Virginia Commonwealth University

Department of Kinesiology and Health Sciences

HPEX 300 – Delivery of Health Care in the U. S.

Health Care Financing & Managed Care: Important Terms and Concepts
(2019-2020)

Quad-function Model of Health Care Financing

Financing
Insurance
Payment
Delivery

Insurance
Benefits
Risk
Favorable
Adverse
Moral Hazard
Premium
Out-of-Pocket Payments (OOP)
Cost Sharing
Deductible
Co-payment
Co-insurance
Stop Gap/Stop Loss/Maximum OOP Liability
Types of Policies
Group
Individual
Medigap
Self-insurance

Managed Care
Capitation (Per member per month)
HMO
PPO
POS

High Deductible Health Plans/SO

HSA vs HRA
 HPEX 300: Health Care Delivery in the U. S.

The ACA
Dependent Children
Pre-existing Conditions
Preventive Services (implications for insured, insurer, costs)
Mandates (Individual, Employer)

Public Health Insurance

Title XVIII
Title XIX
Title XXI
Military (DoD, Tricare)
Veterans Health Administration
Indian Health Service

Payment
Fee-for-Service (FFS)
Retrospective
Prospective
DRGs

National Health Care Expenditures (NHCE)

Gross Domestic Product (GDP) Why is it important?

U. S. GDP in 2018 $20.50 trillion

U. S. NHCE in 2018 $3.66 Trillion (17.8% U. S. GDP)

Projected U. S. NHCE in 2026 $5.7 Trillion (20% U. S. GDP)
In 2017 U. S. Per Capita Health Care Spending was $10,739

Personal Health Care Expenditures (consists of . . .?)

Noteworthy Trends
Cost Shifting (Care Settings)
Hospital Revenue (Opportunities, Shortfalls)
Markets (Competition)
Prices (Relationship with competition)
Premiums
Services

Spending Health Care Dollars (Where does our money go?)

Health Care Financing – Important Terms to Know Pg 2 of 3

 HPEX 300: Health Care Delivery in the U. S.

Issues Going Forward (esp effects of ACA)

Overcoming adverse selection
Intentional Churning
Why might employers prefer a younger work force (and opt for self-insurance)
Maintaining the viability of the insurance plans market place (what leads to failure?)

Efficiency
Cost control
Methods of cost control

Revisiting the Iron Triangle of Health Care – A Different Perspective

Cost Containment
Access
Quality

Integrated Care Systems

Payer-Provider Integration (disappearance of independent physician practices)

Health Care Financing – Important Terms to Know Pg 3 of 3