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Subjected to income and social security taxes cheaper

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subjected to income and social security taxes - Cheaper to buy insurance before taxes than health care after taxes - Out-of-pocket price for health care with insurance lower than without insurance increases demand and reduces concern over prices 3. Fee-for-service - Reimbursement to hospitals and physicians based on costs plus extra fee - This type of payment created few incentives for efficiency or lower-cost approaches 4. Technological advances - New methods of diagnosis and treatment became available - New markets created - More expensive new technology replaced less expensive older methods The end result that had the most significant effect that the rise in prices. Both (1) and (2) had the most significant effect on the rise in prices. 1. Managed Care Backlash in late 1990s Choice over Cost-Savings Employers more concerned with attracting and retaining employees in tight labor market of the late 90s Provider Consolidation increased bargaining power Physicians & hospitals have formed larger groups and systems, gaining negotiating power to resist deeper discounts. Payments rising more rapidly now than in the mid 90s New Technology Managed care slowed but did not prevent the emergence of new, more effective drugs (statins, Lipitor; NSAIDs, Prilosec) Managed Care Backlash & Regulation 96% now in managed care plans - no more cream skimming Widespread media attention to cases of denied care “Drive-through deliveries” led to state mandates of min. LOS 4
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2. One-time Cost Savings - Decreased hospital days - Use of less costly settings for inpatient stays - Lower provider prices 5
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  • Spring '08
  • Harrington
  • medical care

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