Quality of Life (QOL) Measures: An assessment of how
patients deal with their disease or with their everyday life
when suffering from a particular condition. Quality of life
measures are subjective in the sense that the kinds of information
obtained cannot be measured objectively. They have
been a part of the health care literature for at least 20 years
but have been used in the area of pharmaceuticals only
recently (in the last 5 or 6 years). Through statistical means,
the indices that have been developed to measure various
aspects of quality of life have been validated over time, and
we know that these measures are reliable and reproducible.

Risk Adjustment: A system of adjusting rates paid to managed
care providers to account for the differences in beneficiary
demographics, such as age, gender, race, ethnicity,
medical condition, geographic location, etc.

Self-Funded/Self-Insured: An approach in which employers
pay employee health care costs directly and assume all of the
financial risk and liability that would normally be covered by
an insurance company.

Standard of Care: A diagnostic and treatment process that a
clinician should follow for a certain type of patient, illness, or
clinical circumstance.

Third Party Administrator (TPA): A company that handles
the administration of a program for a group or insurance
company.

Utilization Review (UR): Performed by the health maintenance
organization (HMO) to discover if a particular physician-
provider or other provider (e.g., pharmacy) is spending
as much of the HMO’s money on treatment or any specific
portion thereof (e.g., specialty referral, drug prescribing,
hospitalization, radiologic or laboratory services) as his or
her peers.