Chapter 12 Flashcards
Cost, Access, and Quality
Reasons for Cost Escalation
Third-party payment Imperfect market Growth of technology Increase in elderly population Medical model of health care delivery Multipayer system /administrative costs Defensive medicine Waste and abuse Practice variations
How does Third-party payment influence the rise in cost
contributes to moral hazard and provider-induced demand because it insulates the consumers against the cost of health care.
Imperfect market
both Q and P remain unchecked (E = Q x P).
Growth of technology
research and development are costly, and are included in healthcare expenditures. This is one reason why the cost of pharmaceuticals has increased at an alarming rate in the US. Once developed, new technology often creates its own demand.
Increase in elderly population
Elderly patient consume more healthcare than younger patients.
Medical model of health care delivery
medical interventions are costlier than prevention and health promotion.
Multipayer system /administrative costs
in a multipayer system are nearly double of what they would be in a single-payer system.
Defensive medicine
additional tests and medical services are used merely as a protection against lawsuits.
Waste and abuse
general waste as well as fraud and abuse of various programs increase costs of health care.
Practice variations
geographic variations in treatment patterns across the country indicate cost-inefficient over-treatment.