0, 5 - (Intro to and) Healthcare

Question 1

Features of healthcare market distinguishing it from other markets

Answer 1

• public good and universal access
• information asymmetry, overdemand (quality of service cannot always be assessed by improvement in health - as results often not related to quality of service)
• supply of healthcare (healthcare characterised by unlimited demand and limited supply
• rapidly increasing costs of healthcare services
• importance of health insurance (development of state policy can influence insurance market)

Question 2

Short-term vs long-term contracts

Answer 2

Short-term (PMI, MMI, HCPs)
- cover typically a year
- can be multiple claims
- claim amounts generally unknown, volatile
- can be delays in reporting and settling claims
- may be sold to individuals / group basis

Long-term (CI, LTCI)
- long-term
- cover usually ceases on claim
- claim amount may be known with certainty
- used for protection against ill-health, death, and savings
- may be sold to individuals / group basis

Question 3

Mutuality, Solidarity, Community Rating

Answer 3

• Mutuality refers to the insurance concept where premiums are based on risk presented by policyholder and claims are paid out of pooled fund in accordance with policyholder agreement
• health insurance products do not bode well with this concept - risk assessment may result in high-risk individuals not being able to get cover, thus going against universal access
• solidarity and community rating concepts used instead
• premiums are set equally, losses are paid according to need
• challenge is that individuals cannot be discriminated on risk profile, likely to result in adverse selection
• subsidies may be considered for individuals who are not able to afford premiums

Question 4

Healthcare

Answer 4

The diagnosis, treatment, prevention of disease, illness, injury and other physical and mental impairments in human beings
- delivered by practitioners in allied health, dentistry, obstetrics, medicine, nursing, optometry, pharmacy
- may be categorised by primary, secondary or tertiary care

Primary care
- work of health professionals who act as first point of consultation
- involves the widest scope of healthcare: patients of all ages, seeking to maintain optimal health, all socioeconomic status, location

Secondary care (used synonymously with hospital care)
- healthcare services provided by medical professionals who do not have first contact with patients
- for example, cardiologists, urologists, dermatologists
- may require referral from primary care
- allied health professionals (physical therapists, OTs, speech therapists, dieticians) generally also work in secondary care

Tertiary care
- specialised consultative healthcare
- for example, neurosurgery, cancer management, plastic surgery, treatment for burns,

Question 5

Well-functioning healthcare system requires

Answer 5

• Robust financing mechanisms
• Well-trained and adequate workforce
• Reliable information on which to base decisions and policies
• Well-maintained and logistics to deliver quality medicines and technologies

Question 6

Supply-side key providers

Answer 6

Provision of effective and efficient healthcare requires interaction between:
- doctors
- nurses
- hospitals
- support medical personnel and clinical medical associates
- upstream service providers (pharmaceutical manufacturers, distributors, medical equipment suppliers)

Question 7

Main users of private hospitals

Answer 7

• individuals with healthcare insurance
• individuals who can afford significant out-of-pocket payments
• beneficiaries of government-managed compensation funds
• foreign patients

Question 8

Funders of healthcare

Answer 8

• state
• non-government organisations, donors
• out-of-pocket expenditure
• commercial insurance products
• trade-related employer groups / employers

Question 9

Out-of-pocket expenditure includes

Answer 9

1. Payment by users of commercial health insurance via co-payments, pay for services if threshold payments have been met, fund difference between actual and covered price of procedures (CBT)
2. Payments by those who do not have commercial health insurance products
3. Payments for medical services that are not invoiced - e.g. midwives, traditional treatments

Question 10

How employees contribute to employee health

Answer 10

• full/ part payment of insurance products like medical aid contributions
• full/ part payment of bargaining council premiums
• payment for off and on-site health services
• wellness programmes
• payment for acute medical treatment
• payment to social security funds