1. DIFFERENT MEANINGS OF COST
There are 3 different definitions of “cost” depending on one’s perspective:
Consumer
“Micro-perspective”
The price of health care to include:
Physician’s bill,
Price of a prescription, or
Premiums employers pay to purchase health insurance for
their employees
National (based on GDP)
“Macro-perspective”
How much a nation spends on delivering health care services
Provider
The cost of producing health care services to include:
Staff salaries,
Capital costs of buildings and equipment,
Rental space, and
Purchase of supplies

2. REASONS FOR COST ESCALATION
Patients are not too concerned with the cost of health care because they only bear a fraction of the financial burden out of pocket
Third-Party Payment
Utilization of health care is driven by need rather than economic demand
Imperfect Market
New technology is expensive to develop
Growth of Technology
Elderly people consume more health care and life expectancy at birth has increased by over 30 years
Increase in Elderly Population
The medical model emphasizes medical interventions AFTER a person has become sick, which is more costly than promoting prevention and lifestyle behavior changes
Medical Model
Due to complexity, costs are often duplicated
Multi-Payer System
Tests and services that are not medically justified are performed by physicians to protect themselves against potential malpractice lawsuits (i.e. labor induction)
Defensive Medicine
Fraud, a knowing disregard of the truth, can be practiced by both health care providers and patients
Waste & Abuse
There are differences in practice patterns that are only associated with geographic areas of the country
Practice Variations

3. ACCESS TO HEALTH CARE MEASURED BY TYPES DIMENSIONS Individual Level
Indicators include:
Measures of medical services
utilization relative to enabling and
predisposing factors while
controlling for need for care
Patient’s assessment of interaction
with provider
Health Plan Level
Plan characteristics that affect
enrollment
Plan practices that affect access
Plan quality as measured by HPEDIS1
Delivery System Level
Indicators include ecological measures that affect populations rather than individuals
Potential Access
Refers to both health care system characteristics and enabling characteristics
Realized Access
The type, site, and purpose of health services
Equitable/Inequitable Access
Equitable: The distribution of health
care services according to the
patient’s self-perceived need
Inequitable: Distribution of services
according to enabling characteristics
Effective & Efficient Access
Linking access to quality of care can determine whether they are indicative of one another
Availability
The fit between service capacity and individuals’ requirements
Accessibility
The fit between the locations of providers and patients
Accommodation
The individuals’ ability to pay
Affordability
The fit between how resources are organized to provide services and the individual’s ability to use the arrangement
Acceptability
The compatibility between:
patients’ attitudes about providers’
and practice characteristics, and
providers’ attitudes toward their
clients’ characteristics and values
1 Health Plan Employer Data and Information Set

5. THE DONABEDIAN MODEL Structure Process Outcomes
Facilities
Licensing
Accreditation
Equipment
Staffing Levels
Staff Qualifications
 Licensure & Accreditation
Training
Delivery System
Distribution of Hospital Beds
and Physicians
The stable characteristics of :
The providers of care
Their tools and resources
Their physical and organizational
settings
Process
Outcomes
The specific way in which care is provided
The effects or results obtained from utilizing the structure and processes of health care delivery
Technical Aspects of Care
Diagnosis
Treatment Procedures
Correct Prescriptions
Accurate Drug Administration
Pharmaceutical Care
Waiting Time
Cost
Interpersonal Aspects of Care
Communication
Dignity and Respect
Compassion and Concern
Patient Satisfaction
Health Status
Recover
Improvement
Nosocomical Infections
Iatrogenic Illnesses (Injuries)
Rehospitalization
Mortality
Incidence and prevalence of
disease