Lecture 2

Question 1

Universal Health Coverage (UHC)

Answer 1

All people can use the health services they need, of sufficient quality to be effective, while also ensuring that the use of these services does not expose the user to financial hardship.

Question 2

Trade offs by the government

Answer 2

Health
Wealth
Equity

Question 3

Disability Adjusted Life Years (DALY)

Answer 3

To compare the magnitude and causes of the burden of disease across countries.
Looks at both mortality and morbidity.
> measure how many people die or become disabled by this disease in a given year
> Look at ages of those who died and estimate years of life lost
> look at ages of the disabled and estimated years of disability
> Estimate how much of a year is lost to a disability
> Discount the future at 3 percent (years in future will have less weight in the total package)
> Add death and disability parts together to get DALY

Question 4

Burden of disease

Answer 4

De ziektelast van een bepaalde aandoening, of bij uitbreiding van een gezondheid schadende omstandigheid, is de totale hoeveelheid verlies van gezondheid in een bepaalde populatie die erdoor wordt veroorzaakt. Ziektelast wordt meestal uitgedrukt in DALY of QALY.

Question 5

Strengthts of using DALYs lost as a measure of the burden of disease

Answer 5

> allows for comparisons across countries and over time
includes loss of function as well as death
sees greater harm in diseases that strike earlier on

Question 6

Weaknesses of using DALYs lost as a measure of the burden of disease

Answer 6

> many arbitrary choices (weight of a disease is based on research, but still judgement is involved)
Does not account for pain
does not account for financial impacts (weight might be greater for breadwinners)

Question 7

QALY: Quality Adjusted Life Years

Answer 7

Is used in economic evaluation to assess the value for money of medical interventions. One QALY gained equates to one year in perfect health gained due to an intervention.

Question 8

Government intervenes in different stages of the formation of health

Answer 8

> Health environment
Health inputs and health behaviours
Health care services
Health care financing

Question 9

Government intervenes in different stages of the formation of health through various means

Answer 9

> Regulations
> Information provision
> Public health programs
> Production
> Finance
> Research and development

Question 10

Market failures

Answer 10

Induce a gap between private and social value of services. Most common market failures:
> Market for health service provision
» Imperfect competition
» Asymmetric information

> Market for health insurance: problems with asymmetric information
> Adverse selelectino and underinsurance
> Moral hazard and technology overuse

> Large externalities

> Lack of information

> Behavioral constraints

Question 11

Equality vs equity

Answer 11

equality is about distribution

equity is about fairness

Question 12

Rawls’ social contract

Answer 12

The theory of justice; about organizing the society, how would you distribute resources

Question 13

Benefit incidence analysis (BIA)

Answer 13

Analyzes how spending on health is distributed over different socio-economic groups.
Opzoeken in aantekeningen?

Question 14

Concentration curve

Answer 14

Shows the cumulative share of benefits accruing to a cumulative proportion of individuals
Shows how money is divided
Needs 3 types of data:
1. data to divide in socioeconomic status
2. data on health utilization
3. information of unit costs

> Concentration curve below 45-degree line: pro-rich distribution. Above 45-degree line: pro-poor situation.

Question 15

Arrow’s impossibility theorem

Answer 15

Societies do not necessarily have transitive preferences, even when everyone in them does.
To have transitive preferences, a person, group, or society that prefers choice option x to y and y to z must prefer x to z.

Question 16

The health policy trilemma

Answer 16

Health, wealth, equity

There will never be a perfect health care system where all three goals are maximized

Question 17

Coping with uninsured health shocks

Answer 17

> Self insurance
Informal credit
Informal risk-sharing

Question 18

Household health care financing options

Answer 18

> Adjust labor supply
Postpone large expenditures and investments
Reduced food consumption
Last resort: forego health care all together

Question 19

How to pull risk?

Answer 19

> General taxation
Pay for private insurance
Intermediate (social insurance, other means)

Question 20

Houw should health insurance (risk pooling) markets work?

Answer 20

1. Completely private insuracne markets
2. Universal public insurance
3. Compulsory insurance
4. Employer-sponsored insurance
5. Means-tested health insurance
6. Community-based health insurance

Question 21

Private insurance markets

Answer 21

Prediction by adverse selection: only the least healthy customers are insured fully and much of the population is underinsured.
> Minimizes government involvement.

Question 22

Universal public insurance

Answer 22

Government provides insurance to all citicens and finances it with taxes
> No adverse selection and ends uninsurance
> Good equity
> Chances of moral hazarda
> The entire economy might become less efficiency because higher taxes distort behaviour by discouraging labour and commerce

Question 23

Compulsory insurance

Answer 23

A mandate (a legal recuirement that everyone in a population purcheses private insurance)
> Confronts adverse selection by effectively banning it
> Government can still regulate market
> Could be expensive (therefore coupled with subsidies)

Question 24

Employer-sponsored insurance

Answer 24

Employers are required or encouraged to offer e aprivate insurance contract to all of their employers

Question 25

Means-tested insurance

Answer 25

Subsidized health care for the poor

Question 26

Community-based health insurance

Answer 26

Affiliation basted on community membership
> beneficiaries are often excluded because they are too poor/not in the right sector
> community is strongly involved in management
> reduced adverse selection and moral hazard

Question 27

Three related objectives/dimensions of UHC:

Answer 27

> Equity in access to health services
Quality of health services
Protection against financial risk

Question 28

Impact of health insurance

Answer 28

> Consistent improvements in utilization of health care
Mostly reduces out-of-pocket expenditures and catastrophich payments
No conclusive evidence on health satus - perhaps due to low quality of care

Question 29

Controlling moral hazard

Answer 29

1. Cost-effectiveness analysis
2. Cost sharing
3. Gatekeeping and queing
4. Prospective payments

Question 30

Cost-efectiveness analysis (CEA)

Answer 30

To controll moral hazard

Limits moral hazard by reducing spending on inefficient, costly treatments or treatments that are unaffordable

Question 31

Cost sharing

Answer 31

To control moral hazard
Accomplished through the use of deductibles, coinsurance and copayments
Controls moral hazard by being more politically palatable than CEA but makes health less affordable for patients

Question 32

Gatekeeping and queing

Answer 32

To control moral hazard
Entails a tiered system of doctors that patients must visit in a specified order
Queues are a sighn of market inefficiency, however, in presence of moral hazard, queues might e an indication of inflated demand > people benefiting least from the specialists will decide not to wait that long.

Question 33

Prospective payments (ook wel DBC)

Answer 33

To control moral hazard
payments are made to doctors or hospitals before halth care is delivered.
Lowers physician induced demand
A prospective-payment system will pay hospitals fixed amounts for treating any heart attack patient. This gives hospitals incentives to economize in their treatment of heart attack patients because htey no longer receive extra payments for doing extra work.

Question 34

Maladies of private halth care markets

Answer 34

> Oligopoly pricing
Monopoly rents for doctors and specialists if there is not enough competition
Physician-induced demand
Medical arms races

Question 35

Health care is of good quality when:

Answer 35

> providers ask questions
perform appropriate tests
Draw sound conclusions
give effective treatment, in a timely fashion in clean facilities with respect to the patient

Question 36

Health care is provided efficiently

Answer 36

Good quality services of sufficient social value provided at lowest cost
> Providers must avoid waste
> Users must enter early (at low cost conditions)
> Avoid unnecessary and unnecessarily costly treatments

Question 37

Regulating provision of health care

Answer 37

1. Public provision
2. Private hospital markets
3. Government-set prices

Question 38

Public provision

Answer 38

Hospitals are government-run and finances by taxes. Physicians are employed by the government
> reduce costs of medical care
> improve quality by banishign oligopoply power and medical arms races
> May be less efficient than private markets
> Better at controlling health care costs (lower quality of health care = lower costs)

Question 39

Private provision

Answer 39

Competition among hospitals and preserves the incentives for hospitals to operate efficiently
> Little competition leads to market power
> Some populations will lack access to care

Question 40

Government-set prices

Answer 40

Aim to prevent private providers from exercising market power and keep health care affordable

Question 41

Beveridge model

Answer 41

Universal public insurance, government paid
Public provision of health care (doctors are government paid)
Emphasis on equity

Question 42

Bismarck model

Answer 42

Compulsory private insurance
Private hospitals and doctors
Heavily regulated
Balances equity and liberty

Question 43

American model

Answer 43

Private markets
No price controls
No mandate for universal insurances
Public insurance for select groups
Emphasis on liberty

Question 44

Health production frontier

Answer 44

How much health a society can produce with a certain amount of spending