Had capitation fees 

Kaiser largest non-profit HMO in the US 

Prevented states from preventing HMOs

Other laws prevented selective contracting and made it mandatory to include any willing providers 

Independant Practice HMO 

Private practices, have the options of treating other patients on fee-for-service basis and of contracting with other HMOs 

(dominate in the US) 

Charges a small copay but no deductibles when using in service providers

No gatekeeper 

Option to go out of service but with high copay and deductible 

Reimbursement for surgical treatment require pre-certification [dominant managed care]

Point of Service is hybrid hmo and ppo 

Gives options to chose between hmo or ppo indemnity plans at the time of service 

-Requires a gatekeeper

Pays providers less for the same services

-might be lower price in exchange for being included in the service area 

Rationing Services 

-If providers share financial risk with the insurance company they have incentive to limit services 

Providing extensive pediatric coverage 

Gym memberships 

Tattoo removal 

Big Names - like kaiser 

Non-Profit - emphasize quality

For Profit - max profit at expense of qlty 

Cream Skimming - Those with better health potentially chose HMO 

Managed Behavioral Health Care Organizations 

-Provide mental health and chemical dependancy coverage 

Covers hospitalization 

150 and some post op but no long term care

800$ deductible 

No copay first 60 

Bad coverage for catastrophic event 

Financed through payroll tax

uncapped tax on salaries (2.9%) of earnings paid half by employer. 

Contributions go to the trust fund 

Pays only 25% of the cost of benefits 

All physician services paid in part B 

Fee-for-service basis 

"accepting assignments" means paid directly by medicare. 

"Balance Billing" dont accept but treat medi patients and can charge more than the reimbursement amount 

Diagnostic related groups

Basis for payment changed to per case basis rather than item of expenditure 

-reported diagnosis with highest payout 

mandated that prospective payment system be reformed to include diagnostic based risk adjustment 

(after drg and admissions dropped, outpatient care increase) 

-switch plans once a year 

System of det. rates of reimbursement to physicians, factoring the amount of input resources (effort) used to produce a given service and the cost of providing that service

-fees lowered, doctors increase output 

-Limited balanced billing from 125% -115

Set allowable rates in medicare expenditures 

Medicare tax equity and fiscal act 

made gov the manager of system of competing health plans offered by private insurers. 

Medicare recipients had more freedom to chose private insurers

Medicare Prescription Drug improvement and moderniztion act 2003 

Medicare part D 

Drug benefits 

Donut reached, pay 100% up to 2600$  then covers again 

Insurance for the poor and disabled 

Children, disabled, elderly poor are largest covered 

Covers nursing homes and home health care for seniors 

Cost sharing between the federal and state government 

- freedom to states in way eligibility is determined 

State childrens health insurance program 

(balance budget act 1997) 

Covers low income uninsured children up to 200% of the poverty level 

Coverage for military vets and their dependants 

civilian health and medical program of the uniformed service 

switches to medicare at 65 

Economic Rent: Charging above competitive levels 

Locate in expensive neighborhoods 

No non-profit cases or medicaid 

Firms collude, or agree not to compete on the basis of price 

Shows utility as a measure of Income, leisure and altruism 

PID is disutility 

Charity care is a function of the level of need and the level of fees that can be charged. 

When fees are higher oc of time is higher and wont take on as much charity 

Incentivizes: minimum level of service that will satisfy the pateints minimum net benfit requirement 

Returns based on number of patients 

Costs are a function of quantity of services provided 

Is a disutility, which can be offset by HMO rewarding doctors for economizing services which reduce the negative effects of skimping. 

Skimping has a greater disutility than PID however 

Incentivizes laziness or to see too few patients but not to induce demand or skimp. This is called "SHIRKING" 

Liability induces changed in medical practice that entail costs to patients in excess of benefitss and would not have occurred in the absence of liability 

Insurance makes it easier for doc to practice def. medicine 

Professional Standards 

Concerns over patients trust 

Price that an insurance company charges for insurance. Based on expected payout plus admin costs, reserve funds, and profits or surplus to the insurance co.

Reflect the margin of error  

annual limits on the out of pocket expenditures that must be borne by the insured. After that is payed the insurance company pays 100% of additional expenses that year 

-increases moral hazard after expenditure reached to increase use

high types will fall out of the pool 

- mandated insurance 

Consolidate omnibus budget reconciliation act 1985 

-offer former employees the choice to keep insurance for 18 months but have to pay it all plus 2% 

Health insurance portability and accountability act 1996 

-illegal to exclude poepl because of past health claims 

Payroll tax exclusion on the portion the company paid in the insurance rather than wages.