Biomaterial Database

How companies tackle health care costs: Part II. 1985

R E Herzlinger

In this continuing examination of responses to the growing costs of health care, based on a survey of more than 200 large companies, the author discusses the results of employers' efforts to trim these expenses. Most companies have chosen to meet the cost-cutting challenge by changing demand--that is, by redesigning their health insurance policies--and by changing the suppliers of health care services. After a critical analysis of these mechanisms, the author concludes that most of these strategies do little more than shift the costs from one payer to the next. To affect the total cost of the system, she maintains the business sector must use its power to bring about changes in the reimbursement of providers and in the underlying structure of the health care system.

UI	MeSH Term	Description	Entries
D007221	Industry	Any enterprise centered on the processing, assembly, production, or marketing of a line of products, services, commodities, or merchandise, in a particular field often named after its principal product. Examples include the automobile, fishing, music, publishing, insurance, and textile industries.	Tertiary Sector,Industries,Sector, Tertiary,Sectors, Tertiary,Tertiary Sectors
D007348	Insurance, Health	Insurance providing coverage of medical, surgical, or hospital care in general or for which there is no specific heading.	Group Health Insurance,Health Insurance,Health Insurance, Voluntary,Health Insurance, Group,Health Insurances,Insurance, Group Health,Insurance, Voluntary Health,Insurances, Health,Voluntary Health Insurance
D011243	Preferred Provider Organizations	Arrangements negotiated between a third-party payer (often a self-insured company or union trust fund) and a group of health-care providers (hospitals and physicians) who furnish services at lower than usual fees, and, in return, receive prompt payment and an expectation of an increased volume of patients.	Organizations, Preferred Provider,Preferred Provider Organization,Organization, Preferred Provider
D003363	Cost Control	The containment, regulation, or restraint of costs. Costs are said to be contained when the value of resources committed to an activity is not considered excessive. This determination is frequently subjective and dependent upon the specific geographic area of the activity being measured. (From Dictionary of Health Services Management, 2d ed)	Cost Containment,Containment, Cost,Containments, Cost,Control, Cost,Controls, Cost,Cost Containments,Cost Controls
D003625	Data Collection	Systematic gathering of data for a particular purpose from various sources, including questionnaires, interviews, observation, existing records, and electronic devices. The process is usually preliminary to statistical analysis of the data.	Data Collection Methods,Dual Data Collection,Collection Method, Data,Collection Methods, Data,Collection, Data,Collection, Dual Data,Data Collection Method,Method, Data Collection,Methods, Data Collection
D004526	Efficiency	Ratio of output to effort and or resources, or the ratio of effort and or resources produced to energy expended.	Productivity
D006075	Governing Board	The group in which legal authority is vested for the control of health-related institutions and organizations.	Board, Governing,Boards, Governing,Governing Boards
D006264	Health Benefit Plans, Employee	Health insurance plans for employees, and generally including their dependents, usually on a cost-sharing basis with the employer paying a percentage of the premium.	CHAMPUS,Employee Health Benefit Plans
D006279	Health Maintenance Organizations	Organized systems for providing comprehensive prepaid health care that have five basic attributes: (1) provide care in a defined geographic area; (2) provide or ensure delivery of an agreed-upon set of basic and supplemental health maintenance and treatment services; (3) provide care to a voluntarily enrolled group of persons; (4) require their enrollees to use the services of designated providers; and (5) receive reimbursement through a predetermined, fixed, periodic prepayment made by the enrollee without regard to the degree of services provided. (From Facts on File Dictionary of Health Care Management, 1988)	Group Health Organizations, Prepaid,HMO,Prepaid Group Health Organizations,Health Maintenance Organization,Organizations, Health Maintenance,Organization, Health Maintenance
D006288	Health Planning Organizations	Organizations involved in all aspects of health planning activities.	Centers for Health Planning,Organizations, Health Planning,Planning Organizations, Health,Health Planning Organization,Organization, Health Planning,Planning Organization, Health