Module 10 lecture, part 1 Flashcards
Three cornerstones of HC delivery
Cost
Access
Quality
High quality care = ?
The most cost-effective care
Cost is important in evaluating quality
What are quality goals achieved by?
Having up to date capabilities
Using evidence-based processes
Measuring outcomes
Price for consumers and financiers
Physician’s bill
Prescription bill
Health insurance premiums
National perspective on cost of HC
How much a nation spends on HC
Expenditure = price x quantity (utilization of svcs)
Provider’s perspective on cost of HC
Staff salaries
Capital costs for buildings and equipment
Rental of space
Purchase of supplies
Ways to evaluate trends in national HC expenditures
- Compare medical inflation to general inflation
- Compare to GDP
- Compare to other nations
How to compare medical inflation to general inflation
Consumer Price Index measures general inflation in the economy and calculates the annual changes
The rate of change in medical inflation remained consistently above the rates of change in the CPI
How to compare to GDP
HC spending growth rates consistently surpassed growth rates in the general economy
Comparison to other nations: health expenditures
US uses a larger % of economic resources on HC
US outpaced the growth in HC spending
Percent of GDP spent on HC: 2014, projected 2025, 2050, 2082
17.5% ($3 trillion) in 2014
2025: 20%
2050: 37%
2082: 49%
Relationship of rates of change of medical inflation to CPI, most of the time from 1975-2014
Rates of change in medical inflation remained above those in the CPI
Trends of health care spending growth rates and growth rates in the general economy from 1980-2013
Health care spending growth rates consistently surpassed growth rates in the general economy
Trends of US HC spending as a percentage of GDP for selected OECD countries, 1985 and 2014
The US uses a larger percentage of economic resources on HC than other OECD nations
The US outpaced the growth in HC spending than in other countries
Reasons to control HC costs
Currently consuming greater portions of the total economic output
Resources should be directed to their highest valued uses
Corporations bear the additional cost of doing business
A toll on avg and low-income Americans
Public spending for HC will become unstable
What occurs when we consume greater portion of the total economic output for health care costs?
Resources are limited
Other economic uses are curtailed
Where are there inefficiencies with HC costs?
Moral hazard and provider-induced demand
How do corporations bear the additional cost of doing business when HC costs are not controlled?
Premium costs passed on to consumers to be competitive
Limited ability of small businesses to offer health benefits
When HC costs are not controlled, how does that take a toll on average and low-income Americans, and how does this compare to Germany, Netherlands, and Sweden?
1/3 of Americans went without recommended care, didn’t visit a doc when sick, or failed to fill a prescription because of costs in 2016
7% in UK and Germany, 8% in the Netherlands and Sweden
Reasons for cost escalation
Third party payment
Imperfect market
Growth of technology
Increase in elderly pop
Medical model of health care delivery
Multipayer system and admin costs
Defensive medicine
Fraud and system abuse
Practice variations = small area variations (SAV)
How has 3rd party payment affected cost escalation?
Moral hazard
Provider-induced demand
How has the imperfect market affected cost escalation?
Neither free nor highly regulated
Prices far exceed the cost of production
Both quantity and price remain unchecked
How has growth of technology affected cost escalation?
High R & D spending
Innovation that leads to utilization
High tech creates demand for new svcs
Once invested, should maintain high utilization to recoup capital investments
How has the increase in elderly pop contributed to cost escalation?
Increased longevity
Baby boomer generation
Three times of HC use compared to younger ppl
How has the medical model of HC delivery contributed to cost escalation?
Misplaced emphasis on medical txs
Health promotion/dz prevention takes a backseat
More costly HC resources deployed to treat health problems that could have been prevented
How have the multipayer system and admin costs contributed to cost escalation?
Overall inefficiencies of the multipayer system
A billing and collection nightmare
US spending on admin costs > other countries
