US HealthCare Terminologies Explained — Part 1

6 min readMar 19, 2023

While working in information technology, I recently faced the US Healthcare Data for a Machine Learning project. I have an Engineering background so it becomes hard for me to grab healthcare ecosystem and associated terminologies at first. Gradually, I learned about healthcare ecosystems and terminologies with the help of colleagues and internet. Being passionate on sharing and contribution, I couldn’t stay without writing about it. This is what you are looking for: the series of blog post on healthcare ecosystem and terminologies to reduce your barriers on learning.

You may know that the spending on US healthcare is very high than other nations having similar populations and obviously, it has many potentials to work with.

source: www.statista.com(original: oecd)

The healthcare system comprises Patients, doctors and Insurance Companies. Since the expenditure is very high in healthcare so many insurance companies are spending on healthcare informatics in order to reduce their pay for plans.

To completely understand the healthcare ecosystem you must understand the basic terminology associated with healthcare. In this blog, I will try to explain the basic terminologies associated with US Healthcare.

Patient: Patient refers to a person who goes to the doctor for treatment/service.
Provider: Provider refers to the organization that treats the patients such as Hospital, clinic etc.
Insurance Company: Insurance company refers to the companies that cover expenses the policyholder incurs from damages to health or property and financial losses like a loss of income.
Subscriber/Policyholder: Subscriber refers to the person who subscribes Policy from the insurance company by paying a regular premium to minimize probable future risks.
Dependent: Dependent is a person who is eligible for coverage under a policyholder’s health insurance coverage. Example: Insurance coverage for the family of the policyholder, such as spouses, children, partners etc.
Guarantor: Guarantor refers to the person who is ultimately responsible for the patient’s bill. This person is not necessarily the same as the subscriber. If the patient is a child, then the guarantor might be the child's parent or legal guardian.
Practice: Practice refers to a place where the services are performed. Examples: Pain management centre of Georgia, Andrew Spencer Clinic etc.
Demographic Information: Demographic Information refers to socioeconomic information that describes the features or characteristics of the individual or population such as name, sex, race, address, employment, income, education etc.
PCP(Primary Care Physician/Primary Care Provider): PCP refers to the healthcare professionals(Doctors) who practice general medicine and see the patient for the first time for disease or illness and refer it to a specialist. In US Healthcare, some insurance plans must require a PCP. Examples: Family Doctors, Family Physician etc.
Specialist: A specialist is a person who has a speciality in a particular field. In Healthcare, Specialist refers to Doctors who specialize to treat a particular type of disease or organ. Example: Cardiologist, Gynaecologist, Neurologist etc.
Referral: You may know that referral refers to directing a patient to a medical specialist. In some insurance plans, a patient must be referred by PCP before being seen by a Specialist.
Authorization: Authorization refers to the process where the providers(Hospitals) determine the coverage of the plan, and the payer(Insurance) authorizes to pay for the rendered service or treatment.
Plan: Plan refers to the special type of benefits and coverage offered by an insurance company. In general, an insurance plan outlines the benefits that the insurance company(insurer) will pay for, the deductibles and copayments required, and any restrictions on the services covered.
Plan ID: Plan ID is a unique identifier assigned to a health insurance plan. Plan ID is used to distinguish one plan from another plan.
Plan maximum/Plan Limit/Benefit maximum: A plan maximum is a maximum amount that the insurance policy will pay for covered services or expenses.
Plan Type: Plan type refers to the specific type of healthcare coverage you have enrolled in. There are several types of health insurance plans, each with their own benefits, limitations, and costs.
Policy: A health insurance policy is a legal contract between you and the insurance company that outlines the terms and conditions of insurance coverage. The policy explains what is covered under the plan, the exclusions and limitations of coverage, the procedures for filing claims, and the rules for cancelling or renewing your coverage.
Premium: Premium is an amount paid periodically(monthly/quarterly/annually) to the insurer(insurance company) by the insured(policy subscriber) for covering his/her risks.
Medicare: Medicare is a government national health insurance program in the United States. It is the U.S. federal health insurance program for people aged 65 years or older and people with certain disabilities. Medicare pays for hospital stays, medical services, and some prescription drugs but people who receive Medicare must pay part of their healthcare costs.
Medicaid: Medicaid is a joint federal and state program that provides coverage for some low-income people, families and children, pregnant women, the elderly, and people with disabilities.
In-network providers: A provider network is a list of doctors, other health care providers, and hospitals that contract with a health insurance carrier(insurance company) to provide medical care to its members.
Out-of-network providers: An out-of-network provider is a doctor or health care provider that does not have a contract set up with your health insurance carrier.
HMO(Health Maintenance Organization): A small network of providers having the requirement to select a primary care provider(PCP) before getting service with a Specialist.
EPO(Exclusive Provider Organization): A small network of providers like HMO but not compulsory to select a primary care provider(PCP) always before getting service with a Specialist.
PPO(Preferred Provider Organization): A large network of providers without being required to select a primary care provider (PCP).
HMO Plan: HMO Plan is a health insurance plan that provides health services through a network of doctors for a monthly or annual fee. In HMO, patients need to choose their PCP, and PCP refers to specialists if needed. HMO only covers In-network services and has lower premiums in comparison to the PPO plan.
PPO Plan: Preferred Provider Organization (PPO) is a health plan that offers a large network of participating providers and facilities so you have a range of doctors and hospitals to choose from. In PPO, patients have the freedom to choose their providers. It covers out-of-network services and has higher premiums in comparison to the HMO plan.

image_credit: https://www.cigna.com/knowledge-center/hmo-ppo-epo

POS(Point of Service) Plan: A point-of-service plan (POS) is a type of managed care plan that is a hybrid of HMO and PPO plans. Like an HMO, participants designate an in-network physician to be their primary care provider. But like a PPO, patients may go outside of the provider network for health care services. When patients go out of the network, they’ll have to pay most of the cost, unless the primary care provider has made a referral to the out-of-network provider.

Image credits: https://pacificpensions.com/hmo-dhmo-ppo-or-pos/

I hope that the above terminologies are helpful to increase your healthcare knowledge. If it is helpful to you, please don’t forget to clap and share it with your friends. See you in part 2…

References

US HealthCare Terminologies Explained — Part 1

Written by Netra Prasad Neupane

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