The new anatomy of health care - includes related articles and glossary of medical terms - Panel Discussion

Chief Executive, The, Jan, 1996 by J.P. Donlon, Barbara Benson

FEE FOR SERVICE - How a patient gets health care under an indemnity plan: The doctor charges the patient for each procedure and test, the patient fills out forms, and the health insurer pays all or part of the doctor's fees.

FORMULARIES - A list of prescription drugs and their doses that have been selected by a health plan as the best choices in cost and effectiveness.

HEDIS - Health-care Employer Data and Information Set. HEDIS is a list of performance measures designed by the National Committee for Quality Assurance. Employers use HEDIS to rate health plans against regional or national norms to judge plan quality.

HMO - Health Maintenance Organization. A health plan that places doctors at risk for medical expenses and uses primary care doctors as gatekeepers by restricting procedures and costs.

INDEMNITY PLAN - An insurance program that reimburses the insured person for all services and expenses covered under the plan.

LIVES. Also known as "people" to anyone who is not an insurer, employee-benefits executive, or consultant.

MCO - Managed-Care Organization. Any managed-care plan. The term can apply to an HMO, PPO, or any health plan that influences the cost of services and measures physician performance.

OUTCOMES - As in "desirable patient outcomes." An employer or a health plan scrutinizes outcomes to measure providers' performance.

PAYORS - Those who actually pay for health care. That includes self-insured employers, insurance companies, HMOs, Medicaid, and Medicare.

PCP - Primary Care Physician. The old general practitioner, now replacing the medical specialist at the top of the health-care food chain. The PCP is the all-powerful gatekeeper in managed care. All HMO enrollees must pick a PCP, who is responsible for preventative and routine medical care. The PCP is trained in internal medicine, pediatrics, family practice, nursing, gynecology, or as a nurse practitioner or physician's assistant.

POS - Point of Service. A health plan in which members don't have to choose how to receive services until they need them (also referred to as a "cafeteria-style plan"). The plan provides different benefits (for example, 100 percent coverage rather than 70 percent coverage) if the member uses authorized providers. It costs the member more to go outside the plan for services. Employers often use POS plans to spoon-feed employees their first dose of managed care.

PPO - Preferred Provider Organization. Doctors who have contracts with a health plan are known as that plan's preferred providers, and the network of doctors and hospitals is a PPO. Members are encouraged to choose the preferred providers through financial incentive. These doctors will cost them less money (with low co-payments) than doctors who are not in the PPO.

RISK - Refers to financial responsibility for medical care. If a doctor or hospital agrees to care for an HMO member for a set monthly fee, it is "at risk" for the cost of the patient's care.

UR - Utilization Review. A formal review conducted by an MCO or an employer that determines how patients use health care, and the appropriateness of that use. Before an HMO member is hospitalized, for example, a UR person (usually a nurse) decides if hospitalization is necessary.