Health Services Management and Economics Midterm

Midlevel Practitioners (advanced practice nurses/physician assistants) requirements

-Graduate degree + clinical training (state law defines scope of practice) -Certification exam + continuing education

economic implications of physicians moving from solo to group practices

-Greater market power: more leverage when negotiating reimbursement rates with insurers -Economies of scale: costs of running business shared among group

Licensed Practical Nurses/Licensed Vocational Nurses requirements

-High school degree + 1 yr training program -Licensing exam

AMA punctuation

-Period to separate each group of bibliographic elements (authors name and journal title) -Commas to separate closely related items (list of author names) -Semicolon to separate different elements in a bibliographic group (publisher's name and copyright year) -Colon between title and subtitle, before page numbers -Arabic superscript numerals placed outside periods and commas and inside colons and semicolons

Braidwood v. Becerra

-Plaintiffs' said the ACA makes it impossible to buy insurance unless they pay for preventative car they don't want or need. Also may violate religious ideals by validating homosexual behavior etc. -Decision: HHS cannot enforce the ACA's requirement for private health plans to cover without cost sharing reccommending preventive services

Organizational Behavior

-The study of how people act within organizations -How to create working conditions that foster employee effectiveness and organizational productivity

employee retention functions

-employee relations and engagement -training and development -managing compensation and benefits -assessing employee performance

Six Management Functions

1. Planning 2. Organizing 3. Staffing 4. Controlling 5. Directing 6. Decision making

Determinants of health

20% clinical care 30% health behaviors 10% physical environment 40% socioeconomic factors

Oligopoly

A few sellers, many buyers

Commercial Determinants of Health

Behaviors of private entities in the healthcare industry that influence health based on what is or is not provided to them, when, where, how, and at what cost.

utilization management

Controls health care costs and the quality of health care by reviewing cases for appropriateness and medical necessity.

Types of Healthcare Services

Direct Care Non-direct Care

cost sharing

Provision of a healthcare insurance policy that requires policyholders to pay for a portion of their healthcare services; a cost-control mechanism.

substitute good/service

a product or service that consumers see as essentially the same or similar-enough to another product

Heuristic

a simple thinking strategy that often allows us to make judgments and solve problems efficiently; usually speedier but also more error-prone than algorithms

Board member fiduciary responsibilities

duty of care, duty of loyalty, duty of obedience

adverse selection

tendency of consumers with high disease risks or costly medical conditions to systematically select health insurance plans with comprehensive coverage

Vision

•Desired future state •What organization plans to accomplish over a period of time (e.g., 3 to 5 years)

Nonexempt employees

(1) paid at least the minimum wage plus overtime, with no exceptions (2) employees may not offer compensatory time, or comp time, to nonexempt employees instead of overtime (3) any time worked in excess of 40 hours in a workweek must be paid at 1.5 times the hourly wage, also called time-and-a-half

Participants in healthcare market

- Consumers (patients) - Producers (doctors/hospitals) - Payers (public/private insurance or individuals)

Governing board responsibilities

- Strategic planning including mission, vision, and values - Oversight of quality, performance, and measurement - Financial oversight - CEO selection, performance evaluation, and succession planning - Risk identification and oversight - Communication and accountability - Governance

Nursing Assistants/Orderlies requirements

-75 hours on the job training and competency examination

Medicaid/CHIP

-A federal and state assistance program that pays for health care services for people who cannot afford them. -Funded by federal and state taxes

Medicare

-A federal program of health insurance for persons 65 years of age and older -Part A funded by payroll taxes paid by employers and employees -Part B and D funded by income taxes and enrollee premiums

Registered Nurse requirements

-Associate or bachelor's degree (typical), graduate degree (optional) -State licensure + continuing education -May have specialty credentialing

Physicians requirements

-Bachelor's degree + medical school + residency -State licensure + continuing education -Optional board certification, hospital privileges

Price sensitivity/elasticity

-Elastic goods: price change affects quantity demanded in price sensitive goods (ex.mental healthcare, prescription drugs) -Inelastic goods: price change does not change demand (ex. hospital admissions)

Modern Management Theory

-Systems Theory Measures workplace effectiveness based on interaction between org and enviro. Open v. Closed system -Patient Centered Management Systems approach, interdisciplinary. Addressing root causes of disease, SDOH. Patient engagement, collaboration, cultural competency,

Home Health Aides/ Personal Care Aides requirements

-Training program -Competency evaluation + state certification

negative effects of cost sharing for people with low incomes

-decreased enrollment and coverage renewals -many become uninsured and face increased barriers to care and financial burdens

Perfect competition v. healthcare market

-different prices for different buyers -incomplete information -seller/payer may influence price -multiple parties involved in financing

Open HMO, PPO, POS

-network providers contracted with health plan -some utilization management

insurer's role in the healthcare market

-pool and price risk -process claims -pay providers for care

conventional/indemnity insurance

-providers are independent of health plan -no utilization management

closed pre-paid panel group practice HMO insurance

-providers are integrated with health plan -strict utilization management

How managed care can reduce costs

-reduce price by increase patient cost-sharing -reduce quantity of services by limit of number of days/visits or rejecting claims -substitute cheaper inputs like Rx or replacing doctors with mid-level practitioners -reorganize by integrating providers with health plan (closed panel HMO)

IRS Form 990

-tax exempt organizations must file with IRS -Reports annual info (fiscal year) -publicly available -snapshot of organization's financial health, governance, and operations

Monopoly

1 seller, many buyers

POS (point of service)

A plan, combining features of an HMO and a PPO, in which members may choose from providers in a primary or secondary network.

Premium

A specific sum of money paid monthly by the insured to the insurance company in exchange for financial protection against loss.

PPO (Preferred Provider Organization)

A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network.

Coverage of preventative services under the ACA

ACA requires most health plans to cover certain preventative services without cost sharing -PrEP -Routine vaccines -Services for infants, children, and adolescents, Preventative care and screenings for women

The self sufficiency standard

Alternate to federal poverty measure Determines the amount of income required for working families to meet basic needs at a minimally adequate level, taking into account family composition, ages of children, and geographic differences in costs

deductible

Amount you must pay before you begin receiving any benefits from your insurance company

Charges v. Prices

Charges: •The "list price" for a health care service (amount charged by provider without any discounts) •Does not reflect what (most) patients pay •Typically set abnormally high (in relation to cost of providing the service) Prices: •Total amount that provider expects to receive from insurer/patient as payment for a health care service •Accounts for discounts negotiated by insurers (provider agrees to lower price in exchange for higher patient volume)

Problems with Mollie Orshansky's federal poverty measure

Does not account for -taxes -regional price differences -payments from anti poverty programs -assumes 2 parent household with one stay at home parent

Behavioral Management Theory

Focus on behaviors that contribute to workplace productivity, such as motivation, negotiation, conflict resolution, expectations, and group dynamics

Systematic management theory

Focus on regulation and control of organizational processes and procedures

HMO (Health Maintenance Organization)

Health insurance that requires a PCP and wants you to use only in-network doctors

Leadership v. management

Leadership= external Management= internal

Monopolistic Competition

Many sellers, many buyers, product differentiation, prices higher than perfect competition

Is the Absolute income hypothesis reality?

No. • Income has diminishing effect on health: • Substantial improvement in health initially as income increases • Health improvements then get smaller as income increases

Non-direct care

Provide products or services that support healthcare services, may be paid by insurance or out-of-pocket

Exempt employees

Salaried workers who are exempt from overtime provisions of the Fair Labor Standards Act.

Theories of management development

Systematic (1900s) Behavioral (1960s) Modern (1960s-today)

Extrinsic rewards

Tangible

actuarially fair price

The portion of a health insurance premium based on the probability of service use and the service cost

loading factor

The portion of the price of health insurance associated with the insurance company's cost of doing business (administrative costs, profit, etc.)

complementary good/service

a good whose use is related to the use of an associated or paired good

Diminishing marginal returns

a level of production in which the marginal product of labor decreases as the number of workers increases

coinsurance

a type of insurance in which the insured pays a share of the payment made against a claim. (usually a percentage)

risk aversion

an individual's unwillingness to take chances because of the possibility of a loss

The ACA's three-legged stool

career responsibilities, government responsibilities, enrollee responsibilities

risk pool

created when a number of people are grouped for insurance purposes (e.g., employees of an organization); the cost of health care coverage is determined by employees' health status, age, sex, and occupation.

economies of scale

factors that cause a producer's average cost per unit to fall as output rises

board of directors

for profits •Volunteers •Directors/Trustees •Officers = President, Vice-President, Secretary, Treasurer, Committee Chairs

Quantity margin v. severity margin

how much treatment v. who to treat

is employer payment of health insurance premiums taxable to employees?

no

Board of trustees

non profits •Volunteers •Directors/Trustees •Officers = President, Vice-President, Secretary, Treasurer, Committee Chairs

Demand-price relationship

price decreases, quantity demanded increases

Direct Care

provide healthcare services to individual people firsthand, traditionally paid by insurance

familiarity heuristic

tendency to favor things we are familiar with

availability heuristic

tendency to rely on the likelihood that information is true because it is easy to recall

confirmation bias

tendency to unconsciously and selectively notice information that confirms our existing beliefs

fundamental attribution error

tendency to underestimate the effect of external factors and instead attribute others' behavior to their internal disposition

Pre-ACA one legged stool

the premium death spiral

equilibrium price

the price at which the quantity demanded equals the quantity supplied

Overconfidence bias

the tendency to overestimate the accuracy of our beliefs and judgments

Total Premium equation

total premiums= (price*quantity)+overhead

AMA citation journal

• Author(s) surname(s) followed by initials without periods - if >6 authors, include first 3 names followed by "et al" - otherwise, list all authors - separate author names with commas and end the author list with a period • Article title and subtitle followed by a period - capitalize 1st letter of 1st word, proper names, names of clinical trials or study groups, and abbreviations that are normally capitalized - do not use quotation marks (unless used in the original title) • Abbreviated journal name followed by a period - use italics, capitalize 1st letter • Year followed by semicolon (or online publication month, day, and year if not published in paginated issue) • Volume number • Issue number in parentheses and followed by a colon • Part or supplement number, if pertinent • Location (i.e., initial page number, a hyphen, final page number, a period) • DOI not followed by a period - if DOI unavailable for online journal article, provide URL and Accessed [date]

AMA Citation Website

• Author(s) surname(s) followed by initials without periods or group name - if >6 authors, include first 3 names followed by "et al" - otherwise, list all authors - separate names with commas - end the author list with a period • Title of specific item cited followed by a period - if unavailable, use name of organization responsible for the website • Website name followed by a period • Date published followed by a period • Updated [date] followed by a period • Accessed [date] followed by a period • URL not followed by a period - use the URL that will take the reader directly to the information cited - avoid using a general URL such as the homepage - avoid using a URL with unnecessary characters/long search string

Absolute income hypothesis

• Increased income → increased consumption of health goods & services → lower mortality/morbidity • Assumes relationship between income level & health is constant (linear) and income is the only factor determining purchasing decisions

Moral hazard in the healthcare market

• Insurance increases consumption of healthcare services by making people less aware of, and less sensitive to, price • Excess service use results in higher premiums and higher healthcare prices •Insurers use utilization management to control "excess" service use

Managers

•Employees •Executive Director, Chief Medical Officer, Vice-President of Operations, etc.

Mission

•Fundamental purpose •What the organization does, for whom, and why •Broad and enduring

Value-based (pay for performance) payment model

•Payment for services provided plus bonus (or penalty) if quality and savings goals are (or are not) met •May apply to a specific clinical condition, care episode, or population

Factors that affect demand for healthcare goods and services

•Price •Time •Income •Care Quality •Health Status •Education •Age •Tastes & Preferences

Values

•Principles in which organization believes •Shape purpose, goals, daily behavior •Serve as foundation for activities

simplified capitation payment model

•Provider receives fixed monthly amount for all services provided to defined population •Payment provided regardless of whether patients use services (prospective) •Incentive to provide fewer services and/or keep patients healthy

fee-for service payment model

•Provider receives set amount for each service provided to patient •Fee schedule set in advance; payment is retrospective (after care provided) •Incentive to provide more services and more intense services

The RAND health insurance experiment

•Randomly assigned people to health plans with different out-of-pocket (OOP) costs •People with higher OOP costs spent significantly less on healthcare and consumed fewer services compared to people with zero OOP costs but had no change in health quality

Bundled payments payment model

•Single fixed payment for a specific episode of care or procedure shared by all providers involved (e.g., knee replacement) •Designed to cover average costs