L1: Intro

Question 1

What type of economic good is healthcare?

Answer 1

Necessary

Question 2

What can HC provision be used to explain?

Answer 2

Discrepancies between life expectancy in different parts of country

Question 3

UK spends how much of GDP on HC?

Answer 3

Roughly 9%

Question 4

3 reasons important to stud the economics of health and health systems?

Answer 4

Health is key in everyones lives
HC sector significant size of GDP
Econ. policy on HC is important in HC policy debates

Question 5

Where does the demand for healthcare come from?

Answer 5

It is derived from the demand for ‘health’ since ‘health’ cannot be directly purchased

Question 6

Choice theory of HC decisions?

Answer 6

If value of current choice is less than the value of the forgone alternative, should change decision

In practice this is done using financial costs and cost-effectiveness thresholds

Question 7

3 main characteristics of HC as a good?

Answer 7

1) UNCERTAINTY
2) PATIENTS DO NOT ACT LIKE BUYERS
3) DOCTORS DO NOT ACT LIKE SELLERS

Question 8

Why is HC uncertain? (3)

Answer 8

We don’t know WHEN we will get ill, or how much it will cost, or how our health will respond to the healthcare used

Question 9

Why do patients not act like buyers? (4)

Answer 9

1) Info asymmetry
2) Cannot ‘test’ product before purchasing it
3) Limited possibility to ‘shop about’ for deals
4) HC preferences are mostly ill-defined

PICL

Question 10

Why do doctors not act like sellers? (3)

Answer 10

1) Licensing restrictions
2) Limited advertising allowed
3) Advice from doctors must be: a) divorce from personal interest, b) dictated by clinical need

LLA

Question 11

What two unusual features of the HC market are caused by uncertainty?

Answer 11

1) Insurance
2) Externalities (positive and negative)

TF HC is complex mix of public and private sector activities

Question 12

What are the three core ‘Need’ principles of the NHS?

Answer 12

1) Based on clinical need; not ability to pay
2) Meets needs of everyone
3) Free at point of delivery

Question 13

Example of needs and wants not equal in HC?

Answer 13

Need cancer treatment
Want private room
Tf are not the same thing

Question 14

What are two examples of rules that may be used in HC industry?

Answer 14

1) Treat those with greatest capacity to benefit
2) Generate the greatest TOTAL benefit

(see example in notes)