SkeletonNotes10

Question 1

In economic modeling, tradeoff decisions are made according to one’s ________.

Answer 1

preferences and goals

Question 2

The preferences of a society with many people with __________ are not realized so ________

Answer 2

different individual preferences
easily

Question 3

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 ____________.

Answer 3

individual preferences
tradeoffs and complexities

Question 4

Three goals represent the tradeoffs to health policy:

Answer 4

health, wealth, and equity

Question 5

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.

Answer 5

cost money
equitable system

Question 6

Any hypothetical policy that combats adverse selection and increases equity would either?

Answer 6

increase costs or lower health for some

Question 7

Every policy choice involves a tradeoff between health, wealth, and equity. Otherwise it would be?

Answer 7

Obvious and probably implemented already

Question 8

Any national healthcare system must answer three broad questions:

Answer 8

1. how should health insurance work?
2. How should moral hazard be controlled in public insurance?
3. How should health care provider markets be regulated?

Question 9

A correct policy that address any of these questions will __________. it still depends on the value judgements of ________.

Answer 9

favor one value more than the others
society

Question 10

What are the four pathologies that policy can be susceptible to?

Answer 10

adverse selection
moral hazard
monopolistic behavior
health disparities

Question 11

In completely private insurance markets, the Rothschild-Stiglitz model predicts that:

Answer 11

only frail customers are fully insured and much of the population is uninsured

Question 12

Completely private insurance markets have the most likelyhood of a _________, have minimal __________, and ________.

Answer 12

death spiral
government involvement
Low taxes

Question 13

Completely private insurance markets increases the number of people that are?

Answer 13

Not fully insured and having catastrophic medical expenses

Question 14

Universal public insurance, financed by _____, may cause ________ in the economy. Although lower healthcare costs can ____________.

Answer 14

taxes
distortions
increase efficiency

Question 15

Universal public insurance sidesteps adverse selection and ends _________ as well as furthers ___________.

Answer 15

uninsurance
the goal of equity

Question 16

With universal public insurance, ____________ must be controlled, or else ____________.

Answer 16

moral hazard
government budget can explode

Question 17

universal public insurances can also be called?

Answer 17

“single-payers” healthcare

Question 18

a mandate (legal requirement) confronts adverse selection (all must be in the pool

Answer 18

Compulsory insurance

Question 19

Why can mandates be expensive

Answer 19

they may have to be coupled with subsidies to help the poor, which are funded by taxes

Question 20

In employer sponsored insurance, employers are required or encouraged to offer an ____________

Answer 20

insurance contract to all employees

Question 21

In employer sponsored insurance, the need to stay in ones job is a strong incentive for healthy ____________, mitigating ____________

Answer 21

employees to enter the pool
adverse selection

Question 22

Employer sponsored insurance creates labor market __________ and does not reach the __________

Answer 22

inefficiencies
unemployed

Question 23

Means-tested health insurance __________. (ex. ______ in the U.S.)

Answer 23

subsidizes care for the poor
Medicare

Question 24

Means-tested health insurance improves equity by?

Answer 24

providing care to those who could not otherwise afford it

Question 25

Means-tested health insurance requires __________ and may increase ________

Answer 25

higher taxes Moral hazard

Question 26

What ways are there to reduce unnecessary/wasteful usage of the health system?

Answer 26

1. health technology assessment and cost effectiveness analysis 2. Cost sharing 3. Gatekeeping and queuing 4. perspective payments

Question 27

Health technology assessment (HTA) and the use of cost-effectiveness analysis (CEA) can be used to make sure only ____________

Answer 27

treatments are covered if they meet a certain threshold in reward/risk ratio

Question 28

Cost effectiveness analysis (CEA) reduces moral hazard by?

Answer 28

reducing spending on inefficient costly treatments

Question 29

Cost effectiveness analysis (CEA) makes insurance contracts ________, because some services are not covered, making the entire system __________

Answer 29

less full cheaper

Question 30

Cost sharing is done to increase the price of __________

Answer 30

unnecessary usage

Question 31

cost sharing uses _______________

Answer 31

deductibles, coinsurance, and copayments

Question 32

cost sharing decreases _________, and increases __________. an example is ________

Answer 32

moral hazard out of pocket spending medicare

Question 33

Gatekeeping and queuing increases the ____________

Answer 33

difficulty and time in usage

Question 34

Gatekeeping and queuing creates a ____________

Answer 34

teared system of doctors one must see in order

Question 35

Gatekeeping and queuing eliminates

Answer 35

unnecessary appointments

Question 36

Gatekeeping and queuing may reduce the number of ________, which could be good if _______

Answer 36

specialists moral hazard is a problem

Question 37

Gatekeeping and queuing, people may pay more in _________, which may lead to ____________

Answer 37

time political backlash

Question 38

Prospective payments, similar to Fuchs capitation system, to disincentivize provision of __________

Answer 38

unnecessary services

Question 39

With prospective payments, payments are made to providers before a service is __________, and the amount paid depends on the condition of the __________

Answer 39

rendered patient admitted

Question 40

Prospective payments reduces?

Answer 40

physician-induced demand and moral hazard

Question 41

With prospective payments however, doctor-patient relationships may become ____________

Answer 41

adversarial

Question 42

The health system must answer how to REGULATE the __________. So we can regulate _________, the ____________, and ____________.

Answer 42

provision of healthcare monopolies medical arms race physician-induced demand

Question 44

What are the three ways to work on healthcare provisions?

Answer 44

public provision private hospital markets government-set prices

Question 45

With public provisions, hospitals are __________ and financed by __________, physicians are employed by the __________

Answer 45

government run taxes government

Question 46

Public provisions can reduce ________________. May be vulnerable to agency problems if _______________ to ensure success. May lack feedback mechanism to fix problems, commonly has __________

Answer 46

reduce costs and improve quality over hospital oligopoly government workers have less incentive lower costs but longer queues

Question 47

Private hospital markets preserve the incentive to __________, but too little competition leads to __________and ______

Answer 47

operate effectively high prices and under provision

Question 48

Private hospital market competition can lead to what two things?

Answer 48

Medical-arms race, and poor and uninsured lacking access to quality care

Question 49

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 ____________

Answer 49

market power offered over-prescribed

Question 50

Various countries around the world have attempted to create various policy combinations, three to take note of are:

Answer 50

Beverage model Bismark Model American Model

Question 51

The beverage model:

Answer 51

-single-payer insurance -public provision of healthcare -little cost sharing -emphasis on equity -Long queues and payed by taxes

Question 52

What are some examples of the beverage model?

Answer 52

UK, Scandinavia, Canada, Australia, & New Zealand

Question 53

The Bismark Model:

Answer 53

-Compulsory private insurance -private hospitals and doctors -strict price controls set by government -balances equity and liberty

Question 54

What are some examples of the Bismark Model:

Answer 54

Germany, Japan, Switzerland, Netherlands

Question 55

American Model:

Answer 55

-private markets in a central role -no universal care mandate -no price controls -public insurance for select groups: elderly and poor -emphasis on liberty

Question 56

Examples of the American Model:

Answer 56

United States of America