Module 1 - Intro to Health Econ & Cost of Health Care Flashcards
Health Economics Encompasses
Supply and demand for health care, Allocation of health care resources, and the Determination of health care resources
A situation often resulting from
asymmetric information in which individuals are able to
purchase insurance at the rates that are below
actuarially fair rates plus loading costs. An event in
healthcare whereby one party decides not to reveal the
full extent of their risk profile to the other party (i.e.
insurance model).
Adverse Selection
The possibility of consumers or
providers exploiting a benefit system unduly to the
disadvantages of other consumers, providers or the
financing community as a whole.
Moral Hazard
Situations in which the
parties on the opposite sides of transaction have
differing amounts of relevant information. Doctors have
more knowledge and information about medicine than
patients /consumers, the individual may not be the best
judge of his/her own interests, the doctor acts as an
agent of the patients demand.
Asymmetric information
May occur when asymmetry of information exists between supplier and consumer. The supplier can use superior information to encourage an individual to demand a greater quantity of the good or service they supply than the Pareto efficient level, should asymmetric information not exist. The result of this is a welfare loss.
Supplier Induced Demand
The WHO definition of health
“a state of
physical, mental and social well-being and not merely the
absence of disease or infirmity”
Health Economics is concerned with….
How to provide health care, what kind of health care should be provided, what is the value of health care
Health Economics
- Is the branch of economies that studies the health care system.
- Attempts to explain the healthcare system so we can better understand it.
- Recommends ways to improve the healthcare system.
If a physician is an imperfect agent and is paid fee-for service this may result in…
The physician recommending unnecessary medical services for financial gain.
What factors affect the health of a person?
Access to health care, level of education, and food intake.
Since the 1960s, medical care spending has been growing faster than the economy measured by the gross domestic product (GDP). Many economists believe this rapid growth in medical care spending is a problem because:
government must devote a larger share of its budget to financing medical care, which means it has less money to spend on education, roads, and other public goods we value.
Which is true about the healthcare expenditure across the globe?
Select one:
a. People living in rich countries are generally healthier. Therefore, they do not spend as much money as the poorer countries. Incorrect
b. Poorer countries spend more money on healthcare than richer countries.
c. More populated countries spend less in health care in per capita than less populated countries.
d. None of the above.
More populated countries spend less in health care in per capita than less populated countries.
