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Health Economics > Lecture 4 > Flashcards

Lecture 4 Flashcards

1
Q

What is a health system?

A

A health system consists of all organizations, people, and actions whose primary intent is to promote, restore, or maintain health

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2
Q

What does a good health system deliver?

A

A good health system delivers quality services to all people, when and where they need them.

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3
Q

What components are required for a good health system to function properly?

A
  1. robust financing mechanism
  2. well-trained and adequately paid workforce
  3. well-maintained facilities and logistics to deliver quality medicines and technologies
  4. reliable information on which to base decisions and policies.
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4
Q

What are the six core components/ Building blocks of health systems?

A
  1. Service delivery
  2. Health workforce
  3. Information
  4. Medical products, vaccines and technology
  5. Financing
  6. Leadership/governance
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5
Q

What is the analytical framework used by the WHO to describe health systems?

A

The framework is used to monitor the building blocks of health systems and provides a set of indicators and measurement strategies

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6
Q

What is voluntary health insurance?

A

Voluntary health insurance is any health insurance paid for by voluntary contributions. It is commonly used as a supplement to publicly financed coverage in high-income countries.

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7
Q

What is out-of-pocket payment in healthcare?

A

Out-of-pocket payment refers to payments made directly by patients to healthcare providers

These payments can be regressive, imposing a greater burden on the poor compared to the rich.

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8
Q

Out of pocket money:

New evidence from WHO finds that:

A
  1. Some people face barriers to access and forego treatment due to the cost involved
  2. Some pay and experience financial hardship as a result
  3. Some are affected in both ways, even in Europe’s richest countries
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9
Q

How can governments create fiscal space for healthcare financing?

A

Governments can create fiscal space by receiving grants and loans from external sources

For example, a country may receive financial support from organizations like the World Bank to fund healthcare initiatives, such as a universal health insurance system.

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10
Q

What is a Public Private Partnership (PPP) in healthcare?

A

A Public Private Partnership (PPP) is a contractual relationship between the public and private sectors where responsibilities and risks are shared to finance and provide public healthcare facilities and services. The private sector provides these services in exchange for payments from the public sector or fees paid by users.

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11
Q

PPP types

A
  • Management contracts
  • DBFO Contracts
  • BOT Contracts
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12
Q

System Building blocks:

What are the four additional components included as OVERALL GOALS / OUTCOMES?

A
  1. IMPROVED EFFICIENCy
  2. SOCIAL AND FINANCIAL RISK PROTECTION
  3. Improved health (level and equity)
  4. Responsiveness
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12
Q

What is the purpose of the WHO’s analytical framework?

A

The WHO uses an analytical framework to describe health systems

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12
Q

SYSTEM BUILDING BLOCKS:

How preformance is assesssed to reach the desired goals?

A
  1. ACCESS
  2. COVERAGE
  3. QUALITY
  4. SAFETY
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12
Q

What does good health service delivery encompass?

A

Good health service delivery encompasses both quality and access.

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12
Q

What are elements of quality health service delivery?

A

Quality health service delivery includes having drugs, supplies, and equipment in stock, and ensuring that health workers are paid, supervised, and motivated (e.g., pay for performance).

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13
Q

What is necessary to ensure access in health service delivery?

A

To ensure access in health service delivery, there should be equitable and efficient financing, rational planning, and professional management based on data.

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14
Q

What are the components of a well-performing health workforce?

A

A well-performing health workforce consists of

  • HR management (hiring adequate staff)
  • HR skills (adequate drugs and supplies for an effective workforce),
  • HR policies (data tracking of human resources).
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15
Q

What does a well-performing health information system ensure?

A

A well-performing health information system ensures the production, analysis, dissemination, and use of timely and reliable information. It also links the use of data to resource allocation and measurement of health worker performance and shares data with the community.

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16
Q

What does effective leadership and governance ensure in a health system?

A

Effective leadership and governance ensure
1. The existence of strategic policy frameworks
1. effective oversight
1. coalition-building.
1. appropriate incentives, such as regulating health workers
1. focus on system design and accountability, including patient accountability that empowers consumers.

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17
Q

What do procurement and supply programs need to ensure in a health system?

A

Procurement and supply programs need to ensure equitable access, assured quality, and cost-effective use.

For example, they may use pro-poor financing for essential products, have local capacity to enforce regulations, and train health workers in cost-effective prescribing practices.

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18
Q

What is the purpose of health financing in a health system?

A

The purpose of health financing is to make funding available and set the right financial incentives to providers to ensure that all individuals have access to effective public health and personal healthcare.

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19
Q

What are the key objectives of a good health financing system?

A

The key objectives of a good health financing system are to raise adequate funds for health, ensure access to quality healthcare regardless of the ability to pay, protect people from financial catastrophe, and allocate resources and purchase goods and services in ways that improve quality, equity, and efficiency.

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20
Q

What are the three principal functions of health financing in a health system?

A
  1. Revenue collection from various sources.
  2. Pooling of funds and spreading of risks across larger population groups.
  3. Allocation or use of funds to purchase services from public and private providers of health care.
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21
Q

What is revenue collection in health financing?

A

Revenue collection is the way health systems raise money from households, businesses, and external sources.

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22
Q

List the Revenue
Collection: Financing Sources

A
  1. Taxation
  2. Social Health Insurance
  3. Community Health Service
  4. Voluntary Health Insurance
  5. Out-of-Pocket payment
  6. Grants and Loans
  7. Public Private Partnership (PPP)
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23
Q

What are the two types of taxes for revenue collection in health financing?

A

Direct and indirect

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24
Q

What is an example of an indirect tax for health financing?

A

Value added tax

(paid by consumers each time they purchase a good as end users)

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25
Q

What is an example of a sin tax for health financing?

A

Tobacco or alcohol taxes

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26
Q

Where can funds from revenue collection in health financing flow to?

A

Directly to health providers or through an intermediary

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27
Q

What are the pros of taxation as a health financing source?

A

Universal access, diverse financing resources, simplicity of management

28
Q

How does progressive taxation benefit health financing?

A

Rich pay higher proportion of income, providing financial protection to the informal sector

29
Q

What is one way taxation can support social health insurance?

A

Subsidizing social health insurance

30
Q

What is one disadvantage of relying on general tax financing for revenue collection in health systems?

A

Vulnerability in times of economic and fiscal difficulties

31
Q

How can reliance on general tax financing lead to inequity in health systems?

A

The poor bears a larger part of the tax burden compared to the rich

32
Q

What is social health insurance in health financing?

A

Social health insurance is typically operated by a public agency and financed through compulsory contributions from payroll, usually split between employers and employees, and it aims to provide risk pooling to prevent people from falling into poverty due to healthcare costs.

33
Q

What are the pros of social health insurance?

A
  1. risk pooling
  2. additional resources for the health system
  3. stable funding
  4. citizen willingness to pay

  1. SHI helps prevent people from falling
    into poverty due to health care costs
  2. separated from the general government
    budget and independent of budget provision
  3. destination of the money is visible, specific, and related to a vital need.
34
Q

What are the cons of social health insurance?

A
  1. contributions not being risk-related
  2. need for mechanisms to cover the poor
  3. complexity
  4. excess demand for services
  5. poor coverage for chronic diseases and preventive care.

  1. Complex and expensive to manage: many different players, complex interactions, and complicated tasks—all of which must be managed.
  2. because the costs of the services are heavily subsidized (a moral hazard)
35
Q

What are community-based health insurance schemes?

A

Not-for-profit prepayment plans with community control and voluntary membership.

They generally spread risk from the healthy to the sick, but if premiums are based on income, there can also be risk sharing from the better off to the poor

36
Q

What is community health insurance?

A

Insurance system managed by a community

37
Q

Who does the Community Health Insurance exclude and what does it promote?

A

Excludes employees in the informal sector and promotes social values

38
Q

What are the pros of community health insurance?

A

Better access to healthcare for low-income people

It may complete or fill the gaps of other health financing schemes (social health insurance or government financing), or they may be a first step toward a larger-scale system

39
Q

What are the limitations of community health insurance?

A

Limited protection, vulnerable to failure

40
Q

What is the purpose of community-based health insurance schemes?

A

To spread risk from the healthy to the sick and promote risk sharing from the better off to the poor.

41
Q

How can community health insurance complement other financing schemes?

A

Fill the gaps or be a first step toward a larger-scale system

42
Q

What does the term ‘community’ refer to in community health insurance?

A

A group of people who share common characteristics

43
Q

What is a Management Contract in the context of Public Private Partnerships (PPP)?

A

A Management Contract is a PPP type with a time frame of 3-5 years where the private sector manages an existing public facility and maintains it, and the public sector makes periodic payments to the private sector.

44
Q

What is a DBFO Contract in the context of Public Private Partnerships (PPP)?

A

A DBFO Contract is a PPP type with a time frame of 20-30 years. In this contract, the private sector, through a Special Purpose Vehicle, is responsible for designing, building, financing, and operating a facility.

The private sector also provides secondary services like catering, parking, and maintenance. The public sector provides primary services (e.g., health services), makes periodic payments to the private sector, and retains ownership of the facility or asset.

45
Q

What is the main difference in time frame between Management Contracts and DBFO Contracts in PPPs?

A

Management Contracts typically have a time frame of 3-5 years, while DBFO Contracts have a much longer time frame, usually ranging from 20-30 years.

46
Q

What are the responsibilities of the private sector in a DBFO Contract for PPPs?

A

In a DBFO Contract, the private sector, often through a Special Purpose Vehicle, is responsible for designing, building, financing, and operating a facility. They also provide secondary services such as catering, parking, and maintenance

47
Q

What is the primary difference between BOT Contracts and DBFO Contracts in Public Private Partnerships (PPP)?

A

BOT Contracts, unlike DBFO Contracts, involve the private sector providing both primary and secondary services to the public sector or users and retaining ownership of the asset or facility.

48
Q

What is the typical duration or time frame for BOT Contracts in PPPs?

A

BOT Contracts in PPPs typically have a duration of 20-30 years.

49
Q

What are the risks associated with PPP?

A
  1. Exchange rate (private sector).
  2. Inflation (public or private sector).
  3. Design and Construction risks (private sector).
  4. Technology risk (public or private sector).
  5. Unexpected risk (public and private).
  6. Environmental risk.
50
Q

Pros of PPP:

A
  1. Better management of public services through monitoring private sector performance.
  2. Lower lifetime costs of the project.
  3. Improved quality of services, often with performance-related payments.
  4. Enhancement of negotiation and contractual skills in the public sector.
  5. Shared risks and responsibilities between the public and private sectors.
51
Q

Cons of PPP

A
  1. High transaction costs.
  2. Inappropriate use of PPP even when it is not cost-effective (i.e., cost of implementing the project using PPP exceeds the cost of implementing the project using traditional methods).
  3. Lack of transparency in PPP projects.
  4. Government guarantees for PPP projects, leading to the government bearing all resulting costs in case of private sector failure.
52
Q

What is Risk Pooling in Health Financing?

A

Risk pooling in health financing refers to the process of creating a common pool of money to mitigate financial risks associated with high-risk individuals by using contributions from lower-risk individuals.

53
Q

What is the purpose of risk pooling in health financing?

A

The main purpose of risk pooling is to protect individuals from large, unpredictable health expenditures by sharing collective health risks. It also serves as a mechanism for creating cross-subsidies between the rich and the poor, promoting equity in healthcare financing.

54
Q

How does the size of the pool affect risk pooling in health financing?

A

A larger pool has greater potential to spread risks and provides more accurate predictions of average and total pool costs. This size effect is crucial for ensuring effective risk mitigation and equitable healthcare financing.

55
Q

Describe:

Cost of Health Services, Capacity to pay, and Need for subsidies Over the Lifetime of a typical individual

A

It illustrates the relative contributions and risk of illness acrross a lifetime. The Working-age population is the most healthy and economically productive: therfore, people in this group typically pay more into the health care system than they consume. In contrast, the very young and the very old typically consume more resources than they can contribute, so they need subsidies

It is possible that households or individuals with higher incomes never need a subsidy.
It is also possible that lower-income households or individuals may need a subsidy from the beginning of their lives to access health care services at the levels and in the conditions specified by society as minimally acceptable.

56
Q

What is the Allocation of Funds in Health Financing?

A

Allocation of funds in health financing refers to the process of distributing collected revenues to various healthcare interests, guided by different criteria, such as incremental or needs-based criteria.

57
Q

What is Incremental Resource Allocation in health financing?

A

Incremental resource allocation involves considering overall changes in the healthcare budget at the national level, which subsequently affects local budgets.

58
Q

What is Needs-based resource allocation in health financing?

A

Needs-based resource allocation in health financing uses health indicators such as population size, age, sex, and poverty levels to determine resource allocation, aiming to distribute resources based on healthcare needs.

59
Q

What does the lower half of the figure in “Macroeconomics, Globalization and Health” represent?

A

The lower half of the figure represents the individual country’s national economy and the factors that affect health within that nation.

60
Q

What are the three main factors in the lower half that affect health in the context of “Macroeconomics, Globalization and Health”?

A

The three main factors are risk factors (genetic predisposition, environmental influences, infectious diseases), household economy (related to behavior, consumption, and health-related activities), and the health system or sector (goods and services for improving health).

61
Q

What does the upper half of the figure in “Macroeconomics, Globalization and Health” represent?

A

The upper half represents aspects of the international system and globalization, which have expanded in influence in recent decades.

62
Q

What do the influences in the upper half of the figure in “Macroeconomics, Globalization and Health” typically represent?

A

The influences in the upper half typically represent factors that are outside the national government’s jurisdictions.

63
Q

What are some examples of international influences on risk factors for health as described in the figure?

A

Examples include increased exposure to infectious diseases through cross-border transmission, marketing of unhealthy products and behaviors, and environmental degradation, which can have effects that extend beyond national borders

64
Q

How does increased macroeconomic trade impact risk factors for disease, including communicable and non-communicable diseases?

A

Increased macroeconomic trade encourages people and goods to cross borders, affecting risk factors for communicable diseases. Changes in income and industry advertising influenced by trade can also impact risk factors for non-communicable diseases.

65
Q

How does increased interaction in the global economic system affect the national economy and wealth

A

Increased interaction at the macro level affects health through influences on the national economy, impacting factors such as income distribution and tax receipts.

66
Q

How does increased interaction in the global economic system affect the household economy and government’s ability to engage in public finance and health care?

A

Increased interaction in the global economic system can influence the household economy and impact the government’s ability to engage in public finance and the provision of health care.

67
Q

What is the relationship between economic prosperity, life expectancy, and chronic illnesses

A

Economic prosperity is generally positively associated with increased life expectancy, but it can also lead to an increase in chronic illnesses such as diabetes, heart disease, and cancer.

68
Q

In what ways is health care affected by increased interaction in the global economic system?

A

Health care is affected through the direct provision and distribution of health-related goods, services, and people, including access to pharmaceutical products, health-related knowledge and technology (e.g., new genomic developments), and the movement of patients and professionals.

69
Q

How does the proportion of income/growth dependent on trade affect economic stability?

A

The proportion of income/growth dependent on trade can affect economic stability. Trade liberalization, especially in financial services and capital movement, can result in volatile markets. An economy more reliant on trade may be inherently more unstable and unable to absorb external economic shocks.

70
Q

Does being an open economy automatically lead to economic instability?

A

No, being an open economy does not automatically lead to economic instability. It depends on various factors, such as the size and development stage of the country. Smaller, often developing countries that rely more on imports and exports for factor inputs and economies of scale may be inherently less stable due to their higher reliance on trade.

71
Q

What are the consequences of economic instability?

A

Economic instability leads to volatile markets, increased frequency of external shocks, and greater impacts of these shocks. This results in economic insecurity for individuals, which is associated with increased stress-related illnesses. Economic instability can also affect financial planning for healthcare by households and both the public and private health sectors, leading to investor reluctance, including within the health sector itself.

72
Q

How can exchange rate fluctuations impact the cost of healthcare?

A

Exchange rate fluctuations can influence the cost of healthcare by affecting the prices of imported healthcare products and domestically produced goods, which are used in healthcare. Changes in exchange rates due to macroeconomic developments may lead to price increases or decreases in healthcare costs. Moreover, increased economic interdependence between countries can introduce greater exogenous influences on prices, thereby raising healthcare expenses.

Health Economics (5 decks)

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