Healthcare systems

Question 1

HC resources allocation (2)

Answer 1

1. Equity: look for equality of opportunity rather than outcome (fair distribution)
2. 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?

Question 2

In HC systems governments act as regulators by (3)

Answer 2

1. limiting prices
2. regulating insurances
3. making insurance compulsory

Question 3

Types of HC Systems
Private (6)

Answer 3

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

Question 4

Types of HC Systems
Public (6)

Answer 4

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

Question 5

Types of HC Systems
Mixed (5)

Answer 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

Question 6

Challenges to HC provision (2)

Answer 6

1. imperfect information: good care provision, costs, care needed
2. bounded rationality & willpower: information processing & procrastination

Question 7

Challenges to private insurance (3)

Answer 7

1. based on certainty rather than risks: people with certainties are not able to buy insurance
2. Adverse Selection: cream-skimming
3. Moral Hazard: overconsumption

Question 8

In HC, adverse selection results in…

Answer 8

inefficient & inequitable coverage of insurance

Question 9

In HC, moral hazard results in…

Answer 9

inefficient HC demand

Question 10

What is the 3rd Party Payment Problem?
Because…(patients & doctors)

Answer 10

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

Question 11

what does HC require to evaluate the systems?

Answer 11

it requires empirically informed HC systems

Question 12

Evaluating HC systems
Cost Containment

Answer 12

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

Question 13

Evaluating HC systems
Equitable Access

Answer 13

1. Low income
2. Geographical inequalities
3. Medical Conditions

Question 14

Evaluating HC systems
Waiting time
(Nicholas Barr)

Answer 14

1. Delayed diagnosis & response
2. Different waiting times depending on socioeconomic status

Question 15

Evaluating HC systems
Consumers Choice
(Nicholas Barr)

Answer 15

1. Better compliance with treatment when there are choices
2. Different tastes, thus, cannot enforce the same insurance
3. Improve responsiveness & quality of insurances & providers

Question 16

Case Studies
US
Medicare & Medicaid
Problems
Solutions

Answer 16

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

Question 17

Case Studies
US
ObamaCare
Managed Care

Answer 17

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

Question 18

Case Studies
UK
NHS

Answer 18

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

Question 19

Case Studies
NL
Traditional Systems

Answer 19

· 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

Question 20

Case Studies
NL
Dekker Commission, 1987

Answer 20

It proposed a market based reform by enhancing entrepreneurship and consumer choice

Question 21

Case Studies
NL
Health Insurance Act, 2006

Answer 21

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

Question 22

Case Studies
NL
Strength
Weakness (4)

Answer 22

1. GDP grows faster than HC spending

x. rising deductibles
x. reduced supply & increased demand
x. reduced quality of care
x. increase waiting lists