DIFFERENT MEANINGS OF COST There are 3 different definitions of “cost” depending on one’s perspective: Consumer “Micro-perspective” The price of health care to include: Physician’s bill, Price of a prescription, or Premiums employers pay to purchase health insurance for their employees National (based on GDP) “Macro-perspective” How much a nation spends on delivering health care services Provider The cost of producing health care services to include: Staff salaries, Capital costs of buildings and equipment, Rental space, and Purchase of supplies

REASONS FOR COST ESCALATION Patients are not too concerned with the cost of health care because they only bear a fraction of the financial burden out of pocket Third-Party Payment Utilization of health care is driven by need rather than economic demand Imperfect Market New technology is expensive to develop Growth of Technology Elderly people consume more health care and life expectancy at birth has increased by over 30 years Increase in Elderly Population The medical model emphasizes medical interventions AFTER a person has become sick, which is more costly than promoting prevention and lifestyle behavior changes Medical Model Due to complexity, costs are often duplicated Multi-Payer System Tests and services that are not medically justified are performed by physicians to protect themselves against potential malpractice lawsuits (i.e. labor induction) Defensive Medicine Fraud, a knowing disregard of the truth, can be practiced by both health care providers and patients Waste & Abuse There are differences in practice patterns that are only associated with geographic areas of the country Practice Variations

ACCESS TO HEALTH CARE MEASURED BY TYPES DIMENSIONS Individual Level Indicators include: Measures of medical services utilization relative to enabling and predisposing factors while controlling for need for care Patient’s assessment of interaction with provider Health Plan Level Plan characteristics that affect enrollment Plan practices that affect access Plan quality as measured by HPEDIS1 Delivery System Level Indicators include ecological measures that affect populations rather than individuals Potential Access Refers to both health care system characteristics and enabling characteristics Realized Access The type, site, and purpose of health services Equitable/Inequitable Access Equitable: The distribution of health care services according to the patient’s self-perceived need Inequitable: Distribution of services according to enabling characteristics Effective & Efficient Access Linking access to quality of care can determine whether they are indicative of one another Availability The fit between service capacity and individuals’ requirements Accessibility The fit between the locations of providers and patients Accommodation The individuals’ ability to pay Affordability The fit between how resources are organized to provide services and the individual’s ability to use the arrangement Acceptability The compatibility between: patients’ attitudes about providers’ and practice characteristics, and providers’ attitudes toward their clients’ characteristics and values 1 Health Plan Employer Data and Information Set

THE DONABEDIAN MODEL Structure Process Outcomes Facilities Licensing Accreditation Equipment Staffing Levels Staff Qualifications  Licensure & Accreditation Training Delivery System Distribution of Hospital Beds and Physicians The stable characteristics of : The providers of care Their tools and resources Their physical and organizational settings Process Outcomes The specific way in which care is provided The effects or results obtained from utilizing the structure and processes of health care delivery Technical Aspects of Care Diagnosis Treatment Procedures Correct Prescriptions Accurate Drug Administration Pharmaceutical Care Waiting Time Cost Interpersonal Aspects of Care Communication Dignity and Respect Compassion and Concern Patient Satisfaction Health Status Recover Improvement Nosocomical Infections Iatrogenic Illnesses (Injuries) Rehospitalization Mortality Incidence and prevalence of disease