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HSCI 206 > Unit 3 > Flashcards

Unit 3 Flashcards

1
Q

what is the range of PED

A

0 to minus infinity

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2
Q

what does PED = in perfect inelasticity

A

0

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3
Q

what does PED = in inelastic demand

A

because 0 and -1

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4
Q

what does PED = in unitary elasticity

A

-1

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5
Q

how does PED = in elastic demand

A

less than -1

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6
Q

what does PED = in perfect elasticity

A

minus infinity

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7
Q

what is the range of price elasticities for primary care

A

-0.1 to -0.7

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8
Q

what is the range of price elasticities for dental services

A

-0.5 to -0.7

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9
Q

what is the range of price elasticities for nursing home services

A

-0.7 to -2.4

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10
Q

what are the other elasticities of demand

A

income elasticity and time price elasticity

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11
Q

what affects income elasticity of demand

A

inferior goods, necessities and luxuries

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12
Q

what is the RAND HIE

A

the RAND health insurance experiment

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13
Q

what is the main benefit of health insurance

A

to give protection against financial catastrophe when health care is needed

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14
Q

what is the downside of insurance

A

is induced wasteful over-use of services and excess costs

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15
Q

what is a strategy for restraining costs

A

cost sharing

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16
Q

what is a concern about cost sharing

A

it delays in seeking initial care may result in more costly long-term care and worsen health

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17
Q

what did the RAND corporation become after the science experiment

A

an insurance company

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18
Q

how many people were involved in the RAND experiment

A

7791

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19
Q

what were the randomized groups in the RAND experiment

A

free care, co insurance at 25%, 50%, 90%; 0% inpatient care, 95% coinsurance for outpatient; and health maintenance organization

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20
Q

how long were subjects followed

A

3-5 years

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21
Q

what was found in the RAND experiment

A

the more insurance on hand, the more health care dollars they spent, and the more they visited hospitals

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22
Q

what is reduced by cost sharing

A

spending

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23
Q

what is a complement

A

if a price of one good go up, you consume less of both

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24
Q

what is a substitute

A

if price of one good goes up you consume more of the other one

25
Q

are inpatient and outpatient care complements or substitutes

A

complements

26
Q

in what terms did free care give better health

A

blood pressure control, vision, oral health, serious symptoms

27
Q

what were the benefits from cost sharing

A

reduced participants’ worry about health, and had fewer restricted activity days

28
Q

what were the effects of the free care plan in the RAND HIE

A

it was beneficial for medical screening and one health habit, but worse for some health habits like diet and exercise

29
Q

what was pinned down from the RAND HIE

A

the true values of price elasticities

30
Q

what are two factors that determine the degree of risk

A

probability that an event will occur, and size of potential loss of gain

31
Q

what is risk pooling

A

individuals in a group each contribute a small amount to the pool

32
Q

what is the effect of pooled contributions

A

they compensate for losses

33
Q

when does risk pooling work

A

if uncertainty is unpredictable at the individual level and quite predictable in a large group

34
Q

can be health be pooled?

A

only risks like the financial risks of ill health that can be traded, can be pooled

35
Q

what does the effective risk pooling depend on

A

size of pool risk, presence of sufficiently independent risks, and independence between the expected loss and the presence of insurance

36
Q

when does moral hazard occur

A

the expected loss changes with the presence of insurance

37
Q

what are the two aspects to moral hazard

A

insured take less care to avoid the loss, and those affected seek more expensive care than if the loss was not insured

38
Q

give a moral hazard example

A

the implementation of naloxone laws led to a 14% increase in opioid related mortality, because when you have a safety net, you are more reckless with your health

39
Q

what is the goal of the economic model of demand

A

it seeks to maximize expected utility

40
Q

what is the equation for economic model of demand

A

U=U(W)

41
Q

what are the benefits of insurance in regards to risk pooling

A

price exists where risk averse individual is better off

42
Q

what is AFP equal to

A

the expected loss of the insured loss

43
Q

what is AFP

A

actuarially fair premium

44
Q

what are the limitations of the standard model

A

magnitudes of gain and losses; loss aversion; risk reduction is the only source of welfare gain; and little influence on the size of expected losses

45
Q

what does over consumption lead to

A

welfare loss

46
Q

what is Pauly suggest in his analysis of moral hazard

A

that cost sharing strategies are the solution

47
Q

what are the supply side approaches for moral hazard

A

the gatekeeper model, managed care, capacity control and financial incentives

48
Q

what is the default position of health insurance

A

demand curve when the patient faces the full cost

49
Q

what is full coverage health insurance

A

patient pays $0 of the cost of each visit

50
Q

what is coinsurance health insurance

A

fixed cost of each visit, example 75%

51
Q

what is indemnity insurance health insurance

A

insurer pays a fixed $ for each purchased service

52
Q

what is fixed co payment health insurance

A

patient pays a fixed $, insurer pays the rest

53
Q

what are two concepts that negatively affect health insurance

A

adverse selection, and cream skimming

54
Q

what does uncertainty and risk aversion lead to

A

insurance which can lead to significant welfare gains

55
Q

what does moral hazard lead to

A

significant welfare losses

56
Q

what did the RAND HIE find for cost sharing

A

in general had no adverse effects on participant health

57
Q

what were the three basic question posted by RAND HIE

A

how does cost sharing or membership in an HMO affect use of health services compared to free care; how does cost sharing or membership in a HMO affect appropriateness and quality of care received; and what are the consequences for health

58
Q

what is the leading cause of personal bankruptcy in the U.S.

A

unpaid medical bills

HSCI 206 (5 decks)

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