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Definition
| A market structure that is characterized by many competing firms, each producing a slightly differentiated product that is a close substitute to the products produced by competing firms. |
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Definition
| A market structure in which there is a single seller of a product that has no close substitutes. |
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| Monopoly model of physician pricing |
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Definition
| Physicians face a downward-sloping demand curve for their services and set prices according to where marginal revenue equals marginal cost. |
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Definition
| A market structure characterized by a single buyer. |
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| A situation where the individual alters their behavior after they have acquired insurance. Since insurance lowers the price of medical care, the insured will consume more care than if they had to pay the full price themselves. |
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Definition
| For a given population, it is the ratio of number of individuals who die divided by the average size of the population. |
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Definition
| A system in which a corporation owns, leases, or manages two or more acute care hospitals. |
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Definition
| A system in which reimbursement for medical services is made by multiple third-party payers. |
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Term
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Definition
| A negative price is when a person or beneficiary group is paid to use a service. When the time and travel costs of a beneficiary group is lowered, for example, locating facilities closer to the beneficiaries, these may also be considered to be negative prices. |
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Term
| Network health maintenance organization |
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Definition
| A type of HMO that signs contracts with a number of group practices to provide medical services. |
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Definition
| Medical or nursing care that is provided by the patient's spouse or family without pay. |
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Term
| Non-price hospital competition |
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Definition
| Hospitals compete on the basis of their facilities and services and the latest technology, rather than on price. |
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Definition
| An increase in income leads to greater consumption. |
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Term
| Normative judgment of a shortage |
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Definition
| A noneconomic definition of a health manpower shortage. Estimates of such a shortage are based on a determination of "need" in the population or on some professional estimate of health manpower requirements. |
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Definition
| An institution that has restrictions placed on how its surplus (earnings) are distributed. |
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Term
| Nurse participation rates |
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Definition
| The percentage of trained nurses that are employed. |
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Term
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Definition
| A market structure characterized by a few firms, with each firm considering the actions of the other firms when making price and output decisions (interdependence among firms). |
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Term
| Omnibus Budget Reconciliation Act of 1989 |
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Definition
| Congressional passage of this legislation resulted in restructuring physician reimbursement under the Medicare program. |
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Term
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Definition
| Relevant costs for economic decision-making, they include explicit as well as implicit costs. For example, the opportunity costs of a medical education include the foregone income the student could have earned had they not gone to medical school. |
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Definition
| Occurs when the marginal benefit of the last unit equals the price of that unit, which in turn equals the marginal cost of producing the last unit. |
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Term
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Definition
| A technique for allocating scarce resources so as to minimize the cost of producing a given output or, similarly, maximize output, subject to a budget constraint. For example, costs are minimized when the ratio of the marginal product of each input divided by its cost is equal. |
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Definition
| The amount that the beneficiary must pay after all other payments have been considered by the health plan. |
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Term
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Definition
| A drug that is available for public purchase without a prescription. |
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Term
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Definition
| A price index in which individual prices are weighted by the final period quantities. This index measures how much prices have increased using the current market basket in both time periods. |
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Term
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Definition
| A situation where high-cost patients are not admitted to or discharged early from a hospital because the patient either has no insurance or the amount reimbursed by a third-party payor will be less than the cost of caring for that patient. |
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Term
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Definition
| A method of payment to institutional providers that is based on a fixed daily amount and does not differ according to the level of service provided. |
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Term
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Definition
| Would require physicians to maintain their qualifications by requiring them to undergo periodic testing for relicensure. |
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Term
| Physician agency relationships |
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Definition
| The degree to which the physician acts on behalf of the patient. Agency relationships may be perfect or imperfect and the method of physician payment (fee-for-service or capitation), would produce different behavioral responses among imperfect physician agents. |
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Term
| Physician control model of the hospital |
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Definition
| The hospital's behavior, pricing, cost control, and investments are expected to be determined according to the medical staff's economic interests. |
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Term
| Physician hospital organization (PHO) |
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Definition
| An organization where hospitals and their medical staffs develop new types of group practice arrangements that will allow the organization to seek contracts from HMOs and other carriers on behalf of their physicians and hospitals. |
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Term
| Physician market entry barriers |
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Definition
| Licensure, graduation from an approved medical school, and continual increases in training times cause the supply of physicians to be smaller than if such barriers did not exist. The ostensible reasons for such barriers, namely, a high-quality workforce, could be achieved more directly. |
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Term
| Physician to population ratio |
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Definition
| The number of physicians per 100,000 population has often been used as an indicator of a shortage or surplus of physicians. These ratios do not consider changes in demands for physicians, increases in physician productivity, nor do differences in these ratios over time indicate the importance, in terms of physician fees of shortages or surpluses using this approach. |
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Term
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Definition
| Under this form of national health insurance (also referred to as an employer mandate) employers are required to either provide some basic level of medical insurance to their employees ("play") or pay a certain amount per employee into a government pool that would provide the employee with insurance. |
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Term
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Definition
| A plan that allows the beneficiary to select from participating providers (the HMO) or use nonparticipating providers and pay a high co-payment. |
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Term
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Definition
| Included as part of health insurance reform that enables the insured to change jobs without losing their insurance or having to be liable for another pre-existing exclusion period. |
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Term
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Definition
| To protect themselves against adverse selection by new enrollees, insurers use a preexisting exclusion clause that excludes treatment for any or specified illnesses that have been diagnosed within the previous (usually) 12 months |
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Term
| Preferred provider organization (PPO) |
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Definition
| An arrangement between a panel of health care providers and purchasers of health care services in which a closed panel of providers agree to supply services to a defined group of patients on a discounted fee-for-service basis. This type of plan offers a limited number of physicians and hospitals, negotiated fee schedules, utilization review, and consumer incentives to use PPO participating providers. |
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Term
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Definition
| Occurs when insurers receive the same premium for everyone in an insured group. They try to attract only those with lower risks, whose expected medical costs would be less than the group's average premium. |
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Term
| Prepaid group practice (PGP) |
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Definition
| A type of practice where the providers are reimbursed a capitated amount per enrollee for a stipulated length of time. |
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Term
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Definition
| A drug that can be obtained only with a physician's prescription. |
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Term
| Prestige maximization goal |
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Definition
| Not-for-profit providers (hospitals and medical schools) whose pricing and investment behavior is directed so as to increase the prestige of the institution, rather than increase the rate of return on their investments. |
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Term
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Definition
| An indication of monopoly power by a provider. The provider is able to charge different purchasers different prices, according to the purchaser's elasticity of demand (willingness to pay) for the same or a similar service. |
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Term
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Definition
| Occurs when competing firms agree to set prices so as to increase profits. The competing firms act like a monopolist in that they use the industry demand curve, which is less price elastic, to establish their prices. Such actions are considered to be a per se violation of the antitrust law. |
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Term
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Definition
| The political support an organized group can offer to legislators, namely, campaign contributions, volunteer time, and votes. |
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Term
| Primary care physician (PHP) |
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Definition
| A physician that coordinates all of the routine medical care needs of an individual. Typically, this type of physician specializes in family practice, internal medicine, pediatrics, or obstetrics/gynecology. |
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Term
| Process measures of quality |
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Definition
| A type of quality assessment that evaluates the process of care by measuring the specific way in which care is provided or, with respect to health manpower, their training requirements. |
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Term
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Definition
| May be categorized into six types: demand-increasing, secure the highest method of payment, reduce the price and/or increase the quantity of complements, decrease the availability and/or increase the price of substitutes, and limit increases in supply. |
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Term
| Product market definition |
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Definition
| Used in antitrust cases to determine whether the product or service in question has close substitutes, which depends on the willingness of purchasers to use other services if their relative prices change. The closer the substitutes, the smaller the market share of the product being examined. |
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Term
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Definition
| Describes the technical relationship between combinations of inputs and the resulting output. |
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Term
| Production possibilities curve |
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Definition
| Shows the different combinations (trad-offs) of two different goods or outputs that can be produced with a fixed amount of resources. |
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Term
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Definition
| A prerequisite that requires health professionals, such as physicians, who want to practice to obtain a license from the government. |
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Term
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Definition
| This index measures the average change in prices received by producers for their products. These data are collected from producers based on the transaction prices of their goods and services. |
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Term
| Profit maximizing model of hospital behavior |
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Definition
| Not-for-profit hospitals act as though they tried to maximize profits by setting price at that point on their demand curve where marginal revenue equals marginal cost. Further, such hospitals would invest so as to receive the highest rate of return on their assets. Any "profits" generated would be internally invested rather than paid out to shareholders. |
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Term
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Definition
| A method of payment for medical services in which providers are paid based on a predetermined rate for the services rendered, regardless of the actual costs of care incurred. Medicare uses a prospective payment system for hospital care based on a fixed price per hospital admission (by diagnosis) |
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Term
| Public interest theory of government |
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Definition
| Assumes that legislation is enacted to serve the public interest. The two basic objectives of government according to this theory are to improve market efficiency and, based on a societal value judgment, redistribute income. |
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Term
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Definition
| The expected claims for an insured group, exclusive of the loading charge; the pure premium for an individual is calculated by multiplying the size of the loss by the probablity the loss will occur. |
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