined by its expected claim experience. |
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Term
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Definition
| Occurs when insurers attempt to attract a more favorable risk group than the average risk group, which was the basis for the group's premium (preferred risk selection). Similarly, enrollees may seek to join a health plan at a premium that reflects a lower level of risk than their own (adverse selection). |
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Term
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Definition
| Used in antitrust cases to determine whether the anti-competitive harm caused by a particular activity (for example, a merger) exceeds the pro-competitive benefits of not permitting the particular activity. |
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Term
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Definition
| A basic assumption underlying economic analysis that there are insufficient resources, that is, time or money, to satisfy all wants. |
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Term
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Definition
| A utilization review approach in which decisions to initiate a medical intervention is typically reviewed by two physicians. |
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Term
| Self-funding self-insurance |
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Definition
| A health care program in which employees fund benefit plans from their own resources without purchasing insurance. Self-funded plans may be self-administered, or the employer may contract with an outside administrator for an administrative service only (ASO) arrangemen. Employers who self-fund can limit their liability, via stop-loss insurance. |
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Term
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Definition
| Focuses on the services (inputs) actually used in treatment and is somewhat similar to the current MCPI, which also measures how the price of a given set of services (inputs) has changed over time. |
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Term
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Definition
| A practice previously engaged in by HMOs to set their premiums just below those charged by traditional insurers. |
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Term
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Definition
| Antitrust legislation established in 1890 to prevent anti-competitive behavior. |
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Term
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Definition
| Caused by changes in input prices and/or a technology that would change the marginal productivity of inputs. |
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Term
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Definition
| A form of national health insurance in which a single third-party payer, usually the government, pays the health care providers and the entire population has free choice of all provivders at zero (or little) out-of-pocket expense. |
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Term
| Skilled nursing facility (SNF) |
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Definition
| A long-term care facility that provides in-patient skilled nursing care and rehabilitation services. |
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Term
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Definition
| Offers one or more limited health care benefits, such as pharmacy, vision, and dental. |
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Term
| Staff-model health maintenance organization |
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Definition
| A type of HMO that hires salaried physicians to provide health care services on an exclusive basis to the HMO's enrollees. |
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Term
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Definition
| Demand exceeds supply at the market price. May occur because the price is set below the equilibrium level by government or because of barriers to entry. In the case of entry barriers, the market price or wage is greater than if entry were permitted; the effect is to cause those in the industry to earn excess profits, which is an indication of a long-run shortage. |
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Term
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Definition
| Provides protection from losses resulting from claims greater than a specific dollar amount (equivalent to a large deductible). |
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Term
| Structural quality measures |
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Definition
| Quality of care that focuses on the context of the environment within which medical services are provided. At the institutional level, these measures can include facility licensure, compliance with health and safety codes, and medical staff appointments. |
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Term
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Definition
| Costs that have already been incurred and should be ignored for economic decision making. |
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Term
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Definition
| When physicians modify their diagnosis and treatment to favorably effect their own economic well-being. |
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Term
| Supply and demand analysis |
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Definition
| Used for predicting new equilibrium situations; for example, predicting the effect of a change in demand for a service or in its cost of production on the price and quantity of that service. |
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Term
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Definition
| When the quantity supplied exceeds the quantity demanded at the market price. With respect to health professionals, a surplus occurs when the profession, on average, earns a below normal rate of return. |
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Term
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Definition
| An approach for estimating economies of scale by examining the size distribution of firms in an industry to determine which size of firms become more numerous. |
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Term
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Definition
| A model of supplier-induced demand that assumes physicians will induce demand only to the extent that they will achieve a target income determined by the local income distribution, particularly with respect to the relative incomes of other physicians and professionals in the area. |
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Term
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Definition
| Task or specific-purpose licenses would recognize that physicians are not always qualified to do all the tasks for which they are licensed to perform. Task licensure would ensure that only those qualified for a particular task would be permitted to perform that task. |
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Term
| Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) |
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Definition
| Legislation that set limits on Medicare reimbursement on per-case basis for hospital costs (DRGs) and limited the annual rates of increase in DRG payments. |
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Term
| Tax-exempt employer-paid health insurance |
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Definition
| Purchased by the employer on behalf of their employees; is not considered taxable income to the employee. By lowering the price of insurance, the quantity demanded is increased (as well as its comprehensiveness). The major beneficiaries are those who are in higher income tax brackets. |
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Term
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Definition
| Inputs used in a production function produce the maximum output for a given time period. |
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Term
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Definition
| Includes the most complex services, such as transplantation, open heart surgery, and burn treatment, provided in inpatient hospital settings. |
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Term
| Third-party administrator (TPA) |
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Definition
| An independent entity that provides administrative services, such as the processing of claims, to a company that self insures. A TPA does not underwrite the risk. |
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Term
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Definition
| An organization, such as an HMO, insurance company, or government agency, that pays for all or part of the insured's medical services. |
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Term
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Definition
| The price a consumer actually pays for an item in the CPI market basket of goods and services. |
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Term
| Triple option health plan |
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Definition
| A plan in which employees may choose from an HMO, PPO, or indemnity plan, depending on how much they are willing to contribute. |
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Term
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Definition
| Services rendered by the provider without reimbursement, as in the case of charity care and bad debts. |
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Term
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Definition
| When the entire population is eligible for medical services or health insurance. |
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Term
| Usual, customary, and reasonable fees (UCR) |
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Definition
| A method of reimbursement in which the fee is "usual" in that the physician's office, "customary" in that community, and "reasonable" in terms of the distribution of all physician charges for that service in the community. |
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Term
| Utilty maximizing model of hospital behavior |
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Definition
| The nonprofit hospital's pricing and investment policies are assumed to be undertaken for the purpose of maximizing the utility of the hospital's decision-makers, namely, the management and trustees of the hospital. These decision-makers prefer a large, high-quality, prestigious institution. |
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Term
| Utilization review organization (URO) |
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Definition
| An organization that conducts utilization reviews to determine whether specific health care services(s) are medically necessary and delivered at an appropriate cost and quality. These organizations provide their services to various health plans, employers, and insurers. |
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Term
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Definition
| The percent of a hospital's budgeted registered nursing positions that are unfilled. |
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Term
| Value jusgement of minimum provision |
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Definition
| An underlying national health insurance value in which all persons should receive a minimum quantity of medical services. |
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Term
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Definition
| The organization of a delivery system that provides an entire range of services, to include inpatient care clinics, outpatient surgery, and home care. |
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Term
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Definition
| A merger between two firms that have a supplier-buyer relationship. |
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Term
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Definition
| The organization of a delivery system that relies on contractual relationships, rather than complete ownership, to provide all medical services required by the patient. |
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Term
| Voluntary performance standard |
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Definition
| An expenditure target adopted by the Medicare program to limit the rate of increase in its expenditures for physician's services. |
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Term
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Definition
| Economics relies on a set of welfare criteria to determine whether someone is made better or worse off as a result of a policy change. |
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