Lecture 2 Flashcards
Universal Health Coverage (UHC)
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.
Trade offs by the government
Health
Wealth
Equity
Disability Adjusted Life Years (DALY)
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
Burden of disease
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.
Strengthts of using DALYs lost as a measure of the burden of disease
> 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
Weaknesses of using DALYs lost as a measure of the burden of disease
> 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)
QALY: Quality Adjusted Life Years
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.
Government intervenes in different stages of the formation of health
> Health environment
Health inputs and health behaviours
Health care services
Health care financing
Government intervenes in different stages of the formation of health through various means
> Regulations > Information provision > Public health programs > Production > Finance > Research and development
Market failures
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
Equality vs equity
equality is about distribution
equity is about fairness
Rawls’ social contract
The theory of justice; about organizing the society, how would you distribute resources
Benefit incidence analysis (BIA)
Analyzes how spending on health is distributed over different socio-economic groups.
Opzoeken in aantekeningen?
Concentration curve
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.
Arrow’s impossibility theorem
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.
The health policy trilemma
Health, wealth, equity
There will never be a perfect health care system where all three goals are maximized
Coping with uninsured health shocks
> Self insurance
Informal credit
Informal risk-sharing
Household health care financing options
> Adjust labor supply
Postpone large expenditures and investments
Reduced food consumption
Last resort: forego health care all together
How to pull risk?
> General taxation
Pay for private insurance
Intermediate (social insurance, other means)
Houw should health insurance (risk pooling) markets work?
- Completely private insuracne markets
- Universal public insurance
- Compulsory insurance
- Employer-sponsored insurance
- Means-tested health insurance
- Community-based health insurance
Private insurance markets
Prediction by adverse selection: only the least healthy customers are insured fully and much of the population is underinsured.
> Minimizes government involvement.
Universal public insurance
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
Compulsory insurance
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)
Employer-sponsored insurance
Employers are required or encouraged to offer e aprivate insurance contract to all of their employers
Means-tested insurance
Subsidized health care for the poor
Community-based health insurance
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
Three related objectives/dimensions of UHC:
> Equity in access to health services
Quality of health services
Protection against financial risk
Impact of health insurance
> 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
Controlling moral hazard
- Cost-effectiveness analysis
- Cost sharing
- Gatekeeping and queing
- Prospective payments
Cost-efectiveness analysis (CEA)
To controll moral hazard
Limits moral hazard by reducing spending on inefficient, costly treatments or treatments that are unaffordable
Cost sharing
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
Gatekeeping and queing
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.
Prospective payments (ook wel DBC)
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.
Maladies of private halth care markets
> Oligopoly pricing
Monopoly rents for doctors and specialists if there is not enough competition
Physician-induced demand
Medical arms races
Health care is of good quality when:
> providers ask questions
perform appropriate tests
Draw sound conclusions
give effective treatment, in a timely fashion in clean facilities with respect to the patient
Health care is provided efficiently
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
Regulating provision of health care
- Public provision
- Private hospital markets
- Government-set prices
Public provision
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)
Private provision
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
Government-set prices
Aim to prevent private providers from exercising market power and keep health care affordable
Beveridge model
Universal public insurance, government paid
Public provision of health care (doctors are government paid)
Emphasis on equity
Bismarck model
Compulsory private insurance
Private hospitals and doctors
Heavily regulated
Balances equity and liberty
American model
Private markets No price controls No mandate for universal insurances Public insurance for select groups Emphasis on liberty
Health production frontier
How much health a society can produce with a certain amount of spending
