academic medical center (AMC): An organization whose mission is to provide care for the poor, train medical students and healthcare professionals, and conduct research.
activities of daily living (ADLs): Routine activities that people do every day, such as eating, bathing, getting dressed, toileting, transferring, and continence.
actuary: A professional with advanced training in mathematics and statistics who analyzes the risks and costs associated with different populations, levels of healthcare access, quality, delivery, and financing.
acute care: Immediate, short-term treatment for conditions or injuries that may be life-threatening or require constant monitoring by healthcare professionals.
adverse selection: A situation in healthcare that occurs when sicker (or potentially sicker) people buy health insurance, while healthier people do not, thus increasing the overall risk of the pool.
Affordable Care Act (ACA): A federal law passed in 2010 to reform the US healthcare system.
allopathic medicine: A system of medical practice that focuses on treating disease through medication, surgery, or other interventions; also called conventional medicine or mainstream medicine.
almshouse: A house originally built by an organization or person to take care of the poor.
American Medical Association (AMA): The largest professional association of physicians and medical students in the United States, founded in 1847.
analytics: The gathering and interpretation of data.
assisted living facility: A living arrangement designed to provide basic personal care needs, assistance with activities of daily living (ADLs), limited administration of medications, and services such as laundry and housekeeping; also known as a residential care community.
asymmetric information: The knowledge gap that exists between two parties.
bad debt: Charges for services that are billed but uncollectible and are not charity care.
balance billing: The practice of billing patients for the difference between what their health insurance pays and what the healthcare provider charges; also known as surprise billing.
Balanced Budget Act of 1997: A federal law that authorized Medicare Part C, expanding managed care Medicare programs and the State Children’s Health Insurance Program.
benchmarking: A quality improvement tool in which an organization compares itself to some standard, often industry best practices.
Beveridge model: A type of healthcare system in which healthcare is paid for mostly by government taxes, with one primary healthcare insurer and healthcare services provided mainly by government employees; also called socialized medicine.
big data: Large data sets that are used to analyze a population and find trends in individual or population health.
biosimilar: A drug that has the same clinical effect as a generic drug but a different chemical composition.
Bismarck model: A type of healthcare system in which healthcare is paid for mostly by employees and employers, with many health insurers and healthcare services provided mainly by private providers; also called all payer system.
blockbuster drug: A prescription drug that has annual sales greater than $1 billion.
bundled payments: A payment method in which healthcare providers are paid a set amount for an episode or cycle of care (e.g., hip surgery).
capitation: A payment method in which hospitals, physicians, and other healthcare providers receive a fixed payment per person for providing services for a fixed time period.
caregiver: Any person who helps care for an older individual or person with a disability who lives at home.
cause-and-effect diagram: A graphical depiction of the strategy for achieving a specific outcome (effect) and the factors that influence that outcome (causes); also known as a fishbone diagram.
chronic disease: A disease that persists for three months or longer that generally cannot be prevented by vaccines or cured by medication.
clinical trial: A research study in which human subjects are used to evaluate the effects of a medication, medical device, or intervention to determine its effectiveness and safety.
cloud computing: The use of a network of remote servers to store data accessed via the internet (i.e., the cloud).
community health center: A neighborhood health center that generally serves low-income and uninsured populations.
community health needs assessment (CHNA): A report that assesses the health needs of a community, prioritizes those needs, and identifies resources to address them; under the Affordable Care Act (ACA), nonprofit hospitals are required to complete an assessment every three years.
community rating: A method of setting insurance premiums that uses the general community population (e.g., a metropolitan area) as the risk pool.
concierge medicine: A model of healthcare in which patients pay an annual fee or retainer to be a part of a primary care physician’s practice. Patients receive greater physician access and enhanced services. The physician may bill the patient’s health insurance.
continuing care retirement community (CCRC): A retirement complex that offers a range of services and levels of care.
contractual allowances: The difference between the amount that healthcare providers bill for services and the amount they are paid, based on their contracts with third-party insurers and government programs such as Medicare and Medicaid; also called contractual adjustments.
coproduction of healthcare: Collaboration between patients, families, and healthcare providers to co-create and co-deliver care.
determinants of health: Factors that are drivers of health outcomes, including medical care, individual behavior, social environment, physical environment, and genetics.
diminishing return: A progressively smaller increase in outputs with each incremental increase in inputs.
direct primary care (DPC): A model of healthcare in which patients pay a flat membership fee for a package of primary care services. The physician does not bill the patient’s health insurance.
drug tiers: Groups of prescription drugs that have different costs and copays for consumers.
dual diagnosis: The diagnosis of both a mental illness and a substance abuse disorder.
econometrics: The branch of economics focused on using statistics to describe economic systems.
elasticity of demand: The change in the demand for or quality of a product or service in response to an increase or decrease in price.
electronic health record (EHR): A comprehensive electronic record of an individual’s health information across multiple healthcare providers; ideally, it includes a patient’s demographics, medical history, medications, immunizations, diagnostic information, and notes from multiple healthcare provider interactions.
electronic medical record (EMR): The electronic version of a patient’s medical record from one physician; it generally stays in the physician’s office and is not shared.
Emergency Medical Treatment and Labor Act: A federal law passed in 1986 to prevent “patient dumping,” the practice of emergency rooms refusing to treat people who lack the financial resources to pay for their care.
experience rating: A method of setting insurance premiums that clusters people into smaller risk pools determined by their health history, age, gender, and other factors to set premiums.
external reference pricing: A method that countries use to set and negotiate the prices they will pay for prescription drugs.
externality: A side effect or an involuntary cost or benefit imposed on a third party.
fee-for-service: A payment method in which hospitals, physicians, and other healthcare providers are paid for each service provided.
Flexner Report: A study published in 1910 by the Carnegie Foundation that evaluated medical education in the United States and prompted major changes in the way physicians were educated.
flowchart: A graphical depiction of a process that allows for the identification of problems and bottlenecks.
formulary: A list of approved prescription drugs that an insurance plan covers; also called a drug list.
for-profit hospital: A hospital that is organized to create a profit for its owners; also called an investor-owned hospital. For-profit hospitals must pay state and federal taxes and can distribute profits to their investors and raise money from investors and stock offerings.
full capitation: A payment method in which a fixed amount is paid to an organization to provide a comprehensive package of healthcare services for a set period of time.
fully insured company: A company that pays a set annual premium to a health insurance firm to provide healthcare coverage to its employees; in this arrangement, the health insurance company assumes the financial risk.
generic drug: A copy of a brand-name drug that has the same dosage, intended use, administration, and strength as the original drug.
health disparities: Differences in health outcomes and their causes among groups of people.
Health Insurance Portability and Accountability Act (HIPAA): A federal law passed in 1996 that set national standards to protect the privacy and security of patients’ health information.
hospice care: Short-term supportive and sometimes palliative care for terminally ill patients.
hospital: A healthcare facility that provides medical and surgical treatment and nursing care for patients who are sick or injured.
indemnity healthcare plan: A health insurance plan that allows individuals to choose their own healthcare providers, providing the greatest amount of flexibility for users. These plans generally use fee-for-service payment.
Indian Health Service: The federal government health system that provides healthcare services to Native Americans.
inelastic demand: Little change in the consumption of a product or service when prices increase or decrease.
inpatient care: Care that requires at least an overnight stay in a medical facility, usually a hospital.
inputs: Resources that are combined to produce outputs; in healthcare, inputs include personnel, equipment, buildings, land, and supplies.
insurance: The pooling of financial resources by groups of people (called risk pools) to share risk.
Iron Triangle of Healthcare: A concept introduced by William Kissick describing three competing dimensions of healthcare: access, cost, and quality.
The Joint Commission: The largest accrediting organization in the United States, which accredits about 88 percent of all US hospitals.
Lean: A method used to reduce waste and to increase value to the consumer by identifying what adds value, enhancing this, and seeking to reduce other actions and processes that do not add value.
life expectancy: The average number of years a person is expected to live.
long-term care: Care that is provided for an extended period of time to patients with chronic illness or disability.
managed care: A system used by health insurance companies to reduce the costs and improve the quality of healthcare.
marginal benefit: The gain or benefit that a patient receives from consuming an additional unit of service; also referred to as marginal utility.
marginal cost: The cost of consuming the next unit of service.
meaningful use: The minimum US government standard for electronic health records, outlining how a patient’s health information should be exchanged among clinicians or providers and insurance groups or payers.
medical device industry: An industry that is regulated by the US Food and Drug Administration (FDA) and encompasses a wide range of equipment and products that are critical to healthcare delivery, such as surgical gloves, artificial joints, crutches, and imaging equipment.
medical loss ratio: The percentage of health premium dollars that a health insurance plan spends on provider payments (e.g., medical and surgical costs) as opposed to administrative costs.
mHealth: The use of mobile phones, tablets, or other wireless devices by patients to monitor their health.
micro-hospital: A small hospital with 8 to 50 beds that can provide locally needed services, such as exercise facilities, laboratory testing, imaging services, and pharmacies.
Military Health System (MHS): A system of military healthcare facilities and providers focused on maintaining the health of active-duty military and reserve personnel.
moral hazard: A situation in which people have an incentive to increase their risk when they do not bear the full cost of the risk.
morbidity: The rate of disease or injury in a population.
national health insurance model: A type of healthcare system in which healthcare is paid for mostly by government taxes, with one health insurer and healthcare services provided mainly by private providers; also called single payer system.
not-for-profit hospital: A hospital that is legally organized as a nonprofit corporation and must invest all of its profits back into the organization. Because of the community benefits they provide, not-for-profit hospitals are exempt from paying federal and state taxes.
opportunity cost: The benefits that are given up by choosing an alternative; in other words, the value of a resource when it is employed in its next-best use.
osteopathic medicine: A system of medicine that originated in the manipulation of the musculoskeletal system and that emphasizes preventive medicine while taking a holistic approach to health.
out-of-pocket model: A type of healthcare system in which healthcare is paid for mostly through individual funds, with a mix of private and government providers; also called pay-to-play system.
outpatient care: Care that does not require an overnight stay in a medical facility, such as a hospital; also called ambulatory care.
outpatient psychiatric treatment: Psychiatric services offered on an ambulatory basis that do not require a continuous stay of 24 hours or longer in a treatment facility.
outputs: Goods and services that are produced from a combination of inputs (resources).
over-the-counter (OTC) drug: A drug that can be purchased without a prescription; often sold in pharmacies, grocery stories, and convenience stores.
Pareto chart: A bar or line graph that allows for the identification of the causes that contribute to an overall effect.
partial capitation: A payment method in which an organization is paid a fixed amount to provide a select set of healthcare services for a set period of time.
patent medicines: Nonprescription drugs made of proprietary, or secret, compounds that were sold to the public in the early 1900s.
patented brand-named drug: A drug that is marketed under the manufacturer’s name and protected by a patent, usually for 20 years.
patient day: A unit of measure of the time of one day that a patient remains in a hospital or other overnight facility; also known as an inpatient day, census day, or bed occupancy day.
pharmacy benefit manager (PBM): A company that manages prescription drug benefits for health insurers to control drug spending and provide more effective drugs to consumers.
physician extender: A healthcare provider who is not a physician but performs medical activities typically done by a physician; most physician extenders are nurse practitioners or physician assistants.
Plan-Do-Study-Act: A four-step quality improvement process; also known as the Deming Wheel.
poorhouse: A home or residential institution where people were required to live if they could not financially support themselves.
population health: The health outcomes of a group of individuals, including the distribution of such outcomes within the group.
preexisting condition: An illness or condition that an individual has prior to enrollment in health insurance coverage.
premium: The amount that is paid (typically monthly or annually) for an insurance policy.
primary care: Basic care, usually provided by doctors, nurse practitioners, and physician assistants in an ambulatory care setting.
primary care physician (PCP): A physician who typically serves as the first contact for patients with basic medical needs; treats acute and chronic ailments and illnesses; and focuses on health promotion, disease prevention, health maintenance, and counseling. PCPs primarily practice family medicine, internal medicine, and pediatrics.
production function: The conversion of inputs into outputs.
psychiatric unit: A unit (department) within a community hospital that is dedicated to the inpatient treatment of mental illness.
public health: A field that is concerned with protecting and improving the health of people and communities.
quality-adjusted life year (QALY): A measure of the burden of disability or morbidity; ranges from 1, perfect health, to 0, death.
quaternary care: Highly specialized healthcare services offered at large hospitals; quaternary care may involve experimental treatments and procedures.
registry: A tool for tracking the clinical care and outcomes collection of specific patient populations, such as patients with certain chronic diseases, types of cancer, or infections.
residential treatment center: A mental health facility where psychiatric treatment is provided in a home-like environment with less medical involvement.
respite care: Care that offers family and other caregivers the opportunity to allow someone else to take care of their loved one or client for a short time, often just for the day; also called adult day services.
risk pool: A cluster of people whose medical costs are combined to determine health premiums.
safety-net hospital: A hospital that is committed by mission or mandate to care for those with limited or no access to healthcare services because they lack financial resources.
scarce resources: Resources that are limited and may not be sufficient to meet demand.
secondary care: Care that focuses on the prevention, diagnosis, and treatment of more serious illnesses and injuries for short periods of time. Secondary care includes childbirth services, emergency services, and general surgery.
self-insured company: A company that offers its own healthcare coverage and retains financial responsibility for all employee healthcare costs; in this arrangement, the company assumes the financial risk.
senior center: A community-based center that provides services to the elderly. Programs at these centers address the individual needs of functionally or cognitively impaired adults as well as those who simply want to socialize with others their age.
sentinel event: An event that results in death or serious physical or psychological injury to a patient.
single-payer system: A healthcare payment system that has a single entity that pays healthcare providers.
Six Sigma: A business processes improvement method that uses qualitative and quantitative techniques to increase performance and reduce variation.
skilled nursing facility (SNF): A licensed facility that provides general nursing care to those who are chronically ill or unable to take care of their daily living needs; also called a skilled nursing center.
social determinants of health: Factors in the social and physical environment that affect health outcomes, such as economic stability, neighborhood and physical environment, education, food, community and social context, and the healthcare system.
stakeholder: An individual or group that has some investment in an organization or obtains some benefit from it.
stop-loss insurance: An insurance policy that provides protection against large losses for companies that self-fund their employee benefit plans; the policy pays out after a certain threshold of healthcare costs is reached.
syndromic surveillance: The gathering, analysis, and interpretation of health data to diagnose and respond to population health and public health issues.
telemedicine: The use of two-way audio and video communication to facilitate communication between healthcare providers or between providers and patients.
tertiary care: Care that encompasses complicated services and results from referrals from primary or secondary providers.
third-party administrator (TPA): A company that provides claims processing and employee benefits management without assuming any financial risk.
third-party payer: An entity (a company or individual) that pays for medical services on behalf of a patient.
Triple Aim: A modified version of the Iron Triangle that highlights the interdependencies of population health, quality of care, and cost; it refers to the simultaneous pursuit of three goals: improving the health of populations, improving the patient experience of care, and reducing the per capita cost of healthcare.
value-based payment: A payment system in which provider payments are linked to the cost and quality of care.
Veterans Health Administration (VHA): A healthcare system run by the US federal government that provides hospital services to current and past military members.