GLOSSARY AND RESOURCES

GLOSSARY AND RESOURCES

ECONOMICS AND ETHICS MODULES

GLOSSARY Alphabetized Terms Related to Economics and Ethics Modules (glossary references listed in resources column)	RESOURCES Related Literature & URLs

Capitation: a set amount of payment per person per month for health care services, usually for one year, as negotiated between the managed care organization and the providers (hospitals and/or physicians). Capitated services are reimbursed the same regardless of how many times services are used.	Integrated Healthcare Association glossary http://www.iha.org/gloss.htm
Cost-benefit analysis: method of economic analysis that assesses both costs and benefits of an intervention, service, or program, estimating both costs and benefits in monetary units, such as dollars · Requires assigning monetary value to health outcomes, such as increased survival, reduced complications, reduced disability, and improved quality of life · Best measured in terms of net benefits (total benefits – total costs) · Commonly but inappropriately used as a generic term for all economic analyses	Schwartz, J.S., Vanscoy, G.J., & Lee, T.H. (1995). Healthcare economics: The new tool for clinical decision making. Center for Continuing Education in Health Sciences, University of Pittsburgh.
Cost-effectiveness analysis: method of economic analysis that assess both the cost and the effectiveness of an intervention, service, or program; measured in units of outcomes experienced, such as number of years of improved survival, cases of disease prevented, or quality-adjusted life years (QALYs) gained · Requires relevant outcomes to be assessed for any given intervention · Requires comparison with other alternative interventions	Schwartz, J.S., Vanscoy, G.J., & Lee, T.H. (1995). Healthcare economics: The new tool for clinical decision making. Center for Continuing Education in Health Sciences, University of Pittsburgh.
Elasticity: The responsiveness of the market to match customers' willingness to pay for products and services.	Buchholz, TG (1995). From here to economy: A shortcut to economic literacy. New York: Penguine Books.
Evidence-based health care: Critical analysis of the best practice determined by cost-benefit analysis, contribution to advances in professional practice, and outcome improvement. The critical question answered is, "Has best practice been achieved and based on what evidence?" (Soukup, 2000) Patient Oriented Evidence that Matters (POEM) is looking at such issues as reduced mortality, morbidity, and quality of life issues that involve real patients. An example of patient oriented evidence that matters would be a study comparing one antihypertensive drug to another to determine which reduced mortality from hypertension over a 10-20 year period. Disease Oriented Evidence (DOE) is focused on the pathology, etiology, or possible alteration of the disease over time using some modality such as pharmacotherapy. An example of disease oriented evidence would be to compare one antihypertensive drug with another to determine which one reduced the amount of vasoconstrictors (e.g., Nitric Oxide) at the epithelial lining of the peripheral vessels.	Soukup, SM (2000). Evidence-based nursing practice. Nursing Clinics of North America 35(2). The second edition book, Evidence-Based Medicine, by Sackett, Straus, Richardson, Rosenburg, & Haynes, is an excellent resource for learning about evidence based practice. Studying a Study and Testing a Test by Reigelman offers additional resources on the topic. Cochrane Library(institutional fee) http://www.updateusa.com/clibip/clib.htm National Library of Medicine http://www4.ncbi.nlm.nih.gov/PubMed/clinical.html Journal of Family Practice http://jfp.msu.edu
Free market system: equitable exchange and balance between sellers who supply goods and services and buyers who demand goods and services.	Buchholz, TG (1995). From here to economy: A shortcut to economic literacy. New York: Penguine Books.
Health Care Financing Administration (HCFA): The federal agency that administers Medicare, Medicaid and the State Children's Health Insurance Program (SCHIP).HCFA provides health insurance for over 74 million Americans through Medicare, Medicaid and SCHIP. The majority of these individuals receive their benefits through the fee-for-service delivery system, however, an increasing number are choosing managed care plans.	http://www.hcfa.gov

Health economics: assessment of the most efficient use of available resources, defined in terms of costs and outcomes	Schwartz, J.S., Vanscoy, G.J., & Lee, T.H. (1995). Healthcare economics: The new tool for clinical decision making. Center for Continuing Education in Health Sciences, University of Pittsburgh.
Health economic analysis: assessment of all relevant costs, benefits, and outcomes related to a medical intervention · Not merely the acquisition or administration costs · Compares all relevant alternative interventions and services regardless of class of service, department, or specialty	Schwartz, J.S., Vanscoy, G.J., & Lee, T.H. (1995). Healthcare economics: The new tool for clinical decision making. Center for Continuing Education in Health Sciences, University of Pittsburgh.
Health Care Financing Administration:
Health Maintenance Organization (HMO): A pre-paid fee gives members comprehensive health care from pre-selected physicians for a minimal co-payment ($5-$15 co-pay).	http://www.iha.org/gloss.htm
Inflation: Steady and persistent increases in the general price level in an economy.	Chang, CF, Price, SA, & Pfoutz, SK (2001). Economics and nursing: Critical professional issues. Philadelphia: FA Davis Company

Managed Health Care: a health care system focused on containing costs while delivering high quality health care.	http://www.iha.org/gloss.htm
Managed Care Organization (MCO): multiple types of organizations including health insurers, medical groups, hospitals, and health systems accountable for the health of a group of people enrolled to receive health care services. MCOs seek improvements in care-effectiveness and cost-effectiveness.	http://www.iha.org/gloss.htm
Marginalism: the incremental determination of how much of some service or product to produce.
Medicare:	http://www.dhhs.gov/progorg/oig.htm
Medicaid:
Quality-Adjusted Life Year: a common method for estimating the value of alternative outcomes in terms of common nonmonetary unit, derived from the expressed preferences of patients for alternative states of health · Integrates the quality of life experienced with the outcome obtained as a result of an intervention · States associated with decreased functional status are weighted less than states with improved function	Schwartz, J.S., Vanscoy, G.J., & Lee, T.H. (1995). Healthcare economics: The new tool for clinical decision making. Center for Continuing Education in Health Sciences, University of Pittsburgh.
Supply and demand: the law of supply states that increased expenses are worth the investment only when higher profits are made from higher costs of higher productions ratios; the law of demand states that if goods and services are produced in a specified quantity, then prices will be lowered also.