SkeletonNotes10 Flashcards
In economic modeling, tradeoff decisions are made according to one’s ________.
preferences and goals
The preferences of a society with many people with __________ are not realized so ________
different individual preferences
easily
Kenneth Arrow’s Impossibility theorem points to the aggregation problem. Even though our __________ can be ordered, our aggregated preferences might not be able to. Thus societies will struggle in creating policies that involve important ____________.
individual preferences
tradeoffs and complexities
Three goals represent the tradeoffs to health policy:
health, wealth, and equity
As we have seen, attempts to increase health __________ - we would need to sacrifice part of our wealth to be healthier. Attempts to create a more ___________ is also costly.
cost money
equitable system
Any hypothetical policy that combats adverse selection and increases equity would either?
increase costs or lower health for some
Every policy choice involves a tradeoff between health, wealth, and equity. Otherwise it would be?
Obvious and probably implemented already
Any national healthcare system must answer three broad questions:
- how should health insurance work?
- How should moral hazard be controlled in public insurance?
- How should health care provider markets be regulated?
A correct policy that address any of these questions will __________. it still depends on the value judgements of ________.
favor one value more than the others
society
What are the four pathologies that policy can be susceptible to?
adverse selection
moral hazard
monopolistic behavior
health disparities
In completely private insurance markets, the Rothschild-Stiglitz model predicts that:
only frail customers are fully insured and much of the population is uninsured
Completely private insurance markets have the most likelyhood of a _________, have minimal __________, and ________.
death spiral
government involvement
Low taxes
Completely private insurance markets increases the number of people that are?
Not fully insured and having catastrophic medical expenses
Universal public insurance, financed by _____, may cause ________ in the economy. Although lower healthcare costs can ____________.
taxes
distortions
increase efficiency
Universal public insurance sidesteps adverse selection and ends _________ as well as furthers ___________.
uninsurance
the goal of equity
With universal public insurance, ____________ must be controlled, or else ____________.
moral hazard
government budget can explode
universal public insurances can also be called?
“single-payers” healthcare
a mandate (legal requirement) confronts adverse selection (all must be in the pool
Compulsory insurance
Why can mandates be expensive
they may have to be coupled with subsidies to help the poor, which are funded by taxes
In employer sponsored insurance, employers are required or encouraged to offer an ____________
insurance contract to all employees
In employer sponsored insurance, the need to stay in ones job is a strong incentive for healthy ____________, mitigating ____________
employees to enter the pool
adverse selection
Employer sponsored insurance creates labor market __________ and does not reach the __________
inefficiencies
unemployed
Means-tested health insurance __________. (ex. ______ in the U.S.)
subsidizes care for the poor
Medicare
Means-tested health insurance improves equity by?
providing care to those who could not otherwise afford it
Means-tested health insurance requires __________ and may increase ________
higher taxes
Moral hazard
What ways are there to reduce unnecessary/wasteful usage of the health system?
- health technology assessment and cost effectiveness analysis
- Cost sharing
- Gatekeeping and queuing
- perspective payments
Health technology assessment (HTA) and the use of cost-effectiveness analysis (CEA) can be used to make sure only ____________
treatments are covered if they meet a certain threshold in reward/risk ratio
Cost effectiveness analysis (CEA) reduces moral hazard by?
reducing spending on inefficient costly treatments
Cost effectiveness analysis (CEA) makes insurance contracts ________, because some services are not covered, making the entire system __________
less full
cheaper
Cost sharing is done to increase the price of __________
unnecessary usage
cost sharing uses _______________
deductibles, coinsurance, and copayments
cost sharing decreases _________, and increases __________. an example is ________
moral hazard
out of pocket spending
medicare
Gatekeeping and queuing increases the ____________
difficulty and time in usage
Gatekeeping and queuing creates a ____________
teared system of doctors one must see in order
Gatekeeping and queuing eliminates
unnecessary appointments
Gatekeeping and queuing may reduce the number of ________, which could be good if _______
specialists
moral hazard is a problem
Gatekeeping and queuing, people may pay more in _________, which may lead to ____________
time
political backlash
Prospective payments, similar to Fuchs capitation system, to disincentivize provision of __________
unnecessary services
With prospective payments, payments are made to providers before a service is __________, and the amount paid depends on the condition of the __________
rendered
patient admitted
Prospective payments reduces?
physician-induced demand and moral hazard
With prospective payments however, doctor-patient relationships may become ____________
adversarial
The health system must answer how to REGULATE the __________. So we can regulate _________, the ____________, and ____________.
provision of healthcare
monopolies
medical arms race
physician-induced demand
What are the three ways to work on healthcare provisions?
public provision
private hospital markets
government-set prices
With public provisions, hospitals are __________ and financed by __________, physicians are employed by the __________
government run
taxes
government
Public provisions can reduce ________________. May be vulnerable to agency problems if _______________ to ensure success. May lack feedback mechanism to fix problems, commonly has __________
reduce costs and improve quality over hospital oligopoly
government workers have less incentive
lower costs but longer queues
Private hospital markets preserve the incentive to __________, but too little competition leads to __________and ______
operate effectively
high prices and under provision
Private hospital market competition can lead to what two things?
Medical-arms race, and poor and uninsured lacking access to quality care
Government-set prices limits private providers from exercising ___________, can induce perverse incentives, prices set to low will not be __________ while the most profitable serviced will be ____________
market power
offered
over-prescribed
Various countries around the world have attempted to create various policy combinations, three to take note of are:
Beverage model
Bismark Model
American Model
The beverage model:
-single-payer insurance
-public provision of healthcare
-little cost sharing
-emphasis on equity
-Long queues and payed by taxes
What are some examples of the beverage model?
UK, Scandinavia, Canada, Australia, & New Zealand
The Bismark Model:
-Compulsory private insurance
-private hospitals and doctors
-strict price controls set by government
-balances equity and liberty
What are some examples of the Bismark Model:
Germany, Japan, Switzerland, Netherlands
American Model:
-private markets in a central role
-no universal care mandate
-no price controls
-public insurance for select groups: elderly and poor
-emphasis on liberty
Examples of the American Model:
United States of America
