Healthcare systems Flashcards
HC resources allocation (2)
- Equity: look for equality of opportunity rather than outcome (fair distribution)
- Efficiency: how to allocate resources
- Macro efficiency: how much to spend?
- Micro efficiency: allocate resources depending on budget
- Productive efficiency: how to get the most out of the given resources?
- Allocative efficiency: where to spend/allocate the budget?
In HC systems governments act as regulators by (3)
- limiting prices
- regulating insurances
- making insurance compulsory
Types of HC Systems
Private (6)
HC financing is organised based on market mechanisms
· based on competition and incentives
· resources are allocated based on supply and demand
· high costs
· no equitable access
· no waiting lists
· consumers have many choices
Types of HC Systems
Public (6)
the government runs the provision and financing of HC
· no fee for HC services
· HC is financed through taxation
· balanced costs
· equitable access
· long waiting lists
· little/no consumer choice
Types of HC Systems
Mixed (5)
government intervenes to balance HC resources but there is role for markets to compete
· private provision & fee for services is managed through social insurance or tax financing
· high HC spending
· equitable access
· short waiting lists
· consumer choice
Challenges to HC provision (2)
- imperfect information: good care provision, costs, care needed
- bounded rationality & willpower: information processing & procrastination
Challenges to private insurance (3)
- based on certainty rather than risks: people with certainties are not able to buy insurance
- Adverse Selection: cream-skimming
- Moral Hazard: overconsumption
In HC, adverse selection results in…
inefficient & inequitable coverage of insurance
In HC, moral hazard results in…
inefficient HC demand
What is the 3rd Party Payment Problem?
Because…(patients & doctors)
is the problem happening when insurance don’t have complete information about the care the patient is receiving, thus, having to pay for it no matter what.
1) patients overconsume HC, if they are insured the service is free (zero private cost)
2) doctors don’t worry if patients will have to pay because they are insured
no socially optimal
what does HC require to evaluate the systems?
it requires empirically informed HC systems
Evaluating HC systems
Cost Containment
Aim: to keep the total HC cost under control, however, it is challenging due to
1. Medical technologies
2. Demographic changes
3. Third Party Payment Problem
Evaluating HC systems
Equitable Access
- Low income
- Geographical inequalities
- Medical Conditions
Evaluating HC systems
Waiting time
(Nicholas Barr)
- Delayed diagnosis & response
- Different waiting times depending on socioeconomic status
Evaluating HC systems
Consumers Choice
(Nicholas Barr)
- Better compliance with treatment when there are choices
- Different tastes, thus, cannot enforce the same insurance
- Improve responsiveness & quality of insurances & providers
Case Studies
US
Medicare & Medicaid
Problems
Solutions
Medicare: insurance for people +65/other conditions
Medicaid: cost coverage for low-income people
· P: publicly financed but privately provisioned => an increase in HC spending & information asymmetries
· S: pay prospectively (government paying a fixed amount to provisioners) to minimise costs
Case Studies
US
ObamaCare
Managed Care
OC: steers market outcomes by regulating & subsidising private HC insurance
- insurance cannot refuse clients with preexisting conditions
- individual mandate
MC: private insurances incentivise provisioners to control costs and prevent moral hazards by
- prior authorisation
- deductibles
Case Studies
UK
NHS
pre1990s: centralised on a top-down approach
After: increase in quasi-competition to improve provision
· For: there is greater consumer choice and competition which enables for better provision quality and lowers costs
x: there is dishonesty and over treatments
Case Studies
NL
Traditional Systems
· low income: public insurance
· high income: private insurance
this system led to economic inbalances due to a lack of motivation, quality and access in HC provision
Case Studies
NL
Dekker Commission, 1987
It proposed a market based reform by enhancing entrepreneurship and consumer choice
Case Studies
NL
Health Insurance Act, 2006
based on managed competition where there is room for insurance and provisions to compete but the government regulates HC systems
· insurances cannot refuse consumers
· community rating: same premiums
· required by law
Case Studies
NL
Strength
Weakness (4)
- GDP grows faster than HC spending
x. rising deductibles
x. reduced supply & increased demand
x. reduced quality of care
x. increase waiting lists
