Define Health

Medical Model

• the absence of death, disability, and disease 

World Health Organization WHO

• a state of complete physical/mental/social well-being (not just absence of disease)

Public Health

• the activities that society undertakes to assure the conditions in which people can be healthy, including organized efforts to prevent, identify, and counter threats to the health of public

prevention of disease, actions taken before disease onset.

Ex) immunizations, water fluoridation

early diagnosis and prompt treatment for disease.

Ex) Screenings and self- assessments

directed towards recovery or rehabilitation of a disease or condition after the disease has been developed.

Ex) cardiac rehab, OT

-Attain high quality, long lives that are free from preventable diseases, injury, disability, and premature death.

-Achieve health equity, remove disparities, and improve health of all groups.

-Create and physical and social environments to promote good health.

-Promote quality of life, healthy behaviors, and healthy development throughout all ages.

Assessment

Policy Development

Assurance

Healthcare system
   -Cultural or linguistic barriers
   -Fragmentation of healthcare systems

-Where minorities tend to receive care like free clinics. Free clinics may not have therapies needed to treat disease.

Clinical encounter
-       Provider-patient communication
-       Possibilities examined are bias, uncertainty, and stereotyping.
-       Bias- Some evidence suggests that unconscious biases may exist
-       Uncertainty- a plausible hypothesis, particularly when providers treat patients that are dissimilar in culture or linguistic barriers
-       Stereotyping- evidence suggests that physicians, like everyone else, use these “cognitive shortcuts”.

• IOM (Institute of Medicine) Report: Assessing the Quality of Minority Health Care
•  National Healthcare Disparities Report

1.   Define health determinants

Health determinants – the range of personal, social, economic, environmental, biological factors which determine the health status of individuals or populations

Determinants can be either modifiable (poverty) or un-modifiable (age)

Most determinants aren’t easily modifiable by individuals; rather require a combination of action from individuals, organizations, governments, communities, etc. 

ecological perspective of health

Factors including biology (genetics, natural aging), environment (food, air, water, communicable diseases), lifestyle (diet, injury, sexual behaviors), psychosocial (poverty, stress, personality, cultural factors), and the use and access to healthcare services are interrelated. 

Variations in one outcome influence changes in others.  This complex set of interactions, called the ecological perspective of health, draws attention to general factors that can result in many diseases, rather than focusing on specific factors that contribute little to population wide health outcomes.  

“most important” determinants of health (4)

Health behaviors (40%)

                  Tobacco, Diet and exercise, Alcohol use, High risk sexual behavior, Violence

Socioeconomic factors (40%)

                  Education, Income, Social disruption

Health Care (10%)

                  Access, Quality of outpatient care

Physical Environment (10%)

                  Air and water quality, Built environment

the study of the distribution of disease in humans and the study of factors that have been associated with various disease.

Or

The study of the distribution and determinants of health and diseases, morbidity, injuries, disability, and mortality in populations. Epidemiologic studies are applied to the control
of health problems in populations.

A type of rate that has not been modified to take account of any of the factors such as the demographic make-up of the population that may affect the observed rate

• Includes a time period during which an event occurred.
• Numerator consists of the frequency of a disease over a specified period of time.
• Denominator is a unit size of population.
• Aid in making comparisons but have limitations

Adjusted Rate

Most common is age adjusted: Summary rate that accounts for age difference between populations. Any differences between rates cannot be attributed to age. ADJUSTED RATES ARE ONES THAT TAKE AWAY A VARIABLE SO THAT IT DOES NOT AFFECT THE RATE ANYMORE; however, they are good just for comparison, alone they are worthless

Incidence

the most fundamental measure in epidemiology, quantifies development of new cases of disease that occur during a specified period of time in previously disease free or condition free individuals who are at risk. (In other words, it measures the transition from a specific state of health to a different state of health.) SUBJECT MUST BE AT RISK OF EXPERIENCING THE HEALTH OUTCOME. Incidence includes both proportions and rates

rates

are a ratio in which time is explicitly contained within the denominator
                        - 3 elements: 1- count of health outcomes during some period of observation (in the numerator); 2- unit size of population under study (in the denominator); 3- time period of observation (in the denominator)

ratios

are a fraction but do not have a specified relationship between the numerator and denominator    

relative risk

risk ratio- a measure of relative risk, compares the incidence proportion (risk) among the exposed € with the incidence proportion (risk) among the nonexposed (NE)
                        - the ratio is (IE/INE)

Association- Epidemiology does not determine the cause of a disease in a given individual, it determines the relationship or association between a given exposure and frequency of disease
in populations

- Associations can be causal or non-causal

- We infer causation based upon the association and several other factors

Causation- A cause of a disease event is an event, condition, or characteristic [exposure] that preceded the disease event and without which the disease event either would not have occurred at all or would not have occurred until some later time
      - Does NOT imply that disease will definitely occur if exposure occurs

- Not everyone who smokes will get lung cancer!
- Clearly we’re using a probabilistic definition of “causality”
- Exposure increases/decreases the likelihood of the disease occurring

• Chance (random error)  -- ok
• Bias (systematic error)-- bad
• selection bias (unrepresentative sample)
• information bias (measurement error)
• confounding bias (distortion of cause/effect relationship by some other factor)

distortion of cause/effect relationship by some other factor

- 3 properties of a confounder:

1. Must be associated with exposure of interest;

2. Must be a risk factor for the disease (outcome)- must be a causal determinant of the disease

3. Is NOT on the causal pathway between exposure and dis

- The number of dispensed Rxs has shown constant growth year to year

 - Amount of growth decreased following the recession

- Age of population:
     Number of Rxs prescribed increases significantly after age 45, and also higher in

kids <5

- Insurance coverage
      

- Availability

ADEs:
- Injuries or problems related to medication use and errors
- May be inevitable or preventable (a lot of ADEs are preventable)
- Categories: Adherence, Patient safety (High risk meds in elderly)

Why important?:
- A lot of money is spent to treat ADEs (estimated $887 million - $3.5 billion)

Possible outcomes of ADEs:
- Death, organ damage, coma, allergic rxns, hospitalizations

Causes:
-Patient behavior, poor prescribing, provider roles, time constraints, information problems

Solutions:
- Improve communication w/ patients & give patients opportunities to consult at various
stages of care
- change pharmacist role
- provide incentives w/ drug use (pay pharmacist as a provider of care)
- improve relationships between providers (understand roles)
- reduce info problems (monitor drug/ provide feedbac

What’s MTM?:
- A way to provide patients with comprehensive med review, monitor drug use/ effects,
and educate those with high risk for drug problems

Role of pharmacist in MTM?:

- Personal Medication Record, Medication Therapy Review, Medication

Related Action Plan, Intervention/ Referrals, Documentation/ Follow-up

MTM benefits:
- Improve collaboration between pharmacist and other healthcare providers
- Enhance communication between  patients and health care team
- Optimize medication use/ improve patient outcomes

What is MHM?:
- “A vision of primary care as it should be”
- Patient is assigned MD, and MD has a health care team associated with him, and the
team keeps each other updated with pt info

Pharmacist roles:
They’re a team member, in team based care.  They know the drug stuff.

Key aspects:
- Collaboration between providers
- Use Health Information Technology to integrate system
- Make pharmacist a key player

- Cancers
- Pulmonary diseases
- Cardiovascular diseases
- Reproductive effects

1. Market Assessment: is there a need in  your pt pop? others providing service?
2. Service Provision: qualified staff? where will service be provided? how often? content?
3. Pricing: cost? ($60-120/hr) who pays?  (insurance/pt) when do they pay?(before/if

successful at end/ throughout)

4. Promotion: differentiate from product-based transaction
5. Quality Assurance: how to make sure pts are successfu

Become trained immunizers and offer immunizations in their pharmacies

o   Certified immunizers were more likely to be advocates, partners (host non-pharmacist immunizers) and providers than non-certified

Advocate immunizations to their patients

o   In person
o   Sending out mailings
o   Posters/ads in the pharmacy

Schools and Colleges of Pharmacy should all have some sort of public health/vaccination trainin

Goals: prevent illness/maintain health, provide care to treat illness, finance care that people need, decrease disparities in health care

Measured by: public health, new technologies, rates of insured/uninsured, number of people with Medicare/Medicaid, number of people in hospitals, number of people with chronic conditions, life expectancies, infant mortality rates

Brand name drug

: Drug produced by the firm who conducted research and development and obtained patent for it. Single source until patent expires.

 Generic drugs:

When patent expires for brand name drug, it can be produced by other firms often for lesser amount. Multisource drug.

 Multisource drug

aka off-patent drugs. A drug which is produced and available from more than one manufacturer. Only happens when a patent for a single source drug expires.

 Single source drug

When a drug is covered by a patent, only the firm with the patent can produce and market the drug => single source.

Drug wholesaler

link between drug manufacturers and pharmacies. They assemble, sort and disperse drug products.

 Pharmaceutical manufacturer

Manufacturer of drug. In the case of brand name drug, the manufacturer is involved in the innovation and research and development of the drug. In the case of generic, manufacturer produces “identical” drug  at lower cost.

Pharmaceutical benefit manager (PBM):

An organization that provides administrative services in processing and analyzing prescription claims for pharmacy benefit and coverage programs. Their services can include contracting with a network of pharmacies,: negotiating rebate arrangements, developing and managing formularies and prior authorization programs. Many PBMs also operate mail order pharmacies. Examples: Medco, Express Scripts, CVS/Caremark.

Third party prescription program

 program in which an insurer pays or reimburses the patient or pharmacy for all or part of the cost of services provided. Payment amounts established by third party drug program are derived from a formula which considers the amount of drug being dispensed and a dispensing fee. 

Derived demand

Demand for one good or service occurs as a result of the demand for another intermediate/final good or service. 

Directed demand

:Demand based on an outside influence. Providers decide what drugs will be used by patients. They do not typically pay for, nor take possession of, the drugs.

 Information asymmetry

 Knowledge of innovative brand name drug protected by a patent, and thus information is not shared equally between various manufacturing firms.  

 Channel of distribution

Pathway between manufacturing of a drug and final purchase/consumption by patient. ManufactureràWholesaleràPharmaciesà Patient and all steps inbetween.

Pharmacy network

Group of providers(pharmacies) who agree to discounted reimbursement paid by insurance company. Goal is to provide sufficient access for patient and control cost and promote quality.

Reimbursement

Amount of money pharmacy is being paid for drug product and their service. Total of insurance payment and patient copayment/coinsurance. 

Ingredient Cost

The cost of the drug product that is dispensed in a prescription. This can refer to the actual acquisition cost (AAC) or cost of goods sold for a pharmacy, or to the amount that an insurer would use in determining payment to a pharmacy for the drug dispensed in a covered prescription.

Dispensing Fee

The charge for the professional services provided by the pharmacist when dispensing a prescription including overhead expenses and profit.

Cost sharing

Agreement between insurance company and patient where patient carries some of the financial burden for the service being provided/purchased. May be in the form of coinsurance or copayment.

AWP

Average Wholesale Price: a national average of list prices charged by wholesalers to pharmacies. With few exceptions, the AWP is the manufacturers suggested list price for a wholesaler to charge a pharmacy for a drug. Typically higher than pharmacies AAC.

AAC

: Actual Acquisition Cost: the net cost at which the pharmacy acquires a drug. It varies with the size of the container and the source of the purchase.

EAC

 Estimated Acquisition Cost. An estimate of the price at which most pharmacists can purchase a drug from a wholesaler or manufacturer which is developed by PBMs in order to establish payment amounts to pharmacies for the drug costs of covered individuals.  

Copayment

A cost sharing requirement under a health insurance policy that requires the patient to pay a specified dollar amount for each unit of service.

Coinsurance

Deductible

amount patient pays in order to receive insurance benefits.

. Define price of reimbursement terms relevant to managed care and drug coverage programs.    (4)

Assignment: Every service has a specific cost assigned to it. (ie. Cost of dispensing 14 500mg Amoxicillin Caps for certain disease state.)

Usual and Customary Cost: The amount a pharmacy or provider charges self-pay patients. Includes drug cost and dispensing fee.

Discounted Reimbursement: Rate by which insurance company or PBM purchases good or service from provider, often at a discounted rate.

Capitation: A payment arrangement which pays providers a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care. Remuneration is based on average expected health care utilization of that patient. 

. Describe basic mechanisms and structures of prescription drug coverage that are designed to control drug costs and control drug utilization, including private and public coverage plans. (4)

Formulary: A list of drugs approved for use within a health care setting. Primary goal is to promote safe, effective and appropriate drug therapy.

Prior Authorization: Series of steps to gain permission from payer before a drug can be prescribed &/or reimbursed. May require trial and error of formulary drugs.

Generic Substitution: Substitute generic drugs for brand name drugs. Connected to dispensing fees and copayments…. Often cheaper for patient. Some plans dictate mandatory substitution.

Patient Cost Sharing: Places some of the burden of the cost directly on patient in order to influence a cheaper/more efficient drug therapy. Copayments, coinsurance, deductibles.

·       Ambulatory patient Groups (APGs)

o   Prospective payments for outpatient services are based on diagnosis

·       Capitation

o   Prospective reimbursement of a fixed amount each month for each enrolled patient, regardless of the amount of healthcare services actually paid

·       Diagnosis-related groups (DRGs)

o   Prospective reimbursement of a flat rate based on patient’s admission diagnosis

·       Discounted fee-for-service

Retrospective reimbursement based on a negotiated fee schedule

·       Duration of treatment

o   Length of stay/episode of care/number of prescription drug refills

·       Flat of the curve

o   Additional healthcare expenditures produce very little incremental benefit

·       Intensity of services

o   Number and types of diagnostic tests/number and types of treatments ordered/relative expense of prescription drug or mix of brands vs generic

·       Market structure

o   Perfect competition

o   Monopolistic competition

o   Monopoly

o   Oligopoly

·       Monopolistic competition

o   Market structure closest to perfect competition

o   Only difference from perfect: it does not have standardized and interchangeable products

o   Companies rely on product differentiation- ex) automobile

·       Monopoly

o   Only 1 seller of a product that has no substitute

o   Can produce less and charge more to get same revenue 

·       Monopsony

o   Only 1 buyer, buyer sets the price

o   Ex) Fed Gov. for healthcare services like Medicare/Medicaid patients --> fed gov tells providers what they will/wont pay for

·       Oligopoly

o   A few sellers and many buyers

o   Dominant firms can exert influence through price leadership

o   Ex) In med-sized urban areas, hospitals may represent an oligopoly

·       Oligopsony

o   Many sellers and a few buyers

o   Ex) 3 large national pharmacy benefit managers pay for the large majority of prescriptions

·       Patient-induced demand

o   In health insurance, the out-of-pocket costs for health services are generally much less than the actual cost for providing those services, because the patient is paying less, he will want to use these services

o   Can be bad: moral hazard- overconsumption of health services

o   Can be good: seek health services earlierà avoid more expensive expenditures in the future

·       Per diem

Prospective reimbursement of a flat rate per day witout regard to actual cost

·       Perfect competition

• §  Many buyers and sellers
• §  Freedom of entry and exit
• §  Standardized products
• §  Full and free information
• §  No collusion

• 
  

·       Roemer’s Law

o   “A bed is built is a bed filled”—Supplier-induced demand

o   Close correlation between supply and rates of utilization

·       Supplier-induced demand

Correlation between the supply and the rate of utilization (demand)

·       Tiered co-payments

o   Allow lower co-payments for preferred products (generic drugs) and higher co-payments on nonpreferred products (expensive brand drugs)

the payment of a healthcare service directly to the provider rather than the beneficiary

Cost Sharing

a provision in managed care plans requiring patients to pay a portion of the cost from services received (Ex: coinsurance, co-payment, deductibles)

Medically Needy

the group of people who would be eligible for Medicaid under one of the mandated or optional groups, except that their income and/or assets are higher than allowed by the state.

Medigap Insurance

Ø: an additional, private insurance for Medicare beneficiaries designed to pay for many of the charges from Medicare services for which the beneficiary is responsible

ØMedicaid recipients that the federal government requires state Medicaid programs to cover

• AFDC (aid to families with dependent children)
• SSI recipients (aged, blind, disabled)
• Qualified medicare beneficiaries

Optionally Categorically Needy

Øneedy individuals who do not meet the requirements for mandated Medicaid coverage, but may be covered at the option of the state’s Medicaid program

• other aged, disabled
• other children
• Mentally Ill

• patients- copays, prior auth
• hospitals- DRG payment, capitation
• physicians- discounted reimbursement, prior auth, preferred drugs
• pharmacies- discounted reimbursement, preferred drug list (PDL)
• pharmmaceutical manufacturers- rebates

• A- in patient care, skilled nursing facility, home health care, hospice care
• B- (supplementary)- outpatient MD servicse, diagnostic services, MD ad ministered drugs, other services
• C- (Managed care plans, supplementary--> medicare pays premium, MCO assumes risk for cost of care) plan may cover more services or services to a greater extent (than A &B)
• D- drug coverage (Preferred drug list)

·       What factors cause changes in the supply or demand of a product or service?

o   Demand

§  Prices of related goods

§  Money income of the consumer

§  Number of consumers in the market

§  Attitudes, tastes, and preferences of the consumer

§  Consumer expectations with respect to future prices and incomes

o   Supply

§  Techniques of production (technology)

§  Number of sellers in the market

§  Resource costs (materials and wages)

§  Prices for related goods

§  Sellers’ expectations

·       What factors cause consumers to be more sensitive to changes in price?

o   Availability of substitutes for the commodity

o   The price of a commodity relative to consumers’ incomes

o   The number of alternative uses for the commodity

o   Short vs Long run

Describe and discuss the conditions for and expected outcomes for different market structures and how they may appear in the health care system.

·       Supply-side (sellers)

o   Monopolistic competition

§  People competing use differential of products among other providers in area

o   Monopoly/Oligopoly

§  Ex) patent protection, only pharmacy around

·       Demand-side (buyers)

o   Monopsony/Oligopsony

§  Few buyers (1-2/3-5) have power so they can reduce the mount of money they pay

§  Ex) insurance companies are much better at reducing reimbursements of providers than individuals

·       What determines whether an event is insurable or uninsurable?

Pure Risk (not speculative)

a.      Probability of a peril occurring in a population can be accurately determined                                       
b.     Peril is an irregular event on an individual basis                                                                                                
c.      Loss must be accidental                                                                                                     
d.      Event must result in a substantial loss
e.      Loss must be measurable
f.      Individual must have an insurable interest

• rx doesnt represent substantial loss (financially)
• some rx have no accidnetal risk (BC)
• Rx= lg number of sm claims --> admin cost represent a sig % of total expendtures

·       Why do health insurance plans cover prescriptions despite their incompatibility with some risk management principles?

o   Drug therapy often preventative (less expensive than other med alternatives)

o   Possibly driven by sense of entitlement by employees

o   **rising Rx expenditures are starting to make Rx drugs more of an insurable risk for some groups of patients (elderly)

·       Why are most private health insurance policies offered through employers?

• avoid adverse selection
• less expensive than individ policies
• red tax liability for workers/employees

What can insurance programs do to reduce their risk?

• group policies
• elimination period
• coverage limitations
• coordination of benefits

. Describe the role of employers in the purchase of health insurance for employees.

• decide to offer coverage or not
• how much premium to pay
• employees pay balance
• what services to cover
• purchase ins or self-fund healh expenses

employers want health/productive employees but want to red amt paid/benefits

• us citizens
• 65+ (and spouses) if paid into ss for 10+ yrs
• disabled >24 mo
• end stage rendal disease (dialysis/transplant)

• the payment of healthcare service directly to the provider rather than the beneficiary
• (phsy. can choose a higher price than covered and beneficiary will be responsible for the differenc ebetween price + 20% coins)
• helps keeps health costs low for beneficiaries and easier/less hassle

• ins avail/ to medicare recipients that is designed to cover the cost for healthcare services not covered by medicare
• medicare supplement/medigap ins - additional private ins.

• inpatient/outpatient hospitilization
• lab/x-rays
• nursing home/home health care (21+)
• family planning
• midwife/physician/nurse practitioner services
• early/periodic screenings/diag treatment services for individ <21

• podiatry/prosthetics
• optometry
• rx
• dental
• hospice
• intermediate care for mental retardation
• clinical services