Markets In Action: Economics Of Healthcare Flashcards
How else can the NHS be funded
- patients contribute towards non-emergency surgery
- ration care
- NHS tax
- social insurance (insurance scheme)
What is an ongoing problem with healthcare provision
The concept of equity - who is treated first etc
What might cause market failure in the provision of healthcare
- imperfect information
- moral hazard
- lack of adequate health insurance
- externalities from healthcare provision
- inequalities in access to basic health care
- monopoly power among health care suppliers
Imperfect information - NHS
Consumers may under-value the long-term private benefits of consuming healthcare
Moral hazard - NHS
Consumers may take more risks after taking out health insurance because they know they are covered
Externalities form healthcare provision
They have external benefits for society as a whole
Inequalities in access to basic healthcare - NHS
Regional and local differences in the quality and quantity of health care available
Monopoly power among healthcare suppliers - NHS
If there was a wholly free market in providing healthcare, it is likely that in the LR, several dominant health care providers would emerge
Who is the worlds largest spender on healthcare
USA
Economic and social importance of healthcare
- quality of life and poverty
- employment
- productivity
- higher economic growth and standard of living
How does the NHS currently ration health resources
- government rationing (they decide on the NHS budget)
- the national institute for clinical excellence (advises the NHS on clinical and economic benefits and costs)
- health authorities and primary care groups allocate money to particular disease/treatment areas
Factors that put increased financial pressures on the NHS
- development in medical technology and treatments
- new drugs
- increased costs of staffing in the NHS
- growing health problems associated with changing lifestyles
- long term change in age structure of the population
- increasing expectations of patients and their families
Case for maintaining a tax funded health care system
- NHS can exploit economies of scale and provide health services for millions of people at an efficient cost
- it is a progressive system of direct taxation (helps vertical equity)
Case for using the market mechanism in health care
- households can consume when they want and supply changes to match that
- demand will be linked to the private benefit to the patient
