2 - International Comparison

Question 1

Define healthcare

Answer 1

• Prevention, tx, and management of illness
• Preservation of mental and physical well-being through the services offered by the medical and allied health professions

Question 2

Define healthcare system

Answer 2

Set of agencies and relationships that lead to the delivery of healthcare

Question 3

Describe principles of production function

Answer 3

• Production function can loosely apply to an individual and more accurately to society as a whole
• Production function is subject to “diminishing returns”
• • As greater amounts are invested into the system, the incremental impact of each unit becomes less
• • At high levels of health care, the curve flattens out, so the marginal health improvement approaches zero (called “flat of the curve” medicine)

Question 4

What is the purpose of stewardship in a healthcare system?

Answer 4

Provides guidelines and standards that must be upheld (ex: drugs are Rx and can’t just be purchased; surgeons must sterilize instruments)

Question 5

How do healthcare systems in different countries differ?

Answer 5

• Financing for healthcare
• Provision of healthcare services
• Payments for healthcare services
• Effectiveness of healthcare services

Question 6

Describe the “tax-funding” type of healthcare system

Answer 6

• Majority of cost of collectively provided healthcare is paid out of direct and indirect taxation
• “Single-payer” model
• Ex: Canada, UK

Question 7

Advantages to the tax-funding healthcare system

Answer 7

• Generally uniform standards of healthcare provision
• Generally uniform access to healthcare services
• Reduced administrative costs for provision of services

Question 8

Disadvantages to the tax-funding healthcare system

Answer 8

• Subject to economic changes w/in the country
• Subject to the will of the electorate in the country
• Politicization of healthcare delivery

Question 9

Describe the “social insurance” type of healthcare system

Answer 9

• Funds raised through a non-government or quasi-governmental bodies, w/ fixed membership charges or membership charges linked to wages
• Ex: Belgium, Germany, France

Question 10

Advantages to the social insurance healthcare system

Answer 10

• Generally uniform standards of healthcare provision
• Generally uniform access to healthcare services
• Reduced administrative costs for provision of services

Question 11

Disadvantages to the social insurance healthcare system

Answer 11

• Subject to economic changes w/in the country, specifically in the job market
• Challenges in dealing w/ marginalized populations (ex: unemployed)

Question 12

Describe the “private insurance” type of healthcare system

Answer 12

• Premiums are individualized and generally risk rated (greater risk = pay more)
• Can be conventional market insurance (no outside manipulation) or controlled private insurance (some artificial manipulation to achieve social equity)
• • Controlled prevents insurance companies from not covering pre-existing conditions
• Ex: US (formerly conventional, then controlled, now shifting to conventional), Switzerland (controlled)

Question 13

Advantages to the private insurance healthcare system

Answer 13

High standards and access of healthcare provision (for some)

Question 14

Disadvantages to the private insurance healthcare system

Answer 14

• Generally non-uniform access to healthcare services

- High administrative costs for provision of services

Question 15

Describe the “co-payment or user fees” type of healthcare system

Answer 15

• Almost every country has some element of direct payment for collectively funded healthcare services
• Refers to any payments made for care
• Found in all of the different funding structures
• Exists to partially fund the system, but mainly to combat “moral hazard”
• Most countries have this, except Canada

Question 16

Define moral hazard. What are the 2 forms?

Answer 16

• How an individual may change how they utilize healthcare services based on whether they have to pay or not
• Ex-ante and ex-poste

Question 17

Describe ex-ante moral hazard

Answer 17

Changes to the probability of requiring healthcare services based on whether you pay or not (ex: whether or not you choose to play a sport based on if you have to pay if you get injured)

Question 18

Describe ex-poste moral hazard

Answer 18

Changes in the use of healthcare services based on whether you pay or not

Question 19

Describe the fees per patient or service type of payment for health services

Answer 19

• Most common method of payment

- Used in specialist services in hospital, pharmacy, individual clinician practice

Question 20

Advantage of fees per patient or service type of payment for health services

Answer 20

Encourages efficient delivery of service

Question 21

Disadvantages of fees per patient or service type of payment for health services

Answer 21

• Potential quality concerns

- Supplier induced demand

Question 22

Describe the capitation fees and salaries type of payment for health services

Answer 22

Payment based on population served rather than specific services rendered

Question 23

Advantages of capitation fees and salaries type of payment for health services

Answer 23

• Easy to administer

- System can be incented to specific endpoints

Question 24

Disadvantage of capitation fees and salaries type of payment for health services

Answer 24

Volume and access concerns

Question 25

Describe the block grants type of payment for health services

Answer 25

Larger payments made for a range or a number of services

Question 26

Advantages of block grants type of payment for health services

Answer 26

• Easy to administer

- Encourages efficient delivery of defined services

Question 27

Disadvantages of block grants type of payment for health services

Answer 27

• Comprehensive provision concerns
• Risk of “cream skimming” (ex: get a lump sum of money for doing 1000 hip replacements; cream skimming = only doing replacement on healthier people)

Question 28

Describe the direct payment by patient type of payment for health services

Answer 28

Generally a small component of healthcare payment in industrialized countries for necessary services

Question 29

Advantage of the direct payment by patient type of payment for health services

Answer 29

Rapid access of services for those who can afford

Question 30

Disadvantages of the direct payment by patient type of payment for health services

Answer 30

• Equity concerns

- Information asymmetry

Question 31

Describe the financing of healthcare services in Canada

Answer 31

• Most “essential” services financed through direct and indirect taxation
• Private insurance for non-tax funded services
• No use of social insurance

Question 32

Describe the payment for healthcare services in Canada

Answer 32

• Absence of user payment in select publicly funded services (hospital, emergency, primary care)
• Extensive use of user payments in other services (pharmacy, optometry, dentistry)
• Predominant fee-for-service reimbursement to clinicians working in primary care
• Predominant salary reimbursement to clinicians working in tertiary care
• Direct payment by pt unusual but pockets of it occurring in specific areas (ex: diagnostic imaging)

Question 33

Describe the financing of healthcare services in United States

Answer 33

• Tax-funded system for specific pt populations (ex: military, low-income seniors)
• Unregulated private insurance for all other groups until 2013
• 2013 = affordable care act created a social insurance option and controls on private insurance
• 2017 = key controls on private insurance removed

Question 34

Describe the payment for healthcare services in United States

Answer 34

• Minimal user payment in tax-funded services
• User payment is ubiquitous in people w/ private insurance plans and will remain in the social insurance plan (at varying levels depending on income)
• Predominant fee-for-service reimbursement to clinicians working in independent for-profit primary and tertiary care centers
• Predominant salaried reimbursement to clinicians working in for-profit HMO organizations
• Direct payment very common at both ends of the financial spectrum (for very different reasons)

Question 35

Describe the financing of healthcare services in the Netherlands

Answer 35

• Highly controlled private insurance market (guaranteed issuance of basic health services; universal coverage by individual mandate; all enrolees charged the same amount)
• Private insurance for supplemental services
• No use of social insurance

Question 36

Describe the payment for healthcare services in the Netherlands

Answer 36

• User payment allowed for all services
• Predominant fee-for-service reimbursement to clinicians working in primary care
• Block grants becoming standard for provision of tertiary services and some primary services
• Direct payment by pt now uncommon

Question 37

Describe efficiency of the healthcare system

Answer 37

• How efficient the system is at funding its services (tax based vs. insurance based)
• How efficient the system is at delivering its services (technical efficiency vs. allocative efficiency)

Question 38

Define technical efficiency

Answer 38

System that delivers a given service at minimum cost

Question 39

Define allocative efficiency

Answer 39

System that delivers what consumer wants at a minimum cost

Question 40

Describe equitability of the healthcare system

Answer 40

• Equity of fundraising (does the system equally divide the funding of the healthcare system based on ability to pay, or is payment based on level of health)
• Equity of access (do similar px wait similar times for similar tx)
• Equity of outcomes (does any subset of the pt population enjoy substantially better health outcomes than another)