15.) USA Healthcare Flashcards
What is the basic structure of the US model of healthcare?
Private health insurance centred around employer based insurance for the non elderly and non poor. Partial universal insurance, subsidised in the form of Medicare for the elderly and Medicaid for the poor. Most hospitals and doctors are private. Also a large group who are uninsured.
What are the characteristics of a employer-sponsored insurance scheme?
Lower salaries, tax break on health insurance as not given to employees as actual income. Combats adverse selection by providing a reason for employees to pool together.
What is wage pass-through?
The costs of the premiums are taken out of the worker’s wages. There is evidence of more wage pass-through for women and obese workers etc. as there health expenditure is likely to be higher. This is not discrimination, it separates employees by observable risk.
Despite subsidising high-risk employees why do low-risk employees stay with their current employers?
They are over-paying for insurance. They can only leave by quitting jobs entirely (no option to opt out). They may have specific skills and knowledge only suitable to that particular role, so leaving would mean moving onto a lower salary.
What is indemnity insurance?
Fee-for-service (FFS) customers receive health care and then the insurance company pays the doctor or hospital a fee for the service provided. Problems with moral hazard and physician induced demand. Expensive and inefficient
What is a managed care plan?
Health insurance plans that reduce moral hazard and PID, reduce health expenditures and charge lower premiums.
What are the characteristics of a managed care plan?
Gatekeeping: patients only visit specialists or surgeons after receiving approval from a primary care doctor
Coverage networks and vertical integration: receive care from a list of providers
Monitoring: for costs and health outcomes
Salaries and fixed payments: insurer pays a fixed amount for care, not FFS
Denials of coverage: care may not be covered if it is not cost-effective.
What does the data say about the differences between indemnity insurance and managed care plans?
No difference in health outcomes, strong evidence that vulnerable populations are worse off under managed care plans. Evidence of cost savings under managed care, manage care plans attract healthier customers (adverse selection)
