Healthcare Policy and Law
Expert-defined terms from the Professional Certificate in Healthcare and Pharmaceutical Management course at London School of International Business. Free to read, free to share, paired with a globally recognised certification pathway.
Accountable Care Organization (ACO) #
Accountable Care Organization (ACO)
An Accountable Care Organization (ACO) is a group of healthcare providers who wo… #
ACOs are responsible for the quality and cost of care provided to their patients. They are incentivized to improve patient outcomes while reducing costs. ACOs often use data and analytics to identify high-risk patients and provide proactive care to prevent expensive hospitalizations or complications. By aligning incentives and promoting collaboration among providers, ACOs aim to improve the overall quality of care and reduce healthcare spending.
Antitrust Laws #
Antitrust Laws
Antitrust laws are regulations that aim to promote fair competition in the marke… #
In the healthcare industry, antitrust laws are designed to ensure that healthcare providers, insurers, and other entities do not engage in activities that could harm consumers by limiting choice or driving up prices. Antitrust laws apply to mergers and acquisitions, price-fixing, market allocation, and other practices that could harm competition. Healthcare organizations must comply with antitrust laws to avoid legal penalties and maintain a competitive marketplace.
Benefit Design #
Benefit Design
Benefit design refers to the structure of a health insurance plan, including the… #
Benefit design can impact access to care, affordability, and health outcomes. Common elements of benefit design include deductibles, copayments, coinsurance, and coverage limits. Insurers may vary benefit design to meet the needs of different populations or to control costs. Effective benefit design should balance cost-sharing with access to essential services to promote better health outcomes.
Bundled Payments #
Bundled Payments
Bundled payments are a payment model in which healthcare providers receive a sin… #
Instead of paying for each service separately, bundled payments cover all services related to a particular procedure or condition. This payment model encourages providers to coordinate care, reduce unnecessary services, and improve quality. Bundled payments can be used for surgeries, chronic disease management, and other types of care. By aligning incentives and promoting efficiency, bundled payments can lead to better outcomes and lower costs for patients and payers.
Capitation #
Capitation
Capitation is a payment model in which healthcare providers receive a fixed amou… #
Under capitation, providers are responsible for managing the health of their patients within the allocated budget. This payment model incentivizes providers to focus on preventive care, manage chronic conditions, and avoid unnecessary services to control costs. Capitation can be used in managed care organizations, accountable care organizations, and other integrated delivery systems. While capitation can promote efficiency and coordination, it may also create incentives to underprovide care to maximize profits.
Certificate of Need (CON) #
Certificate of Need (CON)
A Certificate of Need (CON) is a regulatory process used in some states to contr… #
Before a healthcare provider can build a new facility, add beds, or purchase major equipment, they must obtain a CON from the state regulatory agency. The goal of CON laws is to prevent unnecessary duplication of services, control healthcare costs, and promote access to care in underserved areas. Critics argue that CON laws can limit competition and innovation, while supporters believe they help ensure high-quality, cost-effective care.
Clinical Practice Guidelines #
Clinical Practice Guidelines
Clinical practice guidelines are evidence #
based recommendations for healthcare providers to follow when diagnosing, treating, and managing specific conditions. Guidelines are developed by expert panels based on the best available research and clinical evidence. By standardizing care practices, clinical practice guidelines aim to improve quality, consistency, and outcomes. Guidelines may address screening, diagnosis, treatment, follow-up care, and other aspects of care. Healthcare organizations often use guidelines to inform clinical decision-making, standardize care processes, and improve patient outcomes. Adherence to guidelines can vary based on provider knowledge, patient preferences, and other factors.
Cobra Coverage #
Cobra Coverage
COBRA coverage refers to the Consolidated Omnibus Budget Reconciliation Act, whi… #
COBRA coverage typically lasts for up to 18 months, although it can be extended in certain circumstances. Individuals who elect COBRA coverage must pay the full premium, including the portion previously paid by their employer. COBRA coverage can provide a temporary bridge to maintain health insurance while transitioning to a new job or insurance plan.
Compliance #
Compliance
Compliance refers to the process of following laws, regulations, policies, and s… #
Healthcare organizations are subject to a wide range of rules governing patient privacy, billing practices, quality of care, and other areas. Compliance programs aim to ensure that organizations adhere to legal requirements, mitigate risks, and promote ethical behavior. Compliance activities may include training staff, conducting audits, monitoring performance, and responding to violations. Effective compliance programs can help healthcare organizations avoid legal penalties, protect their reputation, and maintain high standards of care.
Consolidation #
Consolidation
Consolidation refers to the process of combining healthcare organizations, such… #
Consolidation is a common trend in the healthcare industry as organizations seek to gain scale, improve efficiency, and better coordinate care. While consolidation can lead to cost savings, enhanced services, and improved outcomes, it can also raise concerns about reduced competition, higher prices, and limited consumer choice. Regulators may scrutinize consolidation activities to ensure that they do not harm consumers or impede access to care.
Copayment #
Copayment
A copayment is a fixed amount that an individual must pay out of pocket for a sp… #
Copayments are a form of cost-sharing between the individual and the insurer, intended to reduce unnecessary utilization of services and control costs. Copayments are typically set at a flat rate, although they may vary based on the type of service or insurance plan. Copayments are separate from deductibles and coinsurance, which are other forms of cost-sharing in health insurance plans.
Cost #
Sharing
Cost #
sharing refers to the division of healthcare costs between individuals and insurers, typically through deductibles, copayments, coinsurance, or out-of-pocket limits. Cost-sharing is designed to incentivize individuals to use healthcare services responsibly, reduce unnecessary utilization, and control overall healthcare spending. By requiring individuals to pay a portion of the cost of care, cost-sharing can influence healthcare decisions, such as whether to seek treatment, choose a specific provider, or adhere to a prescribed treatment plan. Balancing cost-sharing with access to essential services is important to ensure that individuals receive needed care without financial barriers.
Credentialing #
Credentialing
Credentialing is the process of verifying a healthcare provider's qualifications… #
Credentialing is typically conducted by hospitals, health systems, insurers, and other healthcare organizations before granting privileges to provide services to patients. The credentialing process may include reviewing education and training credentials, verifying licensure and certifications, checking malpractice history, and assessing clinical competence. By credentialing providers, healthcare organizations aim to protect patients, maintain quality standards, and comply with regulatory requirements.
Data Privacy #
Data Privacy
Data privacy refers to the protection of sensitive information, such as personal… #
In healthcare, data privacy is essential to safeguard patient confidentiality, maintain trust, and comply with laws and regulations, such as the Health Insurance Portability and Accountability Act (HIPAA). Data privacy practices include securing electronic health records, restricting access to sensitive information, obtaining patient consent for data sharing, and implementing security measures to prevent data breaches. Healthcare organizations must prioritize data privacy to protect patient rights and ensure the confidentiality of personal health information.
Disparities in Healthcare #
Disparities in Healthcare
Healthcare disparities refer to differences in access to care, quality of care,… #
Disparities can arise from various factors, including social determinants of health, systemic barriers, discrimination, and lack of resources. Addressing healthcare disparities is essential to achieve health equity, improve population health, and reduce healthcare costs. Strategies to reduce disparities may include increasing access to care, addressing social determinants of health, promoting cultural competence, and implementing policies to address inequities.
Electronic Health Record (EHR) #
Electronic Health Record (EHR)
An Electronic Health Record (EHR) is a digital version of a patient's medical hi… #
EHRs are designed to improve the accuracy, efficiency, and accessibility of patient records, enhance care coordination, and support clinical decision-making. EHRs can be shared among healthcare providers, hospitals, labs, and other entities to facilitate communication and continuity of care. EHRs are subject to data privacy and security regulations to protect patient information from unauthorized access or disclosure. Adoption of EHRs is widespread in healthcare to streamline workflows and improve patient outcomes.
Emergency Medical Treatment and Labor Act (EMTALA) #
Emergency Medical Treatment and Labor Act (EMTALA)
The Emergency Medical Treatment and Labor Act (EMTALA) is a federal law that req… #
EMTALA prohibits hospitals from refusing care or transferring patients for financial reasons and requires them to stabilize emergency medical conditions before discharge. EMTALA aims to ensure that all individuals have access to emergency care and prevent patient dumping. Hospitals that violate EMTALA can face fines, penalties, and loss of Medicare funding.
Employer #
Sponsored Health Insurance
Employer #
sponsored health insurance refers to health coverage provided by employers to their employees as part of their benefits package. Employer-sponsored plans may offer a range of benefits, including medical, dental, vision, and prescription drug coverage. Employers typically share the cost of premiums with employees, although the amount of cost-sharing can vary. Employer-sponsored health insurance is a common form of coverage in the United States, covering a significant portion of the population. Employers may partner with insurers to offer health plans or self-fund their plans to provide customized benefits to employees.
Essential Health Benefits #
Essential Health Benefits
Essential Health Benefits are a set of services that health insurance plans must… #
Essential Health Benefits include categories such as ambulatory services, emergency care, hospitalization, maternity and newborn care, mental health and substance use disorder services, prescription drugs, preventive and wellness services, and pediatric services. Health plans sold on the ACA marketplace and Medicaid expansion plans must cover Essential Health Benefits to meet minimum standards of coverage. Essential Health Benefits aim to protect consumers and ensure access to necessary healthcare services.
Evidence #
Based Medicine
Evidence #
based medicine is an approach to clinical decision-making that integrates the best available research evidence, clinician expertise, and patient preferences to inform medical practice. Evidence-based medicine emphasizes using scientific research, clinical guidelines, and systematic reviews to guide treatment decisions, improve outcomes, and reduce variations in care. Practitioners rely on high-quality evidence from randomized controlled trials, meta-analyses, and other studies to inform diagnostic, therapeutic, and preventive interventions. By applying evidence-based medicine, healthcare providers can deliver effective, efficient, and patient-centered care based on the latest scientific knowledge.
Fee #
for-Service
Fee #
for-service is a payment model in which healthcare providers receive payment for each service they deliver to a patient, such as a consultation, procedure, test, or treatment. Under fee-for-service, providers are reimbursed based on the volume and complexity of services provided, regardless of outcomes or quality. Fee-for-service payment can create incentives to deliver more services, even if they are unnecessary, leading to overutilization and higher costs. While fee-for-service remains common in healthcare, alternative payment models, such as value-based care, aim to align incentives with quality, outcomes, and efficiency to promote better care delivery.
Formulary #
Formulary
A formulary is a list of prescription drugs that a health plan covers and prefer… #
Formularies are developed by insurers, pharmacy benefit managers, and other entities to guide prescribing practices, control costs, and promote the use of cost-effective medications. Drugs on a formulary may be categorized by tier, with different copayments or coinsurance levels, based on their cost and clinical effectiveness. Formularies may include generic, brand-name, and specialty drugs, as well as restrictions on certain medications. Providers and patients can consult the formulary to make informed decisions about drug therapy and coverage.
Health Information Exchange (HIE) #
Health Information Exchange (HIE)
A Health Information Exchange (HIE) is a secure system that enables healthcare p… #
HIEs facilitate care coordination, reduce duplication of services, improve communication among providers, and enhance patient safety. HIEs may connect hospitals, clinics, pharmacies, labs, and other healthcare entities to exchange information seamlessly. By promoting interoperability and data sharing, HIEs support continuity of care, improve clinical decision-making, and enhance the quality and efficiency of healthcare delivery.
Health Insurance Marketplace #
Health Insurance Marketplace
The Health Insurance Marketplace, also known as the health insurance exchange, i… #
The Marketplace offers a range of health plans with different coverage levels, costs, and benefits. Individuals can compare plans, determine eligibility for subsidies or Medicaid, and enroll in coverage through the Marketplace. The Marketplace aims to increase access to affordable health insurance, improve transparency, and promote competition among insurers. States may operate their own Marketplaces or use the federal platform.
Health Maintenance Organization (HMO) #
Health Maintenance Organization (HMO)
A Health Maintenance Organization (HMO) is a type of managed care organization t… #
HMOs typically require members to choose a primary care physician who coordinates their care and refers them to specialists within the network. HMOs emphasize preventive care, care coordination, and cost-effective services to promote quality and efficiency. Members may be required to obtain services from network providers and obtain prior authorization for certain treatments. HMOs aim to control costs, improve outcomes, and enhance patient satisfaction through integrated care delivery.
Health Policy #
Health Policy
Health policy refers to decisions, actions, and plans that governments, organiza… #
Health policy encompasses a wide range of issues, including insurance coverage, reimbursement, quality of care, regulation, public health interventions, and healthcare delivery models. Health policy is influenced by political, economic, social, and ethical considerations and requires collaboration among stakeholders to address complex challenges in healthcare. Effective health policy can shape the healthcare system, drive innovation, and improve population health outcomes.
Health Savings Account (HSA) #
Health Savings Account (HSA)
A Health Savings Account (HSA) is a tax #
advantaged account that individuals can use to save money for qualified medical expenses. HSAs are available to individuals with high-deductible health plans and allow them to contribute pre-tax dollars to cover out-of-pocket healthcare costs. HSA funds can be used for medical expenses not covered by insurance, such as deductibles, copayments, prescriptions, and other qualified services. Contributions to HSAs are tax-deductible, grow tax-free, and can be withdrawn tax-free for medical expenses. HSAs provide individuals with greater control over their healthcare spending and savings for future health needs.
Healthcare Quality #
Healthcare Quality
Healthcare quality refers to the degree to which healthcare services provided to… #
Quality measures assess the processes, outcomes, structures, and experiences of care to evaluate performance, identify areas for improvement, and drive accountability. Healthcare quality is influenced by evidence-based practices, clinical guidelines, patient preferences, and organizational culture. Improving healthcare quality requires collaboration among providers, payers, policymakers, and patients to implement best practices, measure performance, and continuously enhance care delivery.
Healthcare Reform #
Healthcare Reform
Healthcare reform refers to efforts to change and improve the healthcare system… #
Healthcare reform may involve changes to insurance coverage, payment models, delivery systems, regulations, public health initiatives, and other components of the healthcare system. Reform efforts can be driven by policymakers, stakeholders, advocacy groups, and patients to address systemic issues, respond to emerging trends, and achieve better health outcomes. Healthcare reform is a complex and ongoing process that requires collaboration, innovation, and evidence-based strategies to transform the healthcare landscape.
Healthcare Regulation #
Healthcare Regulation
Healthcare regulation refers to laws, rules, policies, and standards that govern… #
Healthcare regulations aim to protect patient safety, ensure quality of care, control costs, and promote ethical practices in the healthcare industry. Regulations cover a wide range of areas, including licensure, accreditation, reimbursement, privacy, data security, fraud prevention, and patient rights. Compliance with healthcare regulations is essential for providers, insurers, suppliers, and other entities to avoid legal penalties, maintain accreditation, and uphold professional standards. Healthcare regulations are continually evolving to address new challenges and opportunities in healthcare.
Healthcare System #
Healthcare System
A healthcare system is a complex network of organizations, providers, payers, re… #
Healthcare systems encompass hospitals, clinics, physician practices, insurers, pharmacies, labs, public health agencies, and other entities involved in care delivery. Healthcare systems vary by country, region, and setting, reflecting differences in financing, organization, delivery models, and outcomes. Healthcare systems face challenges such as rising costs, workforce shortages, disparities, and technological advancements that require continual adaptation, innovation, and collaboration to meet the needs of diverse populations and improve health outcomes.
Healthcare Technology #
Healthcare Technology
Healthcare technology, also known as health information technology (HIT), refers… #
Healthcare technology includes electronic health records, telehealth, mobile health apps, remote monitoring devices, health information exchanges, and data analytics platforms. Technology can streamline workflows, reduce errors, enhance communication, and empower patients to take an active role in their health. Healthcare organizations invest in technology to drive innovation, improve efficiency, and adapt to changing healthcare trends.
Healthcare Utilization #
Healthcare Utilization
Healthcare utilization refers to the use of healthcare services by individuals a… #
Healthcare utilization can vary based on factors such as age, gender, socioeconomic status, health status, insurance coverage, and access to care.