Various formulas that insurance companies use to show prospective insurance applicants the cost of different insurance policies.

Ongoing process used by government programs and managed care plans to keep costs within a certain budget and reduce expenditures. Types of cost curtailing activities include reducing administrative costs, controlling use of health care services, limiting demand for medical services, and managing other situations that add to higher costs. Various strategies used to keep costs down are capitation, disease management, preventive care, and wellness programs.

Arrangement between a managed care plan and Centers for Medicare and Medicaid Services (CMS), under which the health plan provides health services and is reimbursed its costs. The beneficiary can use providers outside the plan’s provider network.

Efficiency and competence of an insurance plan or program in achieving given intervention outcomes in relation to the program or plan costs. For example, the production of services with the least possible cost or treatment of a medical condition with the least expensive level of care that obtains the desired health outcome of the patient. Also called cost efficiency.

Method used to compare the costs of similar plans of life insurance. Policies with smaller index numbers are usually a better buy than comparable policies with larger index numbers.

In the Medicare program, this is a measurement of the differences across geographical areas of the cost of operating a medical practice.

Typical case that has an extraordinarily high or extremely low cost when compared with most discharges classified to the same diagnosis-related group (DRG).

Review by a professional review organization (PRO) for the necessity of a patient’s hospital admission and to determine whether all services rendered were medically necessary. Cost outlier cases are recognized only if the case is not eligible for day outlier status.

Average amount of money a company spends to acquire one new customer.