Health Care Terminology

Access refers to the ability of an individual to receive health care services when needed. In this context, need is primarily determined by the patient. It is secondarily determined by a referring physician, especially for higher-level services.

Activities of daily living is the term used in reference to the ability of an individual to perform six basic activities: eating, bathing, dressing, toileting, maintaining continence, and getting into or out of a bed or chair.

 Administrative costs are incidental to the delivery of health services. These costs are not only associated with the billing and collection of claims for services delivered but also include numerous other costs, such as time and effort incurred by employers for the selection of insurance carriers, costs incurred by insurance and managed care organizations to market their products, time and effort involved in the negotiation of rates, and resources used in the completion and maintenance of medical records.

Adult day care complements informal care provided at home by family members with professional services available in adult day care centers during the day.

Advance directives refer to the patient's wishes regarding continuation or withdrawal of treatment when the patient lacks decision-making capacity.

Adverse selection occurs when high-risk individuals enroll in comprehensive plans and, as the cost of premiums goes up, healthy individuals start dropping out. Eventually the plan is left with a disproportionate number of high-risk people.

An agent, one of the factors of the epidemiology triangle, must be present in order for an infectious disease to occur. In other words, an infectious disease cannot occur without an agent.

Allocative tool designates a use of health policy in which there is a direct provision of income, services, or goods to groups of individuals who usually reap benefits in receiving them.

Allopathy - A system of medicine based on the theory that successful therapy depends on creating a condition antagonistic to or incompatible with the condition to be treated. Thus drugs such as antibiotics are given to combat diseases caused by the organisms to which they are antagonistic. Allopathy is the predominant system in the United States, and its practitioners are Doctors of Medicine (MDs). This was previously referred to as homeopathy.

Alternative medicine refers to nontraditional approaches and includes the broad domain of all health care resources--other than those intrinsic to biomedicine--to which people have recourse. Examples include homeopathy, herbal formulas, use of other natural products as preventative and treatment agents, and acupuncture.

Antitrust refers to federal and state laws that make it illegal to form an integrated delivery system (IDS) primarily to stifle competition. Business practices prohibited or regulated by antitrust laws include price fixing, price discrimination, exclusive contracting arrangements, and mergers among competitors.

Average daily census refers to the average number of hospital beds occupied per day. This measure provides an estimate of the number of inpatients receiving care each day at a hospital.

Average length of stay (ALOS) is a measure of how many days a patient, on average, spends in the hospital. Hence, this measure, when applied to individuals or specific groups of patients, is an indicator of the severity of illness and resource use.

Balance bill refers to the leftover sum that a provider bills to the patient after insurance has only partially paid the charge that was initially billed.

Block grants consolidate funds from different categorical programs into one lump sum that is distributed to the states on a formula basis. It is a vehicle to allow states to prioritize services and funding.

Capitation is a payment mechanism in which all health care services are included under one set fee per covered individual, generally for an entire year. The fee covers all services an enrollee may need during the entire year.

Captive insurance company - An insurance company formed to underwrite (insure) the risks of its owner(s). Increasingly, hospitals and other health care providers are forming or buying their own insurance companies, either alone or with other providers.

Case management provides coordination and referral among a variety of health care services. The objective is to find the most appropriate setting to meet a patient's health care needs.

Case mix refers to the overall intensity of conditions requiring medical and nursing intervention. It is determined by an assessment of each patient's condition and an estimate of the actual amount of resources that the patient will need.

Catastrophic insurance - Insurance intended to protect against the cost of a catastrophic illness, with "catastrophic" defined as exceeding a predetermined cost. Catastrophic insurance comes into play above that cost, in supplement of other insurance, and pays all or a percentage of the cost above the specified amount. Synonym(s): major medical insurance.

A catastrophic plan is a high-deductible insurance plan that is not designed to cover routine and inexpensive services.

Categorical programs are public health insurance programs, each designed to benefit a certain category of people. Examples are Medicare for the elderly and certain disabled individuals, Medicaid for the indigent, the Defense Department's programs for active service people, and VA for former armed forces personnel.

Certified nurse midwives (CNMs) are registered nurses with additional training from a nurse-midwifery program in areas such as maternal and fetal procedures, maternity and child nursing, and patient assessment. They are certified by the American College of Certified Nurse Midwives to provide care for normal expectant mothers, and they refer abnormal high-risk patients to obstetricians or manage them jointly.

A chief of service, such as chief of cardiology, is in charge of each medical specialty in a hospital.

The chief of staff is the medical director of a hospital who supervises the medical staff.

Chiropractic - A system of medicine based on the theory that disease is caused by malfunction of the nerve system, and that normal function of the nerve system can be achieved by manipulation and other treatment of the structures of the body, primarily the spinal column. A practitioner is a chiropractor, Doctor of Chiropractic (DC).

Chiropractors provide treatment to patients through chiropractic (done by hand) manipulation, physiotherapy, and dietary counseling.
They typically help patients with neurological, muscular, and vascular disturbances. Chiropractic is based on the belief that the body is a self-healing organism.

A chronic condition is less severe than an acute condition but of long and continuous duration. The patient may not fully recover.

A closed panel (or closed-access) plan is one that does not permit enrollees to use providers outside the panel.

Coinsurance is the ratio of cost-sharing between the insurance plan and the insured.

Commercial insurance - In health care, usually any insurance for hospital or medical care other than that written by Blue Cross and Blue shield (BC/BS) (which, so long as they remain nonprofit organizations, are "noncommercial").

Community-oriented primary care (COPC) incorporates the elements of good primary care delivery and adds to this a population-based approach to identifying and addressing community health problems.

Community rating is a method for the determination of health insurance premiums that spreads the risk among members of a large community and establishes premiums based on the utilization experience of the whole community. For a set of benefits, the same rate applies to everyone regardless of age, gender, occupation, or any other indicator of health risk.

Consolidation refers to a concentration of control by a few organizations over other existing organizations through a consolidation of facility assets that already exist. Acquisitions, mergers, alliances, and formation of contractual networks are examples of consolidation.

Copayment is the proportion of total medical costs that the insured has to pay out of pocket each time health services are received.

Cost benefit analysis is used to evaluate benefits in relation to costs when both are expressed in dollar terms. Hence, cost benefit analysis is subject to a more rigorous quantitative analysis compared to cost-effectiveness analysis.

Cost effectiveness (or cost-efficiency) is a step beyond the determination of efficacy. Whereas efficacy is concerned only with the benefit to be derived from the use of technology, cost-effectiveness evaluates the additional (marginal) benefits to be derived in relation to the additional (marginal) costs to be incurred.

Cost-plus is a method of reimbursement in which total operating costs and certain allowable capital costs are included in arriving at the per diem rate.

When the amount of reimbursement from some payer source becomes inadequate, or when uncompensated services are rendered, providers resort to cost shifting by charging extra to payers who do not exercise strict cost controls. This has been the typical means for rendering uncompensated care to the uninsured.

Defensive medicine involves the use of services and maintenance of documentation that is done primarily to guard against the risk of malpractice lawsuits. These additional efforts do not generally add to the quality of services.

Demand-side rationing refers to barriers to obtaining health care faced by individuals who do not have sufficient income to pay for services or purchase health insurance.

Dental assistants work for dentists in the preparation, examination, and treatment of patients. While dental assistants do not have to be licensed to work, there are formal training programs available that offer a certificate or diploma.

Dental hygienists provide preventative dental car, including cleaning teeth and educating patients on proper dental care. Dental hygienists must be licensed to practice.

Dentists are the major providers of dental care and must be licensed to practice. Their major roles are to diagnose and treat dental problems related to the teeth, gums, and tissues of the mouth. Eight specialty areas are recognized by the American Dental Association: orthodontists (straightening teeth), oral and maxillofacial surgeons (operating on the mouth and jaws), pediatric dentistry (dentists for children), periodontics (treating gums), prosthodontics (making artificial teeth or dentures), endodontics (root canal therapy), public health dentistry (community dental health), and oral pathology (diseases of the mouth).

Deontology is an individualistic principle of ethics that underscores the individual's duty to do what is right, such as the mutual responsibilities of physicians and patients. Deontology does not place responsibility on society to provide health care services. The principle is used to support the concept of market justice.

Direct contract model is an organizational model for an HMO in which the HMO directly established contracts with a broad panel of community physicians and group practices without using an IPA as an intermediary.

Do-not-resuscitate orders (DNR orders) are and advance directive based on the premise that a patient may prefer to die than live when the quality of life available after cardiopulmonary resuscitation (CPR) is likely to be worse than before. In such circumstances, a patient has the right not to be resuscitated and to be allowed to die.

Durable medical equipment (DME) includes certain medical supplies and equipment, such as ostomy supplies, hospital beds, oxygen tanks, walkers, and wheelchairs.

A durable power of attorney for health care is a written legal document in which the patient appoints another individual to act as the patient's agent for purposes of health care decision making in the event that the patient is unable or unwilling to make such decisions.

Efficacy refers to the effectiveness of a medical procedure or intervention. If a product or service actually produces some health benefits, it can be considered efficacious or effective. Efficacy deals with questions such as the following: Is the current diagnosis satisfactory? What is the likelihood that a different procedure would result in a better diagnosis? If the problem is more accurately diagnosed, what is the likelihood of a better cure?

Emergent conditions require immediate medical attention; time delay is harmful to patient; and the disorder is acute and potentially threatening to life or function.

Enabling Services facilitate access when an individual already has health insurance coverage. Examples are transportation and translation services.

An Enrollee is an individual enrolled in a health plan and therefore entitled to receive health services the plan provides.

Enrollment brokers are outside contractors who work with Medicaid recipients and encourage them to join managed care plans.

An epidemic occurs when a large number of people get a specific disease from a common source.

An ethics committee is an interdisciplinary committee generally found in hospitals. The committee is responsible for developing guidelines and standards for ethical decision making in the provision of health care and for resolving issues related to medical ethics.

Experience rating is a method for the determination of health insurance premiums that is based on a group's own medical claims experience. Under this method, premiums differ from group to group because different groups have different risks.

Family Medical Leave Act (FMLA) - In 1993 Congress passed the Family Medical Leave Act which is codified at 29 U.S.C. The Act requires employers with 50 or more employees to provide the employee 12 weeks of leave per year for birth or adoption of a child, to care for a sick family member or leave for an employee with a serious health condition. The Act defines health condition as an "illness, injury, or impairment or physical or mental condition." The condition must involve either continuing treatment by a provider or inpatient care.

Fee-for-service (FFS) - A method of paying physicians and other health care providers in which each service (for example, a doctor's office visit or operation) carries a fee. The physician's income under this system is made up from the fees she collects for services. Alternative methods of income for physicians are: (1) a salary, such as one paid by a health maintenance organization (HMO); and (2) a capitation payment system, in which the physician is paid a predetermined amount for each patient for which she assumes responsibility (rather than each service she renders) during a given type of organization, for example, an HMO; in that case the capitation payment is made to the HMO, which in turn pays the physician in the manner decided by the HMO.

The GDP, or gross domestic product, is the total value of goods and services produced in a country. It is an indicator of total economic production.

Gag rules are clauses in managed care contracts that prohibit providers from speaking to patients about coverage, treatment options, and treatment determinations made by the plan.

Gaming - Attempting to manipulate "the system" in an illegal or unethical manner. The terms "gaming" and "to game the system" are used, for example, in connection with efforts to bill under the prospective payment system (PPS) in such a way as to maximize income by giving as the principal diagnosis that diagnosis which places the patient in the highest-priced Diagnosis Related Group (DRG), even though a lower-priced one more correctly reflects the patient's problem and the services rendered.

Gatekeeper - The person responsible for determining the services to be provided to a patient and coordinating the provision of the appropriate care. The purposes of the gatekeeper's function are: (1) to improve the quality of care by considering the whole patient, that is, all the patient's problems and other relevant factors; (2) to ensure that all necessary care is obtained; and (3) to reduce unnecessary care (and cost). When, as is often the case, the gatekeeper is a physician, she or he is a primary care physician and usually must, except in an emergency, give the first level of care to the patient before the patient is permitted to be seen by a secondary care physician. In fact, the gatekeeper must refer the patient for the secondary care. It has been suggested that the term "primary care manager (PCM)" replace the widely-used term "gatekeeper," but "gatekeeper" is likely to be retained.

Gatekeeping is the care coordination role of a primary care practitioner. It implies that patients do not visit specialists without referral from the primary care physician, who functions as the gatekeeper. It is not designed to be a controlling mechanism to deny people necessary care. It is designed to protect patients from unnecessary procedures and overtreatment.

A general hospital provides a variety of services, including general medicine, specialized medicine, general surgery, specialized surgery, and obstetrics, to meet the general medical needs of the community it serves. It provides diagnostic, treatment and surgical services for patients with a variety of medical conditions.

Generalists are physicians trained in family medicine/general practice, general internal medicine, and general pediatrics in the United States. They are considered primary care providers.

General liability insurance - Insurance which covers the risk of loss for most accidents and injuries to third parties (the insured and its employees are not covered) which arise from the actions or negligence of the insured, and for which the insured may have legal liability, except those injuries directly related to the provision of professional health care services (the latter risks are covered by professional liability insurance). General liability insurance will pay for slips and falls of visitors on hospital premises, for example.

German-style system - A regulated multipayer system of health care. In Germany, approximately 1200 nonprofit insurance plans, called Krankenkasse or "sickness funds," are organized by employers, labor unions, and professional groups. The plans are funded by equal payroll taxes on both employers and employees. Self-employed and wealthier employees may purchase private insurance. Funds are turned over to regional networks of physicians, who reimburse doctors in private practice, and to hospitals, who pay their staff physicians. Physician networks oversee their members' utilization. The government oversees fee negotiations which set global budgets, and also covers the poor and the unemployed.

Global budgeting - A limit on total health care spending for a given unit of population, taking into account all sources of funds. In health care reform discussions and proposals, it usually means that caps will be placed on (1) employers' expenditures, based on payroll, (2) individuals' expenditures for insurance, based on income, (3) institutional budgets' "core spending," and (4) personal out-of-pocket expenditures. Problem areas include how the information on total spending data is obtained or how the "cap" is enforced.

Gross domestic product (GDP) - The market value of all goods and services produced by labor and property within the U.S. during a particular period of time. Income from overseas operations of a domestic corporation would not be included in the GDP, but activities carried on within U.S. borders by a foreign company would be. The GDP measures how the U.S. economy is doing. In 1991, the GDP replaced the gross national product (GNP) to bring the U.S. into greater conformity with international measures of national income.

Group insurance is a policy obtained through an entity, such as an employer, a union, or a professional organization, that anticipates that a substantial number of people in the group will participate in purchasing insurance through that entity.

A group model HMO contracts with a multispecialty group practice, and separately with one or more hospitals, to provide comprehensive services to its members.

HIPCs are health insurance purchasing cooperatives. These organizations represent a number of employers and individuals to facilitate the buying of health insurance at rates negotiated with insurers. By consolidating their purchasing they are capable of achieving cost efficiencies.

Health - As defined by the World Health Organization (WHO), "the extent to which an individual or group is able, on the one hand, to develop aspirations and satisfy needs; and, on the other hand, to change or cope with the environment. Health is therefore seen as a resource for everyday life, not the objective of living; it is seen as a positive concept emphasizing social and personal resources, as well as physical capacities." In common usage, "health" often is used to refer to the condition of physical, mental, and social well-being, and is much like the word "quality" in that it is modified by adjectives in such phrases as "poor health," "good health," or "failing health." It is worth noting that increasing attention is being given to quality of life.

Health care delivery - A term sometimes used as a synonym for "comprehensive health care delivery system." However, the term "health care delivery" applies to providing any of the wide array of health care services as well as to the totality.

Health care delivery system - A term without specific definition, referring to all the facilities and services, along with methods for financing them, through which health care is provided.

Health Care Financing Administration (HCFA) - The division of the Department of Health and Human Services (DHHS) which administers the Medicare program, the Federal part of the Medicaid program, and related quality assurance activities.

Health Maintenance Act of 1990 - The model act developed by the National Association of Insurance Commissioners (NAIC) which has been used by most states as a pattern for their health maintenance organization (HMO) legislation. The model act requires the HMO to have a certificate of authority to do business in the state and requires detailed information to be provided to the state, including the HMO's financial status and quality assurance programs.

Health maintenance organization (HMO) - A health care providing organization which ordinarily has a closed group ("panel") of physicians (and sometimes other health care professionals), along with either its own hospital or allocated beds in one or more hospitals. Individuals (usually families) "join" an HMO, which agrees to provide "all" the medical and hospital care they need, for a fixed, predetermined fee. Actually, each subscriber is under a contract stipulating the limits of the service (not "all" the care needed). Such a contract is called a risk contract and the HMO is therefore called a "risk contractor."

Healthy People 2000 - A report published by the Public Health Service (PHS) in 1990 outlining health promotion and disease prevention goals for Americans for the year 2000. The report states that meeting the goals requires acceptance of shared responsibilities by citizens, health professionals, government at all levels, the media, and communities. The goals included such specifics as an increased life span accompanied by a high quality of life (QOL) factor, improve the health of populations now deemed to be particularly disadvantaged, and to provide all Americans with preventive services.

Health policy refers to public policy that pertains to or influences the pursuit of health.

Hill-Burton Act - Federal legislation resulting in post-World War II federal program of financial assistance for the construction and renovation of hospitals and other health care facilities. The intent was to increase the number of hospital beds in poor or underserved communities of the United States. The Hill-Burton Act also required that community hospitals receiving support under this program provide reasonable medical services to all people living in the hospital's service area, regardless of their ability to pay. The Department of Health and Human Services (DHHS) issued regulations that established standards for uncompensated care and specified that the care provided to Medicare and Medicaid patients was not considered uncompensated care.

Holistic health emphasizes the well-being of every aspect of what makes a person whole and complete.

Holistic medicine seeks to treat the individual as a whole person.

Home health agency (HHA) - Essentially the same as a home health care program in that it provides medical and other health services in the patient's home. Unlike the home care program, which provides services itself, the home health agency has the option of arranging the services by contracting with others. The term "home health agency" is applied to both nonprofit and proprietary bodies.

Home health care includes various types of services that are brought to the patients in their own homes. Such patients are generally unable to leave their homes safely to get the care they need.

Homeopathy - A system of medicine based on the theory that diseases should be combatted (1) by giving drugs which, in healthy persons, can produce the same symptoms from which the patient is suffering, and (2) by giving these drugs in minute doses.

Homophobia refers to a prejudice, fear, and/or hatred of gays and lesbians. Homophobia explains the initial slow policy response to the HIV epidemic. Historically, homophobia has been supported by powerful social institutions such as religious institutions, the law, the medical profession, and the media.

Hospice refers to a cluster of comprehensive services that address the special needs of the dying persons and their families. It blends medical, spiritual, legal, financial, and family-support services. Services are taken to patients and their families wherever they happen to be located.

Hospital Health Plan (HHP) - A specific model of physician-hospital organization (PHO) whose managed care plan (MCP) is emerging as an alternative to the typical health maintenance organization (HMO). To the extent that groups and members of the community work with the hospital and physicians in a collaborative effort to create the plan, it is better called a "community health plan." The model was developed by Richard Ya Deau, MD, in 1984. HHPs are established with the assistance of Hospital Health Plan Corporation (HHPC). To use the title Hospital Health Plan, which is copyrighted by HHPC, a plan must have certain attributes.

A host, one of the factors of the epidemiology triangle, is an organism, generally a human, who receives the agent. The host is the organism that becomes sick.

Iatrogenic illnesses (or injuries) are caused by the process or health care

Illness is recognized by means of a person's own perceptions and evaluation of how he or she feels. For example, an individual may feel pain, discomfort, weakness, depression, or anxiety, but a disease may or may not be present.

Incidence counts the number of new cases occurring in the population at risk within a certain time period, such as a month or a year.

An indemnity plan provides reimbursement to the insured without regard to the expenses actually incurred.

An independent practice association (IPA) is a legal entity representing a large number of physicians that is organized for the purpose of establishing contracts with HMOs.

Informed consent is a fundamental patient right. As long as a patient has some capacity to understand the information being given, no treatment or procedure will be performed, or medication given without the consent of the patient.

Instrumental activities of daily living are used in reference to a person's ability to perform activities that are necessary for living independently in the community, such as preparing meals, shopping for routine items, managing money and housekeeping.

An integrated delivery system may be defined as a network of organizations that provides or arranges to provide a coordinated continuum of services to a defined population and is willing to be held clinically and fiscally accountable for the outcomes and health status of the population serviced.

The IPA model is an organizational arrangement in which an HMO contracts with an independent practice association for the delivery of physician services.

Joint Commission on Accreditation of Healthcare Organizations (JCAHO) - An independent, nonprofit, voluntary organization sponsored by the American College of Physicians (ACP), the American College of Surgeons (ACS), the American Hospital Association (AHA), the American Medical Association (AMA), and other medical, dental, and health care organizations. JCAHO develops standards and provides accreditation surveys and certification to hospitals and to other health care organizations.

A joint venture results when two or more institutions share resources to create a new organization to pursue a common purpose.

Knowledge asymmetry - The situation which exists when two individuals are attempting to come to a decision and the amount of information each has on the subject is very different. For example, until recent developments, physicians have had far more information on diseases and their treatment than patients, and attempts to empower patients to participate in decision making on their own care have been largely futile.

Length of stay (LOS) - The number of days between a patient's admission and discharge. The day of admission is counted as a day, while the day of discharge is not. This abbreviation is often misused when the intent is to refer to average length of stay (ALOS).

Licensed practical nurses, called licensed vocational nurses in some states, care for patients under the direction of physicians and registered nurses. They must complete a state-approved program in practical nursing and a national written examination.

A living will is an advance directive in the form of an explicit statement, generally written, by a competent adult making it clear that he or she does not wish life-sustaining measures to be used in the event of hopeless illness.

Local health department - A unit of local government which is the action arm of national and state public health agencies. It typically carries out some clinical services, environmental services, and support services. Clinical services may include, for example, dental health, occupational health, nursing, maternal and child health, family planning, communicable disease, and Women, Infants and Children's Programs (WIC). Environmental services may include general environment, vector control, animal control, and pollution control. Support services may include, in addition to administration, vital statistics, laboratory, and health education.

Long-term care (LTC) - Care for patients, regardless of age, who have chronic diseases or disabilities, and who require preventive, diagnostic, therapeutic, and supportive services over long periods of time. LTC may call on a variety of health care professionals (such as physicians, nurses, physical therapists, and social workers) as well as non-professionals (family, others) and may be delivered in a health care or other institution or in the home.

Major medical insurance was originally designed to cover catastrophic situations that could subject the insured to substantial financial hardships, such as hospitalization, extended illness, and expensive surgery. Currently, major medical coverage is all-inclusive comprehensive coverage. It is no longer limited to a single type of expense but applies broadly to almost all types of medical care.

Maldistribution refers to either a surplus or a shortage of the type of health providers (typically physicians) needed to maintain the health status of a given population at an optimum level. Maldistribution can occur both geographically and by specialty.

Managed care - Any arrangement for health care in which someone is interposed between the patient and physician and has authority to place restraints on how and from whom the patient may obtain medical and health services, and what services are to be provided in a given situation.

Means test is the determination of eligibility for a publicly financed program on the basis of an applicant's income and assets (means).

Medicaid - The federal program which provides health care to indigent and medically indigent persons. While partially federally funded, the Medicaid program is administered by the states, in contrast with Medicare, which is federally funded and administered at the federal level by the Health Care Financing Administration (HCFA). The Medicaid program was established in 1965 by amendment to the Social Security Act, under a provision entitled "Title XIX- Medical Assistance."

The medical model of health care delivery presupposes the existence of sickness. In other words, health care is delivered only when a person is sick. The model emphasizes diagnosis and treatment of disease as opposed to health promotion and disease prevention.

Medical record - A file kept for each patient, maintained by the hospital (physicians also maintain medical records in their own practices), which documents the patient's problems, diagnostic procedures, treatment, and outcome. Related documents, such as written consent for surgery and other procedures, are also included in the record.

Medical savings account (MSA) - A proposed mechanism for helping an individual provide funds for health care. It would be a savings account set up for an individual under regulations and tax treatment similar to an individual retirement (IRA). The cash in the account would be available to pay for deductibles, copayments, and services not provided by the holder's insurance. The individual owning the MSA could keep any money not spent for health care. The theory is that this incentive would reduce unnecessary utilization. At present, employer contributions to MSAs are considered taxable income to the individual, while employer contributions for health insurance are not taxable income. Sometimes called a "medical IRA."

The Medical waiver program enables states to design packages of services targeted at specific populations, such as the elderly, the disabled, and those who test HIV positive. The waiver is an alternative to some form of institutional care.

Medicare - The federal program which provides health care to persons 65 years of age and older and to others entitled to Social Security benefits. Medicare is administered at the federal level, as contrasted with Medicaid, which is administered by the states. Medicare was established in 1965 by amendment to the Social Security Act (Public Law 89-97), the pertinent section of the amendment being "Title XVIII-Health Insurance for the Aged."

Medicare, Part A - The hospital care portion (Hospital Insurance Program (HI) of Medicare. Individuals who (1) are age 65 and over and who qualify for the Social Security "Old Age, Survivors, Disability and Health Insurance Program" or who are entitled to railroad retirement benefits; (2) are under age 65 but have been eligible for disability for more than two years; or (3) enrolled in Part A of Medicare. In 1994, slightly over 32 million elderly and 4 million disabled Americans were eligible under Part A of Medicare. However, only about 7 million elderly and 1 million disabled actually received services that were reimbursed under this program. Synonym(s): Hospital Insurance Program (HI).

Medicare, Part B - The part of Medicare through which persons entitled to Medicare, Part A, the Hospital Insurance Program, may obtain assistance with payment for physicians' services, diagnostic tests, and other outpatient services. Individuals participate voluntarily through enrollment and the payment of monthly fee. In 1994, slightly under 32 million elderly and 4 million disabled Americans were enrolled under Part B of Medicare. In contrast to Part A, however, most of these enrollees (26.7 and 3 million, respectively) actually received Part B reimbursable services in 1994.

Medicine (system) - A system of diagnosis, and particularly treatment, based upon a specific theory of disease and healing.

Medigap is a private insurance policy purchased by many of the elderly to pay for expenses not covered by Medicare.

The mental health system in the United States is composed of two subsystems, one primarily for individuals with insurance coverage or money and one for those without. Patients without insurance coverage or personal financial resources are primarily treated in state and county mental health hospitals, or in community mental health clinics. Patients with insurance coverage or the personal ability to pay receive care from both inpatient and ambulatory mental health care systems.

A merger involves the unification of two or more organizations into a single entity through mutual agreement.

Mixed model is an organizational arrangement in which an HMO cannot be categorized neatly into a single model type because it features some combination of large medical group practices, small medical group practices, and independent practitioners, most of whom have contracts with a number of managed care organizations (MCOs).

Moral hazard - A term deriving from the fire insurance industry describing the phenomenon that insured buildings are more likely to burn than uninsured ones. This has significance for the health care industry since the same phenomenon applies to utilization of health care benefit - patients are more likely to use a service if they pay for it with "somebody else's money (SEM)." Any delivery system with a high moral hazard component is likely to cost more because there is no incentive built into the system to encourage the reduction of costs.

Morbidity means disease or disability.

Mortality is the term used in the measurement of death rates.

An MSA is a tax-free savings account coupled with a high-deductible catastrophic health insurance plan

National health expenditures (NHE) - An economic indicator to show what the United States spends on health care each year. It is usually expressed as a percentage of the gross domestic product (GDP). The NHE is the sum total of all health care expenditures, including physician and hospital services, drugs, home nursing care, eyeglasses, dental services, and so forth, as well as administrative costs, construction, and research. The NHE for 1993 was $940 billion, equal to about 14% of the GDP.

National health insurance is a tax-supported health plan that ensures universal access. Services are financed by the government but are rendered by private providers.

National health system is also a tax-supported health plan that ensures universal access, but in this case the government also controls the service infrastructure.

Naturopathy - The system of medicine where only natural medicines are used. Examples are manual manipulation, using food science and nutrition, hygiene and immunization. Of the four naturopathic medicine schools in the U.S., two are located in the states of Washington and Oregon, which are also two of the only seven states that currently license naturopathic physicians.

Under the network model, the HMO contracts with more than one medical group practice.

Nonphysician practitioners (NPPs) are providers who practice in many areas similar to those in which physicians practice, but they do not have a doctoral degree. NPPs are sometimes called midlevel practitioners because they receive less advanced training than physicians but more training than registered nurses. They are also referred to as physician extenders because in the delivery of primary care they can, in many instances, substitute for physicians. NPPs typically include physician assistants (PAs), nurse practitioners (NPs), and certified nurse midwives (CNMs).

Nonprofit - An entity whose profits (excess of income over expenses) are used for its own purposes rather than returned to its members (shareholders, investors, and owners) as dividends. To qualify for tax exemption, no portion of the profits of the entity may "inure" to the benefit of an individual. See inurement. "Nonprofit" does not necessarily mean "tax-exempt."

Nursing home - An institution which provides continuous nursing and other services to patients who are not acutely ill, but who need nursing and personal services as inpatients. A nursing home has permanent facilities and an organized professional staff.

Nurse practitioners, also called advanced practice nurses (APNs)

Academic nursing home - A nursing home affiliated with or operated by an institution providing medical residency training, with goals of research and the education of health care professionals in addition to the provision of patient care. The education programs may include medicine, nursing, social work, psychology, speech pathology, audiology, pharmacy, gerodentistry, occupational therapy, and other disciplines.

Omnibus Budget Reconciliation Act of 1989 (OBRA 89) - A federal act which, among other things, called for significant physician payment reform and increased funding for effectiveness research.

An open-panel (or open-access) plan allows access to providers outside the panel, but some conditions apply.

Optometrists provide vision care, including examination, diagnosis, and correction of vision problems. They must be licensed to practice.

Orphan diseases are uncommon illnesses that afflict a limited number of people.

Osteopathy - A system of medicine which emphasizes the theory that the body can make its own remedies, given normal structural relationships, environmental conditions, and nutrition. It differs from allopathy primarily in its greater attention to body mechanics and manipulative methods in diagnosis and therapy. Osteopathy is second to allopathy in number of practitioners in the United States. Osteopathic physicians are granted the Doctor of Osteopathy (DO) degree (note that an "OD" is not an "osteopathic doctor," but an optometrist, an "optometric doctor").

An outcome is the end result obtained from utilizing the structure and processes of health care delivery. Outcomes are often viewed as the bottom-line measure of the effectiveness of the health care delivery system.

Outlier - A patient who requires an unusually long stay or whose stay generates unusually great cost. The term is used in the prospective payment system (PPS). About five or six percent of the budgets for regional and national rates have been set aside for payments for outliers. Outliers provide an escape hatch for the hospital, because they allow the hospital to negotiate for a fee higher than the Diagnosis Related Group (DRG) price which would otherwise apply to the patient. Outliers are of two kinds:

Cost outlier - An unusually costly case.

day outlier - See stay outlier

Stay outlier - An unusually long stay. Also called day outlier.

Outpatient services include any health care services that are not provided on the basis of an overnight stay in which room and board costs are incurred. The term is synonymous with "ambulatory care."

A PHO (physician-hospital organization) is a legal entity that allows a hospital and its physicians to negotiate with MCOs or, if a PHO is large enough, to contract their services directly to employers

A PPO is a type of managed care organization that has a panel of preferred providers who are paid according to a discounted fee schedule. The enrollees do have the option to go to out-of-network providers at a higher level of cost sharing.

A panel is composed of physicians who have formal affiliations with a MCO.

Peer review - Review by individuals from the same discipline and with essentially equal qualifications (peers). "Peer review" usually means review of the performance of a physician, done by other physicians, although it applies to such activity within any discipline. Peer review sometimes leads to reduction or denial of privileges of a physician (or other professional) whose performance is reviewed. It is therefore especially important that the process be done fairly and in good faith to avoid legal liability.

"Peer review" sometimes has a narrower meaning, which can be determined only after careful listening and asking: (1) some use the term only for review conducted by a group of physicians appointed by a medical society; (2) some use it as a synonym for a patient care audit; and (3) some connection with review of research projects funded by the National Institutes of Health (NIH)

Peer Review Organization (PRO) - An organization set up by the 1982 Tax and Fiscal Responsibility Act (TEFRA) as a part of the prospective payment system (PPS) to carry out certain review functions under contract from the Health Care Financing Administration (HCFA). PROs are external to the hospital; some were formerly Professional Standards Review Organizations (PSROs) and the functions of PROs are similar to those performed by PSROs. PROs are sometimes referred to as "Professional Review Organizations."

Personal health expenditures are the expenditures remaining after expenditures for research and construction, administrative expenses incurred in health insurance programs, and costs of government public health activities have been subtracted from national health expenditures. These expenditures are for services and goods related directly to patient care.

A pesthouse was operated by local governments, during the 18^th and mid-19^th centuries, to quarantine people who contracted a contagious disease such as cholera, smallpox, or typhoid. The primary function of a pesthouse was to protect the community from the spread of contagious disease; medical care was only secondary.

Phantom providers are practitioners who generally function in an adjunct capacity. The patient does not receive direct services separately, and the patients often wonder why they have been billed. Examples include anesthesiologists, radiologists, and pathologists.

Pharmacists dispense medicines prescribed by physicians, dentists, and podiatrists and provide consultation on the proper selection and use of medicines. All states require a license to practice pharmacy. The role of pharmacists has expanded over the last two decades to include drug product education and serving as experts on specific drugs, drug interactions, and generic drug substitution.

Physician assistants (PAs) work in a dependent relationship with a supervising physician to provide comprehensive care. PAs assist physicians in the provision of care to patients. The major services provided by PAs include evaluation, monitoring, diagnostics, therapeutics, counseling, and referral.

Play-or-pay is a health care reform approach that builds on the existing system of providing insurance through employers. All employers would be required to either provide health insurance for employees and their dependents or pay into a public fund that would be used to subsidize the costs associated with individually purchased health insurance.

Podiatrists treat patients with diseases or deformities of the feet, including performing surgical operations, prescribing medications and corrective devices, and administering physiotherapy. They must be licensed to practice.

Point-of-enrollment (POE) - Selection made by a managed care plan enrollee, at the time of enrollment, to choose either (1) a lower- priced option, but one which requires the enrollee to use only providers of her/his choice, whether in-plan or out-of-plan. There are many variations on these options.

Point-of-sale (POS) - An information system in which the details about a transaction are picked up electronically, coincidentally with the transaction, and are used as input to an integrated computer system which transmits the details of the transaction to the places in the organization where they are needed and automatically records them.

The supermarket provides an illustration. Items for sale often carry "bar codes" which tell exactly what the item is, the quantity being purchased, and the price. At the checkout counter, an optical reader scans the bar code and picks up this information, which is "simultaneously" shown to the customer on the cash register display, is used in producing the customer's adding machine tape (often showing the item and quantity as well as the charge made for it), adding the dollar amount to the day's sales total, and subtracting the amount of goods sold from the inventory for the item, so that reordering is systematized.

Similar applications are appearing in hospitals, which increase efficiency, decrease cost, and protect patients. For example, in the hospital pharmacy, as a prescription is dispensed for a given patient, the transaction is transmitted to an electronic medication file, where all drugs being given that patient are recorded. Here the newest prescription is checked (1) to see that the dosage is within the normal range for the drug (this is primarily a safeguard against clerical errors in the prescription) and (2) to see that the new drug is not incompatible with other drugs the patient is already receiving. A warning is issued automatically if there is a problem in either regard. At the same time, a charge for the prescription is made to the patient's bill, a notation is made for the medical record, the nursing station is informed, and the inventory of the pharmacy is adjusted.

Point-of-service (POS) - Selection of a provider by a managed care plan enrollee at the time (and each time) the care is needed. The entire plan may be designed as point-of-service, or the option may be offered to enrollees, usually for a higher premium and/or copay amount. Most managed care plans require the enrollee to use only in-plan physicians and other providers, except in emergencies or when out of the service area. With POS, the provider need not be a participant with the plan; an enrollee may select in-plan or out-of-plan providers. A plan not allowing the POS option is referred to a point-of-enrollment plan.

Effective in October 1995, health care plans which accept Medicare risk contracts must offer each beneficiary a POS option under which the plan retains responsibility for the care provided, even though the service is not given by a provider who is under contract with the plan. POS plans are also known as "open-ended HMOs."

Prevalence measures the total number of cases (of death, disability, or disease) at a specific point in time in the population at risk.

Primary care is basic and routine care delivered by a general practitioner. In a managed care system, the primary care physician also makes the determination for the need for higher-level services.

Primary health care is essential health care that constitutes the first level of contact by a patient with the health delivery system and the first element of a continuing health care process.

Primary prevention refers to actions designed to reduce the odds that a disease will subsequently develop. Its objective is to restrain the development of a disease or negative health condition before it occurs. Smoking cessation, prenatal care, hand washing, and refrigeration of foods are examples of primary prevention.

A propriety hospital--also referred to as an investor-owned hospital--is a for-profit hospital owned by individuals, a partnership, or a corporation.

Prospective payment - A term often used as a misnomer for prospective pricing. "Prospective pricing" is the term which more accurately denotes the intent of the payment system currently being used for Medicare.

Prospective Payment Assessment Commission (ProPac) - An advisory body established under Medicare to give advice and assistance to the Health Care Financing Administration (HCFA) on matters pertaining to the prospective payment system (PPS) under which Medicare operates.

Prospective payment system (PPS) - The name given the system currently in use for paying services for Medicare patients (payment for patients "by Diagnosis Related Groups (DRGs)").

Prospective pricing - Setting (or agreeing upon) prices in advance for the furnishing of a product or service. This is in direct contrast with the concept of reimbursement, in which the service or product is provided first, and then the provider is paid whatever it cost. The prospective payment system (PPS) adopted for Medicare, and applied also for other payers, is the most widespread example of prospective pricing.

Prospective reimbursement uses certain preestablished criteria to determine in advance the amount of reimbursement.

A provider can be an individual health care professional, a group, or an institution that delivers health care services and receives reimbursement directly for those services. A registered nurse who is employed by a hospital is not a provider since his or her services cannot be billed for reimbursement. The same registered nurse working as a nurse practitioner in private could be a provider if he or she can bill for services.

Psychologists provide patients with mental health care. They must be licensed or certified to practice. Psychologists may specialize in a number of areas such as clinical, counseling, developmental, educational, engineering, personnel, experimental, industrial, psychometric, rehabilitation, school, and social domains.

Public health deals with broad societal concerns about ensuring conditions that promote optimum health for society as a whole but influencing the social, economic, political, and medical care factors that affect health and illness. The objective of public health is to prevent disease, prolong life, and promote health through organized community effort.

A public hospital is owned by an agency of the federal, state, or local government.

Public policies are authoritative decisions made in the legislative, executive, or judicial branches of government that are intended to direct or influence the actions, behaviors, or decisions of others.

Quality has been defined as the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.

Quality assessment (QA) - The former name for the activity later called quality assurance. Current terminology has, in turn, replaced "quality assurance" with "quality management."

Quality assurance (QA) - The efforts to determine the quality of care (find out the quality being provided), to develop and maintain programs to keep it at an acceptable level (quality control), and to institute improvements when the opportunity arises or the care does not meet the desired standard of care (medical) (quality improvement).

The term "quality assurance" is being replaced by "quality management." The advantages of the term "quality management" are: (1) there is no implication of a "guarantee," an idea which may be suggested by the use of the word "assurance," which is sometimes used as a synonym for "insurance"; and (2) "quality management" is more accurate, since the achievement of quality depends on people carrying out their responsibilities without error, and getting people to perform is the task of management.

Quality control (QC) - The sum of all the activities which prevent unwanted change in quality. In the health care setting, quality control requires a repeated series of feedback loops which monitor and evaluate the care of the individual patient (and other systems in the health care process). These feedback loops involve checking the care being delivered against standards of care, the identification of any problems or opportunities for improvement, and prompt corrective action, so that the quality is maintained.

Quality improvement (QI) - The sum of all the activities which create desired change in quality. In the health care setting, quality improvement requires a feedback loop which involves the identification of patterns of the care of patients (or of the performance of other systems involved in care), the analysis of those patterns in order to identify opportunities for improvement (or instances of departure from standards of care) and then action to improve the quality of care for future patients. An effective quality improvement system results in stepwise increases in quality of care. Quality control, with which quality improvement is sometimes confused, is the sum of all the activities which prevent unwanted change in quality.

The quality improvement committee is responsible for overseeing the program for continuous quality improvement.

Quality of life refers to overall satisfaction with life during and following a person's encounter with the health delivery system. Some of the life domains germane to quality of life are comfort factors, security, degree of independence, decision-making autonomy, and attention to personal preferences.

Continuous quality improvement (CQI) - As used in health care today, CQI means the application of industrial quality management theory proposed by Deming and Joseph M. Juran. While traditional "quality control" theories seek out "fault" and attempt improvement by exhorting people to change their behavior, continuous improvement seeks to understand processes and revise them on the basis of data about the processes themselves. CQI sees "problems" as opportunities for improvement. The CQI process involves a project-by-project approach to systematically improve quality, not just to maintain the status quo. A major project in this area is the National Demonstration Project on Quality Improvement in Health Care, sponsored by a grant from the John A. Hartford Foundation, being conducted by Harvard Community Health Plan in Brookline, Massachusetts, in conjunction with the Juran Institute (a quality consulting and education firm in Wilton, Connecticut).

Registered nurses (RNs) are the major caregivers of sick and injured patients, serving their physical, mental, and emotional needs. All states require nurses to be licensed in order to practice. An RN must complete an associate's degree (AND), a diploma program, or a baccalaureate degree (BSN).

Regulatory tool designate a use of health policy in which the government prescribes and controls the behavior of a particular target group by monitoring the group and posing sanctions if it fails to comply.

A rehabilitation hospital specializes in providing restorative services to rehabilitate chronically ill and disabled individuals to a maximum level of functioning.

Reimbursement - The payment to a hospital or other provider, after the fact, of an amount equal to the provider's expenses in providing a given service or product. The current trend is away from such a "blank check" approach and toward prospective pricing, that is, toward agreement in advance as to the amount which will be paid for the service or product in question. Several varieties of reimbursement are discussed in health care.

Cost-based reimbursement - Payment of all allowable costs incurred in the provision of care. The term "allowable" refers to the terms of the contract under which care is furnished.

Prospective reimbursement - A term sometimes used, incorrectly, instead of prospective pricing or prospective payment. See prospective payment system (PPS). Also, "prospective reimbursement" is sometimes used to describe the prospectively estimated amount to be paid a hospital on a current schedule so that it will have operating cash, with the understanding that adjustments will be made later in the light of actual operating cost data. The concept is similar to that of the periodic interim payment (PIP).

Retroactive reimbursement - Additional payment to a provider for cost not considered at the time of original reimbursement.

Retrospective reimbursement - Payment based on actual costs as determined at the end of the fiscal period.

Third party reimbursement (TPR) - Payment for health care services by a third party such as an insurance company.

Reinsurance is a mechanism whereby an insurer can cover high-risk losses through insurance from another insurer. For example, self-insured employers generally protect themselves against the risk of high losses by purchasing reinsurance from a private insurance company.

Risk rating means that high-risk individuals will pay more than the average premium price.

Risk selection is the skimming of healthy people by a health plan to enroll into the plan.

A rural hospital is located in a county that is not part of a metropolitan statistical area.

Secondary care includes routine hospitalization, routine surgery, and specialized outpatient care such as consultation with specialists. Compared to primary care, these services are usually short term in nature and more complex, involving advanced diagnostic and therapeutic procedures.

A service plan provides specified services to the insured. The plan pays the hospital or physician directly, except for the deductible and copayments for which the insured is responsible.

A short-term hospital is one in which the average length of stay is less than 30 days.

Single payer is the health care reform approach that comes closest to resembling the Canadian system. All persons would be insured by the same payer, either by the government directly or by the government through a third party. Eligibility for insurance would be based on citizenship and/or legal status, not employment or income.

Single-payer system refers to a system in which there is a single payer as opposed to multiple payers. The single payer is generally the government, as is the case in a national health insurance program.

In a Socialized health insurance (Sl) system, such as in Germany, health care is financed through government-mandated contributions by employers and employees. Health care is delivered by private providers.

Specialists must seek certification in a specialty area, which often requires additional years of advanced residency training followed by several years of practice in the specialty. A specialty board examination is often required as the final step for becoming a board-certified specialist. Common specialties include anesthesiology, cardiology, dermatology, family medicine, internal medicine, neurology, obstetrics and gynecology, ophthalmology, pathology, pediatrics, psychiatry, radiology, and surgery.

A specialty hospital admits only certain types of patients or those with specified illnesses or conditions. Examples include psychiatric hospitals, rehabilitation hospitals, tuberculosis hospitals, and children's hospitals.

A staff model HMO employs its own salaried physicians.

Stop-loss is the maximum out-of-pocket liability an insured incurs in a given year. The plan pays 100 percent of expenses beyond the stop-loss limit.

Surgi-centers are free-standing ambulatory surgery centers independent of hospitals. They usually provide a full range of services for the types of surgery that can be performed on an outpatient basis and that do not require overnight hospitalization.

TQM stands for total quality management and is synonymous with continuous quality improvement (CQI). It is an integrative management concept of continuously improving the quality of delivered goods and services through the participation of all level and functions of the organization to meet the needs and expectations of the customer.

A teaching hospital is a hospital with an approved residency program for physicians.

Tertiary care constitutes the most complex level of care. Typically, tertiary care is institution based, highly specialized, and highly technological. Examples include burn treatment, transplantation, and coronary artery bypass surgery.

Third-party administrators (TPA) process and pay claims on behalf of self-insured employers. The TPA may also monitor utilization and perform other oversight functions.

Underutilization occurs when providers withhold necessary services due to cost constraints.

Underwriting is a systematic technique for evaluating, selecting (or rejecting), classifying, and rating risks.

Universal access means that all citizens have access to at least a basic package of health care services.

An urban hospital is defined as one located in a county that is part of a metropolitan statistical area.

Urgent conditions require medical attention within a few hours; a longer delay presents possible danger to the patient; and the disorder is acute but not necessarily severe.

Urgi-centers are community-based free-standing clinics open 24 hours a day, seven days a week. These emergency centers, however, are generally not equipped to serve truly emergent patients or to receive ambulance cases.

Utilization refers to the quantity of health care consumed.

The utilization review committee evaluates the appropriateness of admissions and length of stay and reviews the various resources used in providing care.

The validity of a scale is the extent to which it actually assesses what it purports to measure.

Vertical integration links services that are at different stages in the production process of health care, for example, organization of preventive services, primary care, acute care, and post acute service delivery around a hospital.

Voluntary hospitals are community hospitals financed through local philanthropy, as opposed to being tax supported.

Voucher is a health care reform approach that relies on individual decisions to purchase health insurance. Tax credits are offered to offset the costs of health insurance for the poorest citizens. The credits are then issued in advance in the form of vouchers with which to purchase insurance.