Some key terms that will help you speak the language of healthcare and insurance.
Access – The ability of an individual or a patient population to obtain or receive appropriate health care.
Adverse Event Profile – An undesired harmful effect resulting from a medication or other intervention.
Acquisition Cost – The cost a company recognizes on its books after adjusting for discounts, incentives and other necessary expenditures.
Affordable Care Act (ACA) – Officially called the Patient Protection and Affordable Care Act, the ACA is a federal law enacted in 2010 that increases the quality, accessibility, and affordability of health insurance.
Benchmark – A level of care set as a goal to be attained.
Benefits – The health care items or services covered under a health insurance plan. Covered benefits and excluded services are defined in the health insurance plan’s coverage documents.
Biomarker –A characteristic biological property or molecules that can be detected and measured in parts of the body, like the blood or tissue, to indicate a particular disease state.
Clinical Care – Professional specialized or therapeutic care that requires ongoing assessment, planning, intervention and evaluation by health care professionals.
Clinical Judgement – The process by which the physician or other health professional applies critical thinking to interpret the medical data about a specific patient, arrives at a diagnosis, and identifies appropriate courses of treatment.
Clinical Pathway – A sequenced, multidisciplinary plan that translates published medical practice guidelines into the essential steps for treating a specific disease or condition based on evidence-based practice. Clinical pathways give detailed guidance to doctors on when and how to treat a patient’s disease at each stage of care. Also known as care maps, care paths, care protocols and care modules.
Clinical Practice Guideline – A systematically developed statement that summarizes and evaluates the latest clinical evidence on the prevention, diagnosis, management and treatment options for a specific disease and presents all possible decision options. Clinical practice guidelines are developed by medical professional societies, physician organizations and research institutions based on a rigorous peer-reviewed process and updated periodically.
Clinical Evidence – The best available evidence gained from peer-reviewed scientific research to guide health decision-making.
Combination Therapy – A therapeutic intervention in which more than one therapy is administered to the patient.
Cost Benefit – The relationship between the cost of an activity and the benefit that is achieves from it.
Cost Containment – A set of steps to control the use of health services that contribute to higher than necessary costs.
Cost Effectiveness Analysis – A form of analysis that seeks to determine the costs and effectiveness of a health intervention compared with similar alternative interventions.
Cost Sharing – The share of costs covered by the health plan that the patient pays out of his or her own pocket.
Coinsurance – The share of the costs of a covered health care service, calculated as a percentage (for example, 20%) of the allowed amount for the service. The patient pays coinsurance after meeting his or her deductible.
Comorbidity – The presence of one or more additional diseases or conditions occurring along with a primary disease or disorder.
Continuum of Care – An integrated system of care that guides and tracks patients from diagnosis onward through a comprehensive array of health services spanning all levels and intensity of care.
Copayment– A fixed amount (for example, $15) the patient pays for a covered health care service, usually when the service is provided (such as picking up a prescription), as determined by the patient’s health insurance plan. The amount can vary by the type of covered health care service.
Criterion – An attribute or rule that serves as a basis for evaluation, definition or classification of something; an evaluation standard.
Deductible – The amount the patient owes for covered health care services before the health insurance plan begins to cover, pay, or reimburse. For example, if the deductible is $1,000, the plan won’t cover, pay, or reimburse anything until the patient pays $1,000 for covered services.
Direct Patient Care – Any activities by a health professional involving direct interaction, treatment, administration of medications or other therapy or involvement with a patient.
Drug List – A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits. Also called a formulary.
Effectiveness – The degree to which a treatment plan or intervention has achieved its purpose within the limits set for reaching its objective.
Essential Drugs – Those therapeutic agents considered indispensable for the rational care of a disease based on clinical evidence.
Evidence-Based Care – The conscientious, explicit and judicious use of current best evidence in making decisions about the care of individuals. This approach must balance the best external evidence with the desires of the individual and the clinical expertise of health care providers.
Evidence-Based Decision-Making – The application of the best available scientific evidence to decisions about specific treatments or care.
Exclusion – The health care services and medicines the health insurance plan will not pay for, cover, or reimburse.
Fail First – A practice also called “step therapy” whereby health plans require patients to attempt treatment with one or a series of less expensive therapies and show they are ineffective before the insurance company will agree to pay for the medication prescribed by their doctor.
Fee Schedule – A listing of accepted fees or established allowances for specified medical or other professional procedures and services. As used in health plans, it usually represents the maximum amounts the plan will pay for the specified procedures.
First Line Therapy – Also called primary treatment or primary therapy, this is the first treatment given for a disease.
Formulary – A list of drugs, usually by their generic names, and indications for their use. A formulary is intended to include a sufficient range of medicines to enable medical practitioners to prescribe all medically appropriate treatment for all reasonably common illnesses. In some health plans, providers are limited to prescribing only drugs listed on the plan’s formulary.
Gatekeeper – – A health professional, who may be a medical practitioner, nurse or other professional, who has the first encounter with the patient and controls the individual’s entry into the health care system.
Genomic[SW2] Testing – A type of medical test that looks at all of a person’s genes (genome) to determine if the individual is a candidate for a specific therapy.
Genotype – Refers to the entire set of genes in a cell, an organism, or an individual.
Gross Domestic Product (GDP) – The total value of goods, produced and services provided in a country during one year.
Health Outcome – A change in a patient’s health status resulting from the delivery of health services and interventions.
Impact – The total, direct and indirect, effects of a treatment, intervention or program on health status.
Indication – A clinical symptom or circumstance indicating that the use of a particular treatment or intervention would be appropriate.
Immunotherapy – A treatment that uses certain parts of a person’s immune system to fight diseases such as cancer.
Life Expectancy –The statistically determined average number of years of life remaining after a specified age for a given group of individuals
List Price – The price of a drug that is shown in a pharmacy’s computer.
Medically Necessary – A treatment or service that is appropriate and consistent with a person’s diagnosis and which, in accordance with locally accepted standards of practice, cannot be omitted without adversely affecting the person’s condition or the quality of care.
Metric – A system or standard of measurement.
Molecular-Based Therapy – A relatively new type of cancer treatment that uses drugs or other substances to more precisely identify and attack cancer cells, usually while doing little damage to normal cells.
Multiple Myeloma – A rare and incurable blood cancer that affects the plasma cells and causes such serious problems as anemia, bone fractures, nerve and kidney damage, skin lesions and an impaired immune system.
National Institute for Health and Care Excellence (NICE) – An independent organization set up by the British government in 1999, which decides which drugs and treatments are available through the UK’s National Health Service.
Net Cost– In medicine, the net cost is the difference between the average cost for patients with a specific disease and those without the disease who are otherwise comparable.
Network – The facilities, providers and suppliers the health insurer or plan has contracted with to provide health care services.
Objective – A measurable state of health that is expected to exist at a predetermined place and time as a result of the application specific interventions.
Orphan Drug – Drugs and biologics developed specifically to treat a rare medical condition or disease (called an orphan disease), usually affecting fewer than 200,000 people.
Outcome – The results that may stem from a medical, surgical or therapeutic intervention or non-intervention.
Out of Pocket Costs – The expenses for medical care that aren’t reimbursed by insurance. Out-of-pocket costs include deductibles, coinsurance, and copayments for covered services plus all costs for services that aren’t covered.
Parameter – Generally any characteristic that can help in defining or classifying a measurable factor.
Patient-Centered Care – An approach to care that consciously adopts a patient’s perspective.
Patient-Focused QALY –A measure that takes into account the value of hope, expressed as the survival benefits of the novel therapy multiplied by the expected future improvements in medical technology.
Payer – Companies and government agencies that finance or reimburse the cost of health services.
Pharmacy Benefit Manager (PBM) – In the U.S., a pharmacy benefit manager (PBM) is a third-party administrator of prescription drug programs for commercial health plans, self-insured employer plans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans.
Preauthorization – A decision by the health insurer or PBM that a lab test, procedure, prescription drug or other health service is medically necessary. Also called precertification and prior authorization.
Prevalence – The total number of cases of a disease in a given population at a specific time.
Price Control – A maximum price that can be charged for an essential item. Usually, governments set the restrictions on the prices that can be charged in a market.
Prior Authorization – Approval from a health plan that may be required before the patient gets a service or fills a prescription in order for the service or prescription to be covered by the plan.
Prognosis – A forecast of the likely course of a disease or condition.
Protocol – Standards or practices developed to assist health care providers and patients to make and effect decisions about particular steps in the treatment process.
Quality-Adjusted Life Year (QALY) – A measure of disease burden, including both the quality and the quantity of life lived where one QALY equates to one year in perfect health. This measure is used in economic evaluations to assess the value for money of medical interventions.
Quality of Life (QOL) – The general well-being of individuals and societies, outlining negative and positive features of life. It observes life satisfaction, including everything from physical health, family, employment, beliefs, and the environment.
Quality of Care – The degree to which delivered health services meet established professional standards and are judged to be of value to the patient.
Rationing – Allowing each person only to have a fixed amount.
Rebate – A partial refund or discount for part of the original payment for some service or product.
Refractory – In medicine, refractory describes a disease or condition which does not respond to attempted forms of treatment.
Relapse – The return of a disease or the signs and symptoms of a disease after a period of improvement. Also referred to as recurrence.
Remission – The period in the course of a disease when symptoms lessen or disappear.
Risk Stratification – A tool for identifying and predicting which patients are at high risk, or likely to be at high risk.
Second Line Therapy – Treatment that is given when initial treatment (first-line therapy) doesn’t work, or stops working.
Step Therapy – A practice also called “fail first” whereby health plans require patients to attempt treatment with one or a series of less expensive therapies and show they are ineffective before the insurance company will agree to pay for the medication prescribed by their doctor.
Subset – A part of a larger group, such as patients diagnosed with a specific disease.
Third Line Therapy – Given usually to patients with advanced disease when both initial treatment (first-line therapy) and subsequent treatment (second-line therapy) don’t work, or stop working.
Threshold –The magnitude that must be exceeded for a certain result to occur.
Tiered Formulary – A formulary that divides drugs into groups, based primarily on cost. A plan’s formulary might have three, four or even five tiers. Health plans negotiate the drug’s pricing with pharmaceutical manufacturers and place the medicine on a tier, which determines the cost-sharing amounts for patients.
Therapeutic/Treatment Regimen – A regulated course of treatment, including the use of specific medications, intended to cure or improve the outcomes of a patient with a disease or medical condition.
Treatment Armamentarium – The collection of resources available to treat a specific disease.
Utilization Management – The process of evaluating the medical necessity, appropriateness, and efficiency of health care services, including access to novel therapies.
Value – In economics, “value” is defined as “the measure of the benefit of a good or service,” not the actual price. Therefore, health economists define the value of medicines as the health outcomes achieved – such as extra years of life, higher quality of life and fewer costly hospitalizations, invasive medical procedures and doctor’s visits per dollar spent.
Value Assessment – In health care, this is a system for determining the therapeutic value of new medicines compared to older treatments
Value Framework – A new process now being used by various organizations to assess the value of medicines, using measures of both clinical benefit and treatment cost. Most of the value frameworks are intended to support shared decision-making between physicians and patients but the value framework developed by the Institute for Clinical and Economic Review (ICER) is designed for insurers making coverage policy decisions.