Jargon Buster & Glossary

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1	Term	Definition
2	activity-based payment	A system of paying hospitals and other providers on the basis of the work they do.
3	aggregate	Aggregate data are high-level data composed by combining other more individual data
4	asymmetry of information	Unequal knowledge about health and/or care. This is one of the reasons the market for health may fail and why governments often intervene to improve the way supply and demand interact.
5	baseline	The starting point in a study to which changes in outcomes are compared.
6	best practice tariffs (BPTs)	Prices for specific types of care that encourage and reward care that is clinically and cost-effective.
7	blended payment	A blended payment consists of a fixed amount (linked to expected levels of activity) and a volume-related element that reflects actual levels of activity.
8	capitation	Capitation is a payment system where providers receive budgets based on the number of patients in a target population. The per capita amount is often adjusted by age and sex, and sometimes other factors.
9	compatibility (of models)	Changes in policy can be examined in a consistent way between the models
10	complementarity	Relates to the idea that two factors (e.g. two different services, or two types of care professionals) when combined can achieve a different effect on a desired objective (e.g. improving health status and wellbeing) than each of the factors separately.
11	conceptual	A conceptual framework is a set of ideas, assumptions or beliefs (concepts) that are related to each other in a logical way.
12	contract theory	A theory about how organisations trade with each other
13	contractible	Generally something is contractible if it is capable of being specified and enforced through a contract. In order for a contract to be enforceable it is usually a requirement that a third party can verify whether the required action or delivery has been undertaken. So the number of patients treated is contractible, but the care taken during treatment is typically not.
14	cost neutral	An action or policy intervention that does not increase (or decrease) the cost of providing services or goods. So changing the way that something is paid for, but not the amount paid is a cost neutral.
15	crowding out	When one form of action or delivery reduces another. For example it is a concern that government investment spending ‘crowds out’ private spending.
16	data governance	Overall management of the availability, usability, integrity and security of information.
17	decomposition	This is the breakdown of an outcome of interest into component parts. Healthcare expenditure may be decomposed into factors that determine the treatments provided that form the component parts of total expenditure. It is mostly used when considering factors that explain changes in outcomes over time or across groups, for example by sex.
18	dynamics	Dynamics usual refer to the way in which outcomes of interest change over time. For example, a dynamic model of healthcare utilisation might study the way healthcare expenditures increase towards end of life.
19	efficiency	Relates to the extent to which resources (for instance, hours of care, or equipment and labour required for providing a specific treatment) produce outcomes (for instance, improvement in health status and/or wellbeing of individuals). More efficient processes require fewer resources to produce the same outcomes.
20	empirical	An empirical study is one that uses data collected from the real world
21	empirical	Based on, concerned with, or verifiable by observation or experience.
22	endogenous	Usually descriptive of a characteristic of a variable in an economic model. A variable is endogenous if determined by variables in the same model.
23	EQ-5D	A standardised way of measuring health-related quality of life on 5 dimensions (5D) developed by the EuroQOL group (EQ).
24	equity	Health equity means everyone having a fair opportunity to live a long, healthy life. Healthcare inequities are differences in how much healthcare individuals consume that are not due to differences in their need for healthcare.
25	exogenous	Usually describes a characteristic of a variable in an economic model. A variable is exogenous if it is not determined by variables in the same model, but depends on factors outside the model.
26	expressed demand	Demand for health or social care that is expressed by the patient or service user.e.g. by attending a GP practice to ask for health care.
27	externalities	An external effect that arises when the actions of one individual or group impact others (positively or negatively)
28	extrapolation	Using statistics to estimate an unknown (future) value by projecting from known (past) values
29	fiscal sustainability	Costs to public funds can be met without significant tax increases or significantly increased borrowing
30	fixed cost	A cost that does not vary with output rate.
31	fixed effect	A statistical way of adjusting analyses so they account of factors that do not change over time (time invariant)
32	Healthcare Resource Group (HRG)	A method of classifying patients according to health conditions, procedures received. Groups are similar in terms of the resources used.
33	heterogeneity	Differences or variation across the units studied
34	incentive scheme	A financial or non-financial scheme designed to encourage certain types of behaviour
35	inequalities	Health inequalities are differences in health between groups of people e.g. rich vs. poor, old vs young. These differences are not 'unfair' if they are due to differences in need for healthcare.
36	infrastructure	The basic physical structures and facilities needed for a healthcare system to operate (e.g. GP surgeries, hospitals, technology). Also known as fixed assets.
37	instrumental variable (IV)	The instrumental variable approach is a method used to uncover the true cause-and-effect relationship between two variables when a direct connection might be biased or confounded by other factors. It does this by using a third variable (the "instrument") that influences the cause but is unrelated to the confounding factors, helping isolate the true effect.
38	interaction	In statistics, an interaction between two factors that are both thought to affect an outcome can be measured. For example, age and ethnicity may both independently affect health outcomes but their interaction may have an additional effect.
39	interval needs	A classification of dependency based on the frequency during the week or day in which the person needs help
40	intrinsic motivation	An impetus to act that comes from within an individual -- their inherent desire to do something. Often contrasted with extrinsic motivation which may come in the form of a reward. It is sometimes argued that rewards reduce intrinsic motivation. See crowding out above.
41	Latent Class Analysis (LCA)	A statistical method of grouping cases into classes (categories) of an unobserved (latent) variable on the basis of their responses to a set of observed variables.
42	Machine learning	The use of statistics to find patterns in large amounts of data.
43	macroeconomics	The branch of economics that deals with the structure, performance, behaviour, and decision-making of the economy as a whole.
44	marginal benefit	The changed benefit from increasing or reducing the rate or volume of an activity.
45	marginal cost	The cost of producing one more unit of a good
46	marginal cost	The changed cost from increasing or reducing the rate or volume of an activity.
47	microeconomics	The branch of economics that studies the behaviour of individuals and firms in making decisions on the use of scarce resources and the interactions among these individuals and firms.
48	microsimulation	A statistical method for creating a set of fictional people with defined characteristics and ‘following’ them as they age. Used to answer ‘what if’ scenarios.
49	model	A simplification of a complex reality expressed in algebra. The algebra expresses how different variables are (and are not) related.
50	morbidity compression	The theory that the burden of lifetime illness may be compressed into a shorter period at the end of life.
51	National Tariff	The national tariff is a set of prices and rules used by providers of NHS care and commissioners to deliver the most efficient, cost effective care to patients. The National Tariff Payment System replaced Payment by Results (PbR).
52	normative	To do with value judgments (subjective rather than objective)
53	objective function	A function (equation) where the outcome is to be maximised (e.g. health), subject to various constraints (such as the budget)
54	omitted variable	A variable that could affect an outcome that is being studied but that is omitted from the analysis. This might mean the results of the analysis are unreliable.
55	parameter	Numbers used to define relationships between variables in an equation.
56	Patient Reported Outcome Measure (PROM)	A measure of patient self-reported health
57	pay for performance (P4P)	A form of reimbursement of doctors or organisations under which remuneration moves in part directly in line with their performance on a set of indicators.
58	pooled budgets	Budgets from two or more separate organisations that are grouped into a single budget.
59	positive	To do with ‘facts’ based on empirical methods.
60	Principal agent theory	A theory about the way principals (patients or clients) and their health care professionals (agents) relate. Because the agent knows more about health and care than the principal, the agent acts on behalf of the principal.
61	projections	Estimates of future levels of (for example) health care or social care expenditure produced on the basis of specified data and assumptions.
62	proxy / proxies	A proxy variable is a variable that is used in place of a variable that cannot be directly measured or observed, e.g. illness is a proxy for 'need'.
63	quantitative	Quantitative research is research that is based on measured quantities (amounts).
64	regression analysis (or regression model)	A statistical process for working out the relationship between a dependent variable (the outcome we want to explain) and one or more independent variables (or explanatory factors). Regression analysis can be used to try to identify cause and effects or for prediction and forecasting.
65	scenario modelling	A mathematical way of working out what might happen if certain conditions occurred.
66	stochastic	Affected by a random events, unpredictable
67	substitutability	Relates to the extent to which it is possible to substitute one type of resource for another in order to produce the same outcome. For instance, in the social care area, help with meals can be achieved by a personal assistant cooking food in place, or by delivering hot meals from a local caterer.
68	supplier induced demand	Demand for health care that is invoked by the supplier rather than by patient need
69	theoretical	A theoretical framework is a set of ideas based on a (usually, published) theory or theories.
70	threshold	The term has various meanings depending on context: 1. A cost-effectiveness boundary defining how much society is willing to pay for one unit of health gain from a new technology. This can determine whether or not the NHS provides that technology. 2. A boundary above or below which payments or taxes change.
71	transaction cost	A cost associated with the process of buying and selling (transacting). As the NHS has developed internal markets these are costs that have come under scrutiny.
72	variable cost	a cost that varies with the level of output.
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