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Health Care Glossary

Health Care Glossary

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Published by: db_sheetal on Feb 05, 2009
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12/01/2014

The distribution of financial risk among parties furnishing a service. For example, if a
hospital and a group of physicians from a corporation provide health care at a fixed price,
a risk-sharing arrangement would entail both the hospital and the group being held liable
if expenses exceed revenues. A method by which medical insurance premiums are shared
by plan sponsors and participants. In contrast to traditional indemnity plans in which
insurance premiums belonged solely to insurance company that assumed all risk of using
these premiums. Key to this approach is that the premiums are only payment providers
receive; provides powerful incentive to be parsimonious with care.

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