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September 21, 2025

Competition in the Supply of Healthcare

1) What factors might influence a physician’s ordering of services for patients?

2) What type of physician reimbursement mechanisms can be utilized to reduce services?

3) Describe the diagnosis-related groups (DRG) reimbursement system and how it is designed to function in hospital reimbursement? What factors limit its effectiveness?

4) Complete the table with supply side strategies detailing how they are designed to function and what the known limits/outcomes are of each model.

Cost Containment Strategies

Definition and Mechanism/ what is it designed to do?

Known Limits/failures

(quality, effectiveness, etc)

VBP

Practice Guidelines

Managed Care

ACOs

Utilization Management

PCMHs

Selective Contracting

5) Identify 2 ACO’s in your state/region, describe who operates them (e.g., hospital system?) and their membership size/scope. Use CMS’ ACO site to find ACOs if you do not know.

6) How can market power affect the US Healthcare System, using chapter, lecture and/or powerpoint points to explain your answer? What are some possible policy responses?

7) What is cost shifting and how could we better address it?

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