State Provision Flashcards
State Provision
Factors Influencing Healthcare Objectives
- Experience of Healthcare Workers and Supply of Infrastructure: Adequate training and availability of healthcare professionals; sufficient and up-to-date medical facilities.
- Political and Cultural Expectations: Government policies and public attitudes towards healthcare provision.
- Historical State Intervention: Previous government involvement and established systems.
Main Objectives of state Healthcare Provision
- Balance the Budget: Ensure fiscal responsibility while providing healthcare, including access for the poor.
- Protect Nation’s Health: Promote a healthy population to enhance workforce productivity and GDP.
- Subsidize the Poor: Provide financial assistance to ensure equitable healthcare access.
- Meet Political Promises/Social Culture: Fulfill governmental commitments and maintain societal norms.
Ways State and Private Healthcare Provision Can Co-exist
- Compulsory Complement: State excludes certain benefits (e.g., dental care) requiring private purchase.
- Compulsory Alternative: State excludes certain individuals (e.g., those failing means-tests) necessitating private coverage.
- Optimal Complement: Private insurance supplements limited state services.
- Optimal Alternative: Private insurance offers an alternative to state services, providing quicker and more flexible options.
Challenges Associated with Providing Healthcare as the State
- Demographic Challenges: Aging population increases costs.
- Technological Challenges: Limited access to advanced medical technologies can lead to higher costs and subpar treatment.
- Challenge of Sisyphus: Longer lifespans increase healthcare expenditures.
- Skilled Workers and Infrastructure: Brain drain, inadequate infrastructure, and expensive medical training.
- Burden of Disease: High prevalence of illness increases expenses.
- Competition and Regulation: Necessity for regulation if the market fails.
Deciding How Resources Are Allocated
- Cost-Benefit Analysis:
- Cost-Effectiveness Analysis:
- Cost Analysis:
- Cost-Utility Analysis:
- Willingness to Pay:
State Provision of Healthcare Support types
- Universal Provision: Provide healthcare to all citizens.
- Means-Tested Provision: Offer healthcare only to those in financial need.
Methods of State Benefit Payment
- Lump Sum Payments: Suitable for indemnity coverage.
- Regular Payments: Appropriate for long-term care.
- Salary-Based Benefits: Commensurate with individual earnings.
- Flat Benefits: Encourage return to work.
- CPI-Linked Benefits: Adjust benefits in line with inflation.
Incentives for Self Provision
- Tax Incentives: Reduced general tax for those with private insurance.
- Subsidies: Government subsidies for insurance premiums.
- Exclusion from State Benefits: Negative incentive where certain populations are excluded from state healthcare benefits.
Funding Sources for Healthcare Provision
PAYG (Pay-As-You-Go): The current working population effectively pays the total costs for those currently needing benefits. If there is a shortfall in any budget year, then the State will fund the difference from general tax revenues.
To see if contributions will be enough to fund expected healthcare costs for the year:
* Establish the level of state provision and contribution rates for working population
* Estimate coming year’s outgo
* Estimate coming year’s tax revenue
* Adjust this so as to incorporate healthcare outgo
If there is a projected shortfall, the State can take proactive measures to adjust the tax structure and maintain a balanced budget.
Forward Funding: Takes a longer-term view, where the government anticipates future healthcare costs and sets aside funds in advance to meet those expected expenses.
- Take a view on some future period e.g. 5 or 20 years
- Analyse the expected level of state provision at this point.
- Produce a model of State outgo at this and intervening years (gives an expected flow of cash outgo in the future)
- Estimate population and workforce trends
- Forecast taxation revenues accordingly (expected flow of cash income)
- Calculate a specific healthcare fund such that the earmarked taxation will, over the period, meet the intended State healthcare provision
Advantages and Disadvantages of State-Providing all Healthcare
- Advantages:
- Universal access to healthcare.
- Popular among citizens if effective.
- Focused resources on healthcare rather than fee collection systems.
- Less need for regulation of private insurance.
- Disadvantages:
- Lack of profit motive might reduce care quality.
- Potential for missed appointments and misuse.
- Encourages excessive demand and inappropriate use.
- No control over provider costs.
Impact on Private Medical Insurance (PMI) Market
- State Provides All Healthcare:
- PMI becomes optional, less regulated premiums.
- Demand from those seeking higher quality care.
- Design PMI products to exceed state services.
- Demand for PMI depends on economic conditions.
- State Reimburses Healthcare at Different Levels:
- Higher PMI demand to cover state shortfalls.
- Increased competition among PMI providers.
- Potential for more regulation (e.g., community rating).
- Higher income individuals might pay above tariff rates
- PMI products designed to complement state benefits.
Willingness to pay
Determine allocation based on individuals’ willingness to pay.
Direct method: use interviews and questionnaire to determined but might be influenced by emotional responses.
Indirect method: observing behavior of PH and identify how much people are willing to pay. But there may be a lot of confounding factors associated with PH behavior.
Cost utility analysis
Utilize QALYs, DALYs or HYEs to measure quality and care utilization.
Generic measure that sums years spent in different states using weights eg (0=dead and 1=perfectly healthy) for each health state
Emphasis placed on health years saved rather than number of lives saved.
CUA relies on appropriate scale which can be combined with utility function but CUA is very sensitive to utility function and may not reflect value different segments of population place on health outcomes.
Cost analysis
Detailed examination of costs, both initial and recurring, fixed and variable, without considering healthcare quality.
Can provide breakdown of current and future cost, changes in cost as a result of changes in scale and cost recovery from lives insured.
Cost effectiveness analysis
Evaluate outcomes like extended expected lifetime at birth.
All healthcare systems must have same measure of effectiveness.
Inability to account for multi-dimensional affects e.g. reduced healthcare expenditure and increased lifetime.
Likely CEA understand value of healthcare interventions due to not considering LT effects, or effects like reduced caregiver burden.
Does not consider utilization of healthcare service l
