When beginning to investigate healthcare, the consumer is sometimes overwhelmed with the enormous amount of information to be processed. To alleviate some of the stress that may be caused by this, New Choice Health has compiled a list of Common Healthcare Definitions.
Charge, Cost, and Price
Charge. The dollar amount a provider sets for services rendered before negotiating any discounts. The charge can be different from the amount paid.
Cost. The definition of cost varies by the party incurring the expense:
- To the patient, cost is the amount payable out of pocket for healthcare services.
- To the provider, cost is the expense (direct and indirect) incurred to deliver healthcare services to patients.
- To the insurer, cost is the amount payable to the provider (or reimbursable to the patient) for services rendered.
- To the employer, cost is the expense related to providing health benefits (premiums or claims paid).
Price. The total amount a provider expects to be paid by payers and patients for healthcare services.
Stakeholders
Care purchaser. Individual or entity that contributes to the purchase of healthcare services.
Payer. An organization that negotiates or sets rates for provider services, collects revenue through premium payments or tax dollars, processes provider claims for service, and pays provider claims using collected premium or tax revenues.
Provider. An entity, organization, or individual that furnishes a healthcare service.
Related Definitions
Out-of-pocket payment. The portion of total payment for medical services and treatment for which the patient is responsible, including copayments, coinsurance, and deductibles.
Price transparency. In health care, readily available information on the price of healthcare services that, together with other information, helps define the value of those services and enables patients and other care purchasers to identify, compare, and choose providers that offer the desired level of value.
Value. The quality of a healthcare service in relation to the total price paid for the service by care purchasers.
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