Exam 2 Flashcards
- Which economic analysis approach has an outcome that is purely monetary (monetary values in the top and bottom of the ratio)?
cost benefit analysis
An externality can have a positive or negative impact. T or F.
T
Moral hazard refers to overutilization of health care services/the utilization of unnecessary health care services because health insurance exists. T or F.
T
An example of cherry picking is when an insurer tries to select the least costly people (the least likely to require a lot of medical care) to enroll in their insurance program. T or F.
T
What are the 2 types of policy analysis?
- prospective policy analysis
- descriptive policy analysis
What are the two qualities of the prospective policy analysis?
it is predictive and prescriptive
What are the 2 main approaches to prospective policy analysis?
- policy options analysis
- policy simulation or forecasting models
What are the 3 main approaches to descriptive policy analysis?
- retrospective analysis
- evaluative analysis
- economic analysis
Policy analysts need to possess ________ analytical skills to evaluate the consequences of alternative policies (statistics, cost-benefit analysis, program evaluation, decision analysis, etc.)
technical
Policy analysts need to understand political and ___________ behavior to be able to predict and perhaps influence the adoption and successful implementation of policies.
organizational
Policy analysts need to process an ___________ framework that can be used to address conflict between clients and the broader public interest
ethical
What are 4 techniques for policy analysis and policy research?
- cost-benefit analysis (CBA)
- cost-effectiveness analysis(CEA)
- cost-utility analysis (CUA)
- policy options analysis
The following is the goal of which policy analyses:
to minimize resource consumption in achieving the objective or maximize the amount of objective achieved given a fixed expenditure of resources in order to preserve resources for other valued and valuable uses.
economic policy analyses
What are the 3 types of economic policy analysis?
CBA
CUA
CEA
What is the purpose of CBA?
to determine which of alternative interventions, designed to achieve the same or different objectives, produces the greatest net monetary benefit
If you were to make CBA a ratio, what would be in the numerator and what would be in the denominator?
units of cost (monetary)/units of benefit (monetary)
If you were to make CEA a fraction, what would be in the numerator and what would be in the denominator?
units of cost (monetary)/unit of desired outcome
If you were to make CUA a fraction, what would be in the numerator and what would be in the denominator?
unit of cost (monetary)/unit of utility
What are cost and benefits measured in?
monetary units
What is the purpose of the CEA?
to determine which of alternative interventions are designed to achieve the same objective
Which economic policy analysis determines which alternative intervention produces the most of the desired outcome for a given level of expenditure?
CEA
Which economic policy analysis determines which alternative intervention cost the least to achieve a given level of expenditure?
CEA
In the CEA, how are costs measured?
in monetary units
In the CEA, how is effectiveness measured?
in a non-monetary unit (desired outcome)
What is the purpose of the CUA?
to determine which of alternative interventions, designed to achieve the same or different objectives
In CUA, how are costs measured?
in monetary units
In CUA, how is utility measured?
in a non-monetary unit, typically on a scale ranging from no utility to complete utility.
Example: life years saved (LYS), quality-adjusted LYS (QALYs)
Will all people place the same utility on the same goods or services?
no
What does utility mean?
- pleasure of satisfaction (value for money) derived by a person from the consumption of a good or service
- subjective or psychic return which cannot be measured in absolute or objective terms
An analysis that provides informed advice to a client that related to a public policy decision, includes a recommended course of action/inaction, and is framed by the client’s powers and values.
policy options analysis
What does a good policy options analysis do?
takes a comprehensive view of consequences and values
What is the weakness of a policy options analysis?
myopia from client orientation and time pressure
What are the 6 steps of a basic policy analysis process?
- verify, define, and detail the problem
- establish evaluation criteria
- identify alternative policies
- evaluate alternative policies
- distinguish among alternatives
- monitor implemented policy
What are the 5 elements of a policy options analysis?
- problem identification
- background
- landscape
- options (with criteria)
- recommendations
Of the 5 elements of a policy options analysis, which one is the key to analysis and frames the issue?
problem identification
Of the 5 elements of a policy options analysis, which does not allow for a yes/no answer and does allow for multiple options to be considered?
problem identification
Of the 5 elements of a policy options analysis, which provides key information/statistics needed to understand the problem being addressed and the options being considered?
background
What is the objective of the background portion of the policy options analysis?
to no only provide information that supports your recommendation
Of the 5 elements of a policy options analysis, which provides political and factual context by identifying key stakeholders and explaining key stakeholder views about salient issues?
landscape
In the options portion of the policy options analysis, all options must be assessed by the same ________.
criteria
All options must be within the client’s ________ and _________.
powers and values
Does all options have pros and cons?
yes
Of the 5 elements of a policy options analysis, which requires you to choose one of the options that were analyzed?
recommendation
What is the application of microeconomic tools to health issues and problems and study of societal allocation of scarce resources for health care?
health economics
What are the 3 key features of health economics?
- scarcity of resources/efficient allocation
- rational decision making
- marginal analysis
Quantity of goods and services that a consumer is willing and able to purchase over a specific time.
demand
What are the 5 things that can change demand?
- price
- income
- quality (perceived and actual)
- substitutes
- complements
What is the price elasticity of demand?
how responsive change in demand is to a one-percent change in price
What defines an inelastic product?
when the price of product changes, the demand for that product does not change
What is it called when people purchase more of goods and services because of the presence of insurance?
moral hazard
the amount of goods or services that producers are willing and able to sell at a given price over a given time.
supply
What are the 4 things that can change supply?
- price of goods
- input costs
- number of sellers
- change in technology
What is the supply elasticity?
percentage change in quantity supplied resulting from a one-percent increase in price of buying the good
is the health care field a perfectly competitive market?
no
What are the 6 aspects of a perfectly competitive market?
- goods offered by sellers largely the same
- many buyers and sellers (price takers)
- all resources are mobile
- firms can freely enter and leave the market
- no government involvement
- perfect knowledge and information
What is it called when resources are not allocated efficiently?
market failure
What are the 5 reasons for market failures?
- imperfect information
- concentration of market power
- consumption of public goods
- presence of externalities
- government interventions
What are the 2 types of public goods?
- non-rival
- nonexclusive