Topic 1: Health System

Question 1

What is healthcare?

Answer 1

Health care refers to those resources society uses on people in ill health in attempt to cure them, or to care for them.

In addition, it also covers rehabilitation activities that are sometimes required after a shorter term intervention or those activities that seek to prevent people from becoming ill in the first place.

Question 2

Primary form of health care

Answer 2

Cure, prevention and rehabilitation activities seek to improve health (i.e. to produce health outcomes).

Question 3

What is health system?

Answer 3

The WHO defines a health system as “all actors, institutions and resources that undertake health care actions – where a health action is one where the primary intent is to improve health.”

Question 4

The function of a health system? (Six core functions)

Answer 4

1. service delivery
2. financing
3. leadership and governance (stewardship)
4. health workforce
5. information,
6. medical products, vaccines and technologies.

Question 5

Is there an optimal health policy? Explain why or why not

Answer 5

There is not an optimal policy, because societies may not have preferences that can be optimised in the traditional sense.

Question 6

Features of: Group one (Beveridge Model)

Answer 6

• Health is viewed as a fundamental right: guiding principle.
• Free care: promotes equity, care provided for free at the point of care, eliminates price rationing

Question 7

What is the aim of Beveridge Model?

Answer 7

Health care is a good provided by the government and paid for with tax revenue. Where allocation of health care is based on need and not ability to pay.
Eliminates price rationing (means those who cannot pay for it will have access).

Question 8

Why do Queus arise in Beveridge governments?

Answer 8

• Because Beveridge governments mandate free (or very-low cost) care.
• Demand is high
• High demand and low supply results in queues

Question 9

Benefit of Queues (Beveridge)

Answer 9

• May limit moral hazard (excess/unnecessary use of services)
• Unlike price rationing, queues treat the rich and poor equally

Question 10

Negative of Queues (Beveridge)

Answer 10

• Loss of social welfare

- Long wait times a very politically sensitive issue

Question 11

What is Gate Keeping (Queue reduction strategy)?

Answer 11

• Beveridge system requires all patients visiting a general practitioner (GP) before they can see a specialist.
• only patients they deem as needing care may then visit a specialist

Question 12

List Queue Reduction Strategies

Answer 12

increase demand or increase supply:

• increase use of gatekeepers
• stricter eligibility thresholds for care
• Prioritizing patients so not just first-come first-serve bases
• Hire more Doctors and build more hospital
• higher salaries for medical staff
• outsource care to private providers

Question 13

Characteristics of Australia’s Health Care System:

Answer 13

• a mix of public and private financing
• the public insure program (medicare) covers the entire population and meets a high proportion on patient costs for services

Question 14

What are the three elements of health policy trilemma?

Answer 14

Health, Wealth and Equity

Question 15

Explain The Bismarck Model

Answer 15

• Social Health Insurance Scheme
• The right to health is considered fundamental
• Financed not through general taxes, but through universal health insurance either sponsored by an employer or through the government.

Question 16

Define features of Bismarck Health Care System?

Answer 16

• allows substantial private health care provision, but services are heavily regulated
• many hospitals are private

Question 17

Explain Insurance Markets

Answer 17

Insurance is not run by the government but instead multiple private, non-profit entities called sickness funds

Question 18

4 features of Insurance Markets

Answer 18

1. Minimum standards: each insurance contract is required to meet a minimal standard of care; There are also limits on copayments and deductibles.
2. Open enrollment: insurers may not reject any eligible customers, even if they are unhealthy.
3. Compulsory participation: customers are mandated to have and pay for insurance coverage at all times.
4. Community rating: insurers cannot set premiums using risk rating; instead they must be community rated.

Question 19

What is Risk Rating?

Answer 19

Risk Rating: charging different premiums to different customers based on their personal risk of needing health care.

Question 20

What is community rating?

Answer 20

Entails charging everyone in an insurance pool the same premium.

Question 21

What is risk selection (Bismarck)?

When does it happen?

Answer 21

• risk selection refers to the behavior of insurance providers.
• Risk selection occurs when insurers seek to enroll low-risk customers and seek to avoid high-risk customers.

Question 22

What is adverse selection (Bismarck)?

Answer 22

Adverse selection refers to the behavior of insurance customers

Question 23

Tactics for Risk Selection?

Answer 23

♣ Advertise specifically to certain groups
♣ Close offices in high-cost regions
♣ Reward agents who find sick customers and convince them to switch to other plans
♣ Ignore calls from sick customers who want to sign up
♣ Provide deficient care to the sickly in hopes of chasing them away
♣ Hold sign-up sessions in buildings that are not accessible to the disabled

Question 24

How to eliminate risk selection?

- What is ex-post cost-based compensation

Answer 24

Option 1: Ex-post cost-based compensation
o Sickness funds with sicker customers and higher expenditures are reimbursed with transfers from funds that had healthier customers and lower expenditures.
o This erases risk selection, but it also removes any incentive for insurance funds to treat their patients efficiently.

Question 25

How to eliminate risk selection?

- What is risk adjustment

Answer 25

Option 2: Risk adjustment
o Transfers are based on ex ante risk assessments and not actual cost outcomes.
o Thus, insurance funds that draw unhealthy customers are reimbursed based on how expensive their customers are expected to be, not on how expensive they actually are.
This reduces incentives for cream-skimming, while maintaining efficiency.

Question 26

What is the plural model also known as?

Answer 26

The US Model

Question 27

Briefly explain US Model?

Answer 27

• Health is considered a personal good
• Health is largely financed out of pocket or through employer sponsored insurance scheme.
• Large uninsured population
• Facilities are largely private (i.e. private for profit and private, not for profit), but some public facilities exist
• Overwhelming majority of health workers work as private practitioners
• There are some schemes to support vulnerable groups

Common in the US and several low and middle income countries

Question 28

What is Herd Immunity?

Answer 28

the secondhand immunity that accrues to non vaccinated people when other people are vaccinated.

Question 29

What is international health?

Answer 29

Focused on public health activities abroad, with a geographic focus on developing countries and with often with a content of infectious and tropical diseases, water and sanitation, malnutrition and child health.

Question 30

Explain global health?

Answer 30

Implies global perspective, involves many disciplines, emphasizes transnational issue, determinants and solutions, and relates to problems that require cooperation.

Question 31

What are areas of overlap between global health, international health and public health?

Answer 31

• Emphasis on health as a public good and importance of systems and structure
• Priority on population-based and preventive focus
• Concentration on poorer, vulnerable, and under-served population
• Multidisciplinary and interdisciplinary approach.
  Emphasizes transnational issue, determinants and solutions, and relates to problems that require cooperation.