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Management Term 2 > Health Economics Key Concepts > Flashcards

Health Economics Key Concepts Flashcards

1
Q

Comparison of 2 or more alternative courses of action in terms of both their costs and their consequences

A

Economic evaluation

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2
Q

How are different types of economic evaluation distinguished?

A

From how consequences are measured (different units for outcomes)

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3
Q

An economic evaluation that expresses both costs and outcomes of an intervention in monetary terms

A

Cost Benefit Analysis

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4
Q

In CBA, how are benefits valued?

A

In monetary terms using valuations of people’s observed or stated preferences

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5
Q

An economic evaluation that compares costs and consequences of different interventions using a single outcome measured in natural units. Interventions are compared in terms of cost per unit of outcome.

A

Cost Effectiveness Analysis (cost per unit of effectiveness)

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6
Q

An economic evaluation where benefits are expressed as the number of life years saved adjusted to account for loss of quality from morbidity/side effects from intervention.

A

Cost Utility Analysis

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7
Q

What is the most common measure used in CUAs?

A

QALY - quality-adjusted life year

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8
Q

A subjective threshold used to determine if the intervention studied is cost-effective and/or should be adopted.

A

Cost Effectiveness Threshold

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9
Q

Typical cost effectiveness threshold in the UK?

A

£20,000-£30,000 per QALY

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10
Q

Diagrammatic way of comparing technologies or treatment alternatives.

A

Cost effectiveness plan

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11
Q

What are the 4 different areas in a cost effectiveness plan?

A

Quadrant 1 - intervention more effective + more costly than comparator

Quadrant 2 - intervention more effective + less costly than comparator

Quadrant 3 - intervention less effective + less costly than comparator

Quadrant 4 - intervention is less effective and more costly than comparator

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12
Q

The standard intervention (or lack of intervention) against which the intervention under appraisal is compared.

A

Comparator

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13
Q

The measure of the possible results that may stem from exposure to a preventative or therapeutic intervention.

A

Outcome

- measures may be intermediate endpoints or they can be final endpoints

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14
Q

What does effectiveness refer to in the context of healthcare?

A

Clinical effectiveness

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15
Q

A combination of an individual’s physical, mental, and social well-being; not merely the absence of disease.

A

Health-related quality of life (HRQL)

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16
Q

An index of survival (years gained) that is adjusted to account for the patient’s quality of life during this time.

A

QALY

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17
Q

Why are QALYs favoured over just years-gained?

A

QALYs take into account BOTH quantity and quality of life gained

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18
Q

A standard measure for comparing health outcomes for various health conditions taking into account years of life lost due to premature mortality and years of productive life lost due to disability.

A

DALYs - disability adjusted life years

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19
Q

Average years of life gained per person as a result of an intervention.

A

Life-years gained (often used in CEAs)

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20
Q

The difference between the present value of cash inflows and the present value of cash outflows.

A

Net Present Value

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21
Q

The difference in the mean costs in the population of interest divided by the differences in the mean outcomes in the population of interest.

A

Incremental Cost Effectiveness Ratio (ICER)

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22
Q

If an intervention has higher costs and lower outcomes than an alternative intervention, it is…

A

Being dominated (by the alternative)

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23
Q

If an intervention has lower costs and higher outcomes than an alternative intervention, it is…

A

Dominating (the alternative)

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24
Q

Discounting says what about costs and benefits occurring now and in the future?

A

Costs and benefits incurred today have a higher value than costs and benefits occurring in the future

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25
Q

Based on discounting, does individual preference prefer benefits to be experienced now or in the future?

A

Now

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26
Q

Based on discounting, does individual preference prefer costs to be experienced now or in the future?

A

In the future

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27
Q

The benefit of an option in monetary units minus total cost of the benefit in monetary units

A

Monetary Net Benefit

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28
Q

The benefit of an option in health units minus total cost of the benefit in health units

A

Health Net Benefit

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29
Q

A method used to measure utility where the individual is asked to make a trade-off between having a chronic disease (the state being valued) for a certain period of time, and a gamble with good health for the same period and death.

A

Standard Gamble

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30
Q

A method used to measure utility by finding the point at which the respondent cannot choose between 2 scenarios - usually between illness for a period of time and perfect health for a shorter time, both followed by death.

A

Time Trade-Off

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31
Q

What’s the difference between Standard gamble and TTO?

A

Standard gamble is between illness for a certain amount of time (certain) and the chances of good health for the same amount of time (uncertain).
TTO is between illness for a certain amount of time and good health for a shorter amount of time.

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32
Q

A visual representation of a decision problem intended to help people make better decisions. Made up of nodes indicating a choice by the decision-maker, a probabilistic outcome, or a terminal node.

A

Decision tree

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33
Q

The sum of all the possible outcomes of the probability of the outcome multiplied by the value of the outcome. Can be calculated for both the costs and the benefits of a treatment.

A

The Expected Value

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34
Q

An analysis that identifies how responsive a result is to changes in key economic parameters. Values around key parameters are varied in the analysis to test how much results respond to these changes.

A

Sensitivity Analysis

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35
Q

Amount of a good that buyers are willing and able to purchase

A

Quantity demanded

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36
Q

Tabulated relationship between price and quantity demanded

A

Demand schedule

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37
Q

Graphical relationship between price and quantity demanded

A

Demand curve

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38
Q

All individual demands for a particular good or service added together through horizontal summation.

A

Market demand

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39
Q

Law of demand?

A

Quantity demanded of a good decreases as price of good increases

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40
Q

The increase in output that arises from one additional unit of input.

A

Marginal product

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41
Q

The fall in the rate-of-increase in output of a process as the amount of an input is increased, while the amount of other inputs is held constant.

A

Diminishing marginal product

42
Q

A curve showing all the different quantities of 2 inputs which may be used to produce a given level of output.

A

Isoquant

43
Q

The amount by which the quantity of one input has to be reduced when one extra unit of another input is used, so that output remains constant.

A

Marginal rate of technical substitution (MRTS)

44
Q

Costs that vary with the quantity of output produced.

A

Variable costs

45
Q

Total revenues minus total costs

A

Profit

46
Q

The increase in total cost that arises from an extra unit of production.

A

Marginal cost

47
Q

Variable cost divided by the quantity of output.

A

Average variable cost

48
Q

The quantity of one product that must be foregone in order to obtain more of another product without varying the input level.

A

Rate of product transformation

49
Q

Graph that compares the production rates of two goods that use the same fixed total of the factors of production (inputs).

A

Product transformation curve of Product possibilities frontier

50
Q

Total cost divided by the total quantity

A

Average cost

51
Q

Fixed cost divided by the quantity of output

A

Average fixed cost

52
Q

The locus traced out by various combinations of 2 inputs, each of which costs the producer the same amount of money.

A

Isocost line (this is to producers what the budget line is to consumers)

53
Q

The combination of inputs which will cost the firm the least and thus yield maximum profits.

A

Producer equilibrium

54
Q

How is the producer equilibrium found on a graph?

A

The point where the highest isoquant is tangent to the isocost line

55
Q

Amount sellers are willing and able to sell

A

Quantity supplied

56
Q

Consumer surplus + producer surplus. All gains from trading goods in a market.

A

Total surplus

57
Q

Tabulation of relationship between price and quantity supplied

A

Supply schedule

58
Q

The amount a seller is paid for a good minus the seller’s cost of providing it

A

Producer surplus

59
Q

Graphical representation of relationship between price and quantity supplied

A

Supply curve

60
Q

The amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

A

Consumer surplus

61
Q

Law of supply?

A

The quantity supplied of a good increases when the price of that good increases

62
Q

What does economic welfare refer to?

A

How the allocation of resources affects economic wellbeing

63
Q

The horizontal summation of all individual firms’ supply

A

Market supply

64
Q

The maximum amount that a buyer will pay for a good

A

Willingness to Pay

65
Q

A situation where the market price has reached the level at which quantity supplied equals quantity demanded

A

Market equilibrium

66
Q

A situation where quantity demanded is greater than quantity supplied

A

Shortage

67
Q

The price that balances quantity supplied and quantity demanded

A

Equilibrium price

68
Q

A situation where quantity supplied is greater than quantity demanded

A

Surplus

69
Q

The quantity supplied and the quantity demanded at equilibrium price

A

Equilibrium quantity

70
Q

Altering incentives so that people take account of the external effects of their actions is an example of…

A

Internalising an externality

71
Q

Societal benefit from the consumption of a good. Equals the private marginal benefit plus the marginal external benefit.

A

Social marginal benefit

72
Q

Societal cost from the production of a good. Equals the private marginal cost plus the marginal external cost.

A

Social marginal cost

73
Q

The uncompensated impact of one individual’s actions on the wellbeing of a bystander.

A

Externality/ies

74
Q

The fall in total surplus that results from a market distortion/failure.

A

Deadweight loss

75
Q

Total revenue divided by the quantity sold.

A

Average revenue

76
Q

The change in total revenue from selling one additional unit.

A

Marginal revenue

77
Q

Government-created monopolies, normally for limited periods.

A

Artificial monopoly

78
Q

How are artificial monopolies formed?

A

Created by governments by mandating entry restrictions

79
Q

A monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could 2 or more firms.

A

Natural monopoly

80
Q

Market structure where there is only one seller. This seller determines the quantity supplied/market-clearing price.

A

Monopoly

81
Q

A market with many buyers and sellers trading identical products so that each buyer and seller is a price taker.

A

Competitive market

82
Q

A situation in which a market left on its own fails to allocate resources efficiently

A

Market failure

83
Q

A change to a different allocation that makes at least one individual better off WITHOUT making any other individual worse off.

A

Pareto improvement

84
Q

An economic allocation where no one party can be made better off without making at least one other party worse off.

A

Pareto efficient

85
Q

If outcomes will occur that a probability that cannot even be estimated, the decision maker faces…

A

Uncertainty

86
Q

A contract or policy where an individual or entity receives financial protection or reimbursement against losses.

A

Insurance

87
Q

How do insurance companies make payments affordable for the insured?

A

By pooling clients’ risks (can’t let price go too high or the whole system collapses as healthy people leave)

88
Q

The money paid to an insurance company for coverage. Paid monthly and can be paid in part/full by your employer.

A

Premium

89
Q

What health insurance plan does and does not pay for.

A

Coverage

90
Q

A shared payment between an insurance company and an insured individual, usually described in percentages

A

Co-insurance

91
Q

A portion of the covered expenses that an insured individual must pay before benefits are paid by the insurance plan.

A

Deductible

92
Q

The act of combining the uncertainty of individuals into a calculable risk for large groups.

A

Risk-pooling

93
Q

A situation in which one party in a transaction has more or superior information compared to another party. Most often seller knows more than buyer but can happen the other way.

A

Asymmetric information

94
Q

The tendency for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party.

A

Adverse selection

95
Q

The tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behaviour

A

Moral hazard

96
Q

Method used by insurers to determine the price of premiums for different groups/individuals based on those people’s history of claims.

A

Experience rating

97
Q

Name of a situation where a person is performing an act for another person.

A

Agent (performer) & Principal (person performed on behalf of)

98
Q

A situation where, due to an asymmetry of information between supplier and consumer/payer, the supplier can use superior information to encourage an individual to demand a greater quantity of the good/service they supply than the Pareto efficient level, should asymmetric information not exist.

A

Supplier-induced Demand

99
Q

Name for payment per service provided

A

Fee-for-service

100
Q

Name for payment per person

A

Capitation

101
Q

Equal treatment for equal need is what type of equity?

A

Horizontal equity

102
Q

Unequal treatment for unequal need is what type of equity?

A

Vertical equity

Management Term 2 (8 decks)

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