I have learned an abundance of useful, interesting, and otherwise helpful stuff right here on the DKos. As a single-payer advocate who speaks a lot about the issue, I have come across my fair share of healthcare and healthcare policy related jargon, often slung about by "experts" in order to intimidate their adversaries.
So here, for your reading pleasure (and please fill the comments with amendments, additions, corrections, whatever moves you, it's all good and I am claiming no particular expertise here) is a glossary of some common terms and phrases you might hear while discussing the healthcare issue.
Every day is a school day...
This glossary is intended for the benefit of healthcare activists with an emphasis on single-payer healthcare financing, and is useful for healthcare activists of any bent, as many of the entries have more to do with the delivery of healthcare and not necessarily single-payer. Bold-type words appear defined elsewhere in the glossary. There is no particular order.
Socialized Medicine: a term generally applicable to healthcare systems in which the government handles most aspects, including the financing and delivery, of healthcare. All hospitals and clinics are run by the government, and even the training of healthcare professionals might be sponsored by the government in some way. Single-payer healthcare financing does not have anything to do directly with the delivery of healthcare or the training of professionals and thus does not fit this common definition. Single-payer is best described as socialized insurance where the public is insuring itself without any need for private insurance. This is not socialized medicine in any way, since medicine is all about delivery and not how it's being paid for. "Socialized medicine" is often used to conjure up images of government bureaucratic interference in medical care. This does not happen in countries with socialized insurance as doctors and patients have more clinical freedom than in the U.S. where private insurance bureaucrats attempt to direct care often against the advice of the doctor and the preferences of the patient.
Rescission: the act of rescinding (canceling) an insurance policy, which is becoming more common as insurers look to remove expensive patients from their roles. This is often accomplished by finding "errors and omissions" on a policy application. There is no attempt to find these problems while the client is healthy and paying premiums.
Community-rating: jargon for requiring that all consumers pay the same or similar premiums without regard to age, gender, or other factors. This, along with guarantee issue, has been implemented in several states in some way in an attempt to increase healthcare coverage. The exact opposite occurs as many people wait until they are sick to get insurance (see adverse selection). The net effect is that states see individual enrollments decrease, premiums rise, and insurers leave the state. One way to try to avoid this is with mandates.
Experience-rating: (or experience loss rating) Experience-rated insurance, like car insurance, requires people who are higher risks (smokers, diabetics, etc.) to pay higher premiums. This seems to make sense, except that genetic conditions, childhood diseases, accidents, injuries and income play a much larger role in people’s health than "controllable" lifestyle factors do. Community-rating is much fairer and removes the punitive aspect for factors beyond the control of an applicant.
Medical Underwriting: or health underwriting, again like car insurance, is the practice of basing insurance premium prices on the perceived health status of the applicant (based on indicators such as medical history, existing conditions, habits, and so forth). This practice is usually strictly regulated. Insurers claim it reduces premiums by keeping people who are already sick from obtaining insurance, while critics say it is used to prevent people with relatively benign conditions from being able to obtain insurance. Both views are accurate, and point out that private insurers aren't in business to provide healthcare (see rescission).
Guarantee Issue: jargon for requiring insurers to sell an individual health insurance policy without regard to the applicant’s health - in essence the removal of the "pre-existing condition" as a way to deny coverage. Private insurers won't guarantee issue unless there are no limits on premiums and all individuals are required to have insurance (see mandates).
Adverse Selection: The simplest way to think of this concept is that healthy people will tend to buy less health insurance than is appropriate. At its extreme, adverse selection leads people who perceive themselves to be at low risk to cancel or not renew their insurance. This leads to a further increase in price for the remaining enrollees, and hence the lowest remaining (perceived) risks cancel their insurance, leading to a further increase in price, and so on. Without employer-sponsored health insurance which automatically enrolls people who might otherwise forgo insurance, or mandates, adverse selection would cause the private insurance industry to collapse.
Mandates: or "mandated insurance" is a policy wherein all individuals are required by law to have health insurance coverage that meets minimum requirements. Employers are often also required to offer a minimum benefit under penalty of a fine (often the fine is less than the cost of the benefit). Non-compliant individuals may be fined unless they meet a means test, in which case their coverage might be partially or fully publicly funded. Mandates are welcomed by private insurers as a way to ameliorate adverse selection. Similar to auto insurance, mandates are ineffective unless the penalties are severe. Mandates also push more people into publicly subsidized coverage than can generally be supported because the overall system remains inefficient.
Moral Hazard: the concept that an individual will engage in more inappropriate behavior if the consequences for that behavior are somehow lessened. With regard to healthcare, the concept is applied to the idea that people will "over-utilize" the healthcare system if the perceived cost of doing so is lessened (the bulk of evidence does not support this). This is the primary argument used to support the idea of consumer-directed healthcare. Erecting financial barriers to healthcare has been shown to reduce as much necessary as unnecessary healthcare. It also requires that healthcare be viewed as a consumable (like potato chips); but healthcare is a necessity, not an option, and having people decide whether to visit the doctor based on cost has disastrous consequences as it forces them to be their own doctor. It is also used as an argument to support the allegation that single-payer systems must use "rationing". All healthcare systems must deal with finite resources. Single-payer is the best way to allocate resources in the most efficient, equitable, and effective way possible.
Pay for Performance: a policy that attempts to improve the quality of healthcare delivery by rewarding good performance (or penalizing poor performance). Critics of this idea point out that it provides yet another layer of bureaucracy to an already overburdened system and has scant evidence to support its effectiveness even though it sounds like a great idea.
Capitation and Fee-for-service: These are the two basic ways to pay providers for healthcare. With capitation the provider is paid a bulk amount based on the type (but not number) of services it provides and the number (but not type, although there may be regional, age, and other adjustments for this) of people it serves. Capitation has the advantage of minimizing paperwork for billing. Fee-for-service requires that every service be reimbursed individually, and although attempts are made at standardization the paperwork is still much greater.
Electronic Record-keeping: The term itself is self-explanatory, but its usage is more nuanced. It is often brought up as a way to reduce healthcare costs, yet there is no evidence for this, and some evidence supporting the opposite. What is true, however, is that it is important for improving the quality of healthcare delivery by reducing errors in prescription fills and drug interactions, and errors in communication between and within providers. Of course, this has little to do with electrons, and everything to do with accurate and timely communication.
Comparative Clinical Effectiveness Research: often abbreviated CER, is research and studies that attempt to produce evidence which will help improve our healthcare policy decisions. Some studies have demonstrated, for example, that the prevalence of expensive, high-tech excesses in our healthcare system provide no net healthcare benefit, and that higher quality and less expensive healthcare is delivered by systems that reinforce primary care infrastructure. Studies by RAND have demonstrated that those receiving the best care we have to offer are deprived of important services that they would be receiving in a high performance system.
Amenable Mortality: means deaths that could have theoretically been averted by good healthcare. In one recent report the US rated worst of nineteen OECD nations.
Medical Loss Ratio: (or medical losses) is the percent cost to private insurers that actually involves healthcare as opposed to their administrative, marketing, profits, shareholder dividends, and other overhead. This number is currently less than 80% of every dollar private insurers receive.
Risk pool: (or cost pool) refers to the group of individuals covered by a given healthcare plan (or plans). The larger the risk pool is, the less risk (and thus cost) will be carried by each individual in the pool. The other way to reduce risk (cost) is to eliminate the riskier (costlier) individuals from the pool. Both tactics - increasing the risk pool size through consolidation and removing costly individuals through rescission and other means - are very much in evidence in the private health insurance industry. In single-payer there is a single plan and a single risk pool that includes everybody, the most efficient and effective way to insure anything.
Medicare Parts A, B, C, and D: Medicare is a topic unto itself, but it is helpful to at least have a basic understanding of its various components as they relate to healthcare policy. Part A (hospital insurance, no additional premium for qualified individuals) and Part B (medical insurance for some items not covered in Part A and durable medical goods, a small premium) are often referred to as "traditional Medicare", as these form the original program signed into law on July 30, 1965. Part C came into being in 1997 as part of that year's Balanced Budget Act. Part C allows qualified Medicare recipients to buy private insurance plans (then called "Medicare+Choice", and now, with the addition of drug benefits "Medicare Advantage"). Traditional fee-for-service Medicare has a standard benefit package that covers medically necessary care from nearly any hospital or doctor in the country. For people who choose to enroll in an MA health plan, Medicare pays the private health plan a capitated rate. Members typically also pay a monthly premium in addition to the Part B premium to cover items not covered by traditional Medicare, such as prescription drugs, dental care, and vision care. These are typically managed care plans. MA plans are required to offer coverage that meets or exceeds the standards set by the original Medicare program. Enrollment in MA plans represents 19% of Medicare beneficiaries. Each year many individuals disenroll from MA plans. A recent study noted that about 20 percent of enrollees report that their most important reason for leaving was due to problems getting care. There is some evidence that disabled beneficiaries are more likely to experience multiple problems in managed care. Some studies have reported that older, poorer, and sicker persons have been less satisfied with the care they have received in MA plans. The Government Accountability Office reported that in 2006, the MA plans earned profits of 6.6%, had overhead of 10.1%, and had an 83.3% medical loss ratio. These administrative costs are far higher than traditional Medicare. MA plans cost Medicare 12 to 17% more than traditional Medicare plans, pointing out the obvious disadvantage of introducing privatization into a single-payer system. Part D is the currently much maligned prescription drug benefit (which was removed from traditional Medicare in 1989). The cost of the Part D benefit is much higher due to the restriction on Medicare to negotiate for bulk prices. This benefit is not standardized and is often part of an MA plan, causing complexity and massive confusion. There are also private insurance Medigap plans that attempt to supplement traditional Medicare.
Chronic Disease Management: another fairly self-explanatory term, sometimes offered up as a way to control healthcare costs. There is no evidence that such programs are successful in reducing or controlling healthcare costs.
Preventive Medical Care: (and wellness services) a self-explanatory phrase that is often touted as a means for reducing overall healthcare costs. There is no evidence to support this, and much that contradicts this claim. Evidence does support prevention as an overall benefit to health, as would be expected, but it does not reduce the overall costs of healthcare.
Exchange or Co-op: another bureaucracy that sits on top of an existing healthcare financing system and offers an easy way for individuals and businesses to "shop" for an insurance plan. In Massachusetts this is known as the "Connector" and adds about 4-5% of cost to the system. Exchanges are typically state-sponsored in some way (they will include public assistance plans, for example). The whole impetus behind this is to enlarge the risk pool, which should reduce costs. However, as long as competition exists outside of the exchange, or participation in the exchange is voluntary, they are doomed to failure through adverse selection, as has been witnessed in many co-ops in many states. States may enforces participation through mandates. The bureaucracy is also responsible for the risk adjustment necessary to make such exchanges possible.
Risk Adjustment: a critical component for insurance exchanges or co-ops, in which payments for individual plans are adjusted to reflect the risk (cost) based on the level of health of the enrollees in that plan. Without such adjustments insurers who take on a less healthy risk pool will fail.
Consumer-directed Healthcare: is a phrase used to describe any of many ways in which the financial responsibility for an individual's healthcare is made to reside with the individual as much as possible. As the term suggests, individuals are seen as consumers of healthcare and thus able to make their own decisions regarding what type and how much healthcare they want or need (or can afford), much like diners browsing a dinner menu. Proponents of consumer-directed healthcare argue that it makes individuals more responsible (less subject to moral hazard), and forces healthcare providers to respond to the consumers' choices (good for free markets). But healthcare is a completely unpredictable need, and individuals aren't very good self-diagnosticians (even doctors have doctors, after all) and are thus not really equipped to make price-driven choices about their healthcare. HSAs and MSAs are examples of an implementation of this concept.
HSAs and MSAs: Health Savings Accounts and Medical Savings Accounts are individual savings accounts from which medical expenses may be paid in exchange for a tax benefit. Once the account is depleted and a deductible is met, medical expenses are covered by a catastrophic plan, typically a managed care plan called a High Deductible Health Plan (HDHP) with a catastrophic limit (a maximum amount beyond which everything is covered). The allure of such plans to individuals is that payments from them are tax-deductible, although the deduction is only significant for wealthier taxpayers. Such plans will only attract healthier individuals since the out-of-pocket costs are large (to be expected from a high deductible plan). Individuals with such plans who become sick will typically find their accounts rapidly depleted and become burdened with large out-of-pocket expenses. Such plans also discourage preventive care and encourage self-diagnosis of medical conditions. The allure for the insurers is that coverage, and hence their cost, is minimal.
Managed Care Plan: refers to any healthcare plan that limits its reimbursement to a set of providers. Examples are Health Maintenance Organizations (HMO), Preferred Provider Organization (PPO), and Point of Service plans (POS), essentially a mix of HMO and PPO. All of these plans have a contracted "network" of providers. Using providers outside of this network will incur additional fees.
Public Option: A somewhat fuzzy policy concept that would allow people to buy government-sponsored health insurance that is in competition with private insurance, the selling points being that you can keep your current insurance ("if you like it") or buy into the "public option", and it keeps the private insurers "honest". In its simplest implementation people of any age would buy into Medicare or a version of Medicare in some way. This is not reflected in any of the current versions of reform bills under discussion. On the opposite end is a version that is severely reduced in scope and that would at most enroll around 10 to 12 million individuals. Most single-payer supporters view the public option as a losing proposition in virtually any form as it does nothing to address the fragmented system we now have, and that is fundamental to achieving real cost reductions and controls in our healthcare system. It is very possible that any "public option" that survives the congressional bill-writing process will be vastly different from the original vision of the supporters of this idea in which over 100 million individuals would be enrolled. From a single-payer advocate's perspective, any public option that can "crowd out" private insurers is probably a good thing.