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HSCI 206 > Unit 4 > Flashcards

Unit 4 Flashcards

1
Q

what are Hurley’s WFM characteristics of health care

A

demand for health care, externalities, information asymmetry, uncertainty, vulnerability to the integrity of a person

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2
Q

what are the fundamental misconceptions about economics and economists

A

their motivation; view of life; and understanding of others

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3
Q

what societal goals do many economists express preference for

A

low unemployment, reduced inequalities, and improved health

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4
Q

what’s the relation between economy and societal problems

A

economy = society, therefore societal problems = economic problems

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5
Q

how do economists see health

A

as an opportunity cost with zero intrinsic value

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6
Q

what is Pareto efficiency

A

an efficient allocation of resources is one from which no person can be made to feel better off without making another person feel worse off

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7
Q

how is an allocation defined as Pareto superior

A

if and only if it makes at least one person feel better off and no one feel worse off

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8
Q

what is financing

A

the activity of raising funds to pay for the operation of the healthcare system

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9
Q

what are the different forms of financing

A

direct out of pocket payments, private insurance premiums, social insurance contributions and taxes

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10
Q

what is Pareto efficiency

A

an efficient allocation of resources is one from which no person can be made to feel better off without making another person feel worse off

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11
Q

what causes an allocation to be defined as Pareto superior

A

if and only if it makes at least one person feel better off and no one feel worse off

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12
Q

what is the kaldorian criterion

A

a reallocation of resources as is a social improvement if those who gain from that value their gain sufficiently as that they could, bribe those who lose from the move into accepting that move, even if the bribe is actually not paid

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13
Q

describe a case in which information is symmetric

A

both the insurance company and the person buying insurance knew the information, and knew the other person knew it too

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14
Q

what is asymmetric information

A

a situation when a party knows more information than the other

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15
Q

what is adverse selection

A

when only the high risk people buy insurance because it is completely unobservable who is high risk and low risk to an outside party

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16
Q

what is required to eliminate adverse selection

A

the reduction of asymmetric information

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17
Q

what is moral hazard

A

when you compensate people when something bad happens, they might be inclined to do bad things

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18
Q

why does moral hazard occur

A

insurance lowers the cost of a bad outcome, making people act more reckless

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19
Q

how is moral hazard avoided

A

copayments are used

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20
Q

how does copayment affect moral hazard

A

It introduces a price differential

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21
Q

what does the demand curve represent

A

the buyers

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22
Q

what does the supply curve represent

A

the producers

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23
Q

how does a shift in demand curve affect the equilibrium

A

the equilibrium cost and quantity goes up

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24
Q

what is elasticity

A

a way to measure how responsive people are to changes in price

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25
Q

describe a case in which the demand curve is elastic

A

if a small change in price leads to a big change in quantity

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26
Q

describe a case in which the demand curve is inelastic

A

if a big change in price leads to a small change in quantity

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27
Q

what determines elasticity

A

availability of substitute and the price of substitute

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28
Q

what is a substitute

A

any two or more goods that can be used interchangeably

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29
Q

how does time affect elasticity

A

elasticity increases over time

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30
Q

what is funding and remuneration

A

the activity of allocating those funds to alternative activities within the health care sector

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31
Q

what are the three types of funding

A

fee-for-service, capitation, budgetary allocations

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32
Q

what are the two sources of finance

A

public and private

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33
Q

what are the three types of public finance

A

tax revenue, tax expenditure, and social insurance contributions

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34
Q

what is tax revenue

A

revenue collected from taxpayers by a government tax agency to support the provision of publicly financed goods and services

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35
Q

what is tax expenditure

A

forgone tax revenue not collected due to preferential treatment of a good, service, or activity within the tax code

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36
Q

what are social insurance contributions

A

contributions made to a social insurance fund that insures healthcare for members of the fund

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37
Q

what are the three types of private financing

A

private insurance premiums, out of pocket spending, private donations/non-patient revenue

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38
Q

what are private insurance premiums

A

premiums paid to a private insurer for coverage of defined health care events

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39
Q

what is out of pocket spending

A

money directly by the recipient of a service at the time the service is received

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40
Q

what are private donations/non-patient revenue

A

monies collected by health organizations not related to the delivery of a health good or service

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41
Q

how does a method of financing affect allocative efficiency in the market for services

A

through the influence on consumption

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42
Q

what are the two ways for efficiency of utilization

A

welfarist and non-welfarist

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43
Q

how does welfarist efficiency of utilization work

A

private market with cost sharing

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44
Q

how is a one payer in a multi-payer system affected

A

they have a disincentive to innovate because others will free-ride

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45
Q

what is the problem with the single payer public system

A

there is a lack of competition

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46
Q

what are the affects of efficiency in the labor market

A

coupling coverage with employment creates a disincentive to be fluid in the labor market

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47
Q

what comes with welfare loss

A

any price distortion

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48
Q

what does welfare loss depend on

A

the use of the tax revenue

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49
Q

what is altered from the tax on wages

A

the relative price of work and leisure

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50
Q

what is the issue with distributional equity

A

potential conflict between the benefit principle and the ability to pay principle

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51
Q

what is horizontal equity

A

two individuals with equal ability to pay contribute the same amounts

52
Q

what is vertical equity

A

two individuals with differing abilities to pay contribute appropriately different amounts

53
Q

what systems involved distributional equity

A

regressive, proportional, and progressive systems

54
Q

what type of system is personal income tax

A

progressive

55
Q

what type of system is consumption tax

A

regressive

56
Q

what type of system is social insurance

A

depends

57
Q

what type of system is private finance

A

generally regressive

58
Q

what type of system is OOP payments

A

regressive

59
Q

what is progressivity determined by

A

the progressivity of each source of finance; and the extent to which the country relies on each source

60
Q

why is full public coverage more equitable

A

greater breadth and depth of coverage

61
Q

what reveals that full public coverage is more equitable

A

patterns if utilization for services with different coverage

62
Q

what is it that we want to distribute fairly

A

utilization, access, treatment, and health outcomes

63
Q

what is incidence

A

the ultimate distribution of the burden of a tax or the benefits of a good

64
Q

what is net incidence

A

the distribution of the difference between tax benefits and burdens

65
Q

how is pure private finance affected by adverse selection

A

missing or incomplete markets due to adverse selection

66
Q

how is pure public finance affected by adverse selection

A

it avoids all selection problems

67
Q

what is forced by pure public finance

A

consumption of the same amount of insurance

68
Q

what causes higher administrative costs in pure private finance

A

rate setting, advertising, provider offices, beneficiary time/effort

69
Q

what causes lower administrative costs in pure public finance

A

piggyback on tax collection, streamlined administrative processes for providers, avoids need to calculate premiums

70
Q

what do pure private judgments depend on

A

on normative framework employed, and that willingness to pay is an appropriate measure of value

71
Q

how does pure private health care markets affects those with low levels of coverage

A

it reduces access to health care

72
Q

how does pure public health care markets affect moral hazard

A

it poses a greater concern for insurance induced moral hazard associated with full coverage

73
Q

what do pure public health care market judgements depend on

A

extra-welfarist frameworks that focus on health gain as the measure of value

74
Q

what are problems associated with pure private economy

A

job lock

75
Q

what are problems associated with pure public economy

A

welfare costs of taxation

76
Q

what type of system is pure private finance

A

regressive

77
Q

what are the affects of pure private finances being regressive

A

it violates the ability to pay principle

78
Q

what system is pure public finances

A

proportional or progressive

79
Q

describe a pure private health care market under public finance

A

it has less equitable patterns of utilization

80
Q

describe a pure public health care market under private finance

A

it has more equitable patterns of utilization than under private finance

81
Q

why are there three configurations of mixed systems of finance

A

because of different incentives for providers and patents, and different distributional effects

82
Q

what are the three configurations of finance

A

joint public and private financing; public and private financing as alternatives and; complementary public and private financing

83
Q

what is joint public and private financing

A

a given service is partly paid for through public sources, partly through private sources

84
Q

what is the public and private financing as alternatives configuration

A

either public or private financing is chosen

85
Q

what is complementary public and private financing

A

private sector pays for expenses not covered by the public plan

86
Q

what are the effects of joint public and private financing

A

no competition, but also no alternatives

87
Q

what is the key issue of complementary public and private financing

A

whether private covered expenses are complements to the public services

88
Q

how is the dominance of public financing explained

A

through equity concerns and market failure

89
Q

what is needed for efficiency

A

broad consideration

90
Q

what is equity

A

the burden of payment and utilization

91
Q

in health care, what is a principal

A

the third party insurer

92
Q

in health care, what is an agent

A

the provider

93
Q

what are the challenges faced by principal

A

difficulty in determining quality of providers, uncertainties, and informational asymmetries

94
Q

what are funders’ strategies for principal-agent framework

A

reduce informational deficit and uncertainty; norms to encourage better agents; and finical rewards to align incentives

95
Q

what is finical intermediary

A

an organization that raises or receive monies used to fund the provision of health care services

96
Q

what are the most common payment mechanisms

A

fee-for-service, case based funding, capitation, global budget, and bonus/incentive payments

97
Q

what is the ability to pay principal

A

principal which holds that the amount a person contributes should depend on their ability to pay, not their need or their ability to benefit

98
Q

what is the benefit principle

A

the principle that the amount a person contributes should be proportional to the benefit they receive

99
Q

what is complementary private finance

A

finance that complements public finance; often the form of private voluntary insurance for expenses

100
Q

what is free riding

A

someone who wants others to pay for a public good but plans to use the good themselves

101
Q

what is funding

A

refers to the activity of allocating those monies to alternative activities within the health care sector.

102
Q

what is job lock

A

the inability of an employee to freely leave a job because doing so will result in the loss of employee benefits

103
Q

what is progressive financing

A

a system of finance when the proportion of income that a person pays increases as income increases

104
Q

what is proportional financing

A

a system of finance when the proportion of income that a person pays is constant as income increases

105
Q

what is regressive financing

A

a system of finance when the proportion of income that a person pays fall as cinema increases

106
Q

what is remuneration

A

it refers to compensation fro individuals employed in the health care sector in return for their labour

107
Q

what is supplementary private finance

A

exists when an individual is permitted to opt out of the public plan altogether and finance care privately

108
Q

what is supplementary private finance

A

exists when a service that is included within the public plan can also be obtained privately if desired

109
Q

what is blended funding

A

a provider’s total funding comprises a mixture of payment mechanisms to optimally balance the contrasting incentives

110
Q

when are bonus payments given

A

when providers that meat a target or benchmark pertaining to some aspect of service provision

111
Q

describe case based funding

A

providers receive a fixed, specified payment for each case they treat

112
Q

what is enrolled population

A

one in which individuals sign up to receive care from a particular provider, which then receives the capitation payment

113
Q

what is funding mechanism

A

methods by which funds are transferred among participants in the funding system

114
Q

what is gaming

A

strategically assigning patients to reimbursement categories to maximize payments associated with the patients treated

115
Q

describe geographically defined populations

A

those associated with regional health authorities, and include residents who live within a defined jurisdiction

116
Q

what is the principal agent problem

A

whenever one individual or organization wants to accomplish some task of objective but must contract with another individual or organization to undertake the work necessary to achieve the desired objective

117
Q

what does it mean to skimp on care

A

to create an incentive to under-treat patients

118
Q

what is a global budget

A

a payment mechanism whereby a provider receives a total budget for a defined period of time

119
Q

what is the use of performance based payments

A

to improve the quality of care

120
Q

what does it mean for a funding scheme to be prospective

A

the total amount of funding a provider organization receives in return for meeting the health care needs of its enrolees is set before the services are provided

121
Q

what does it mean for a funding scheme to be retrospective

A

the total amount of funding that the provider organization receives is determined only after all services have been provided

122
Q

what are the incentives for fee-for-service

A

to increase the number of services, and decrease resources used per service

123
Q

what are the incentives for case-based funding

A

increase number of cases, and decrease resources per case

124
Q

what are the incentives for capitation

A

increase number of enrolees and decrease resources per enrolee

125
Q

what are the incentives for global budgeting

A

to increase activities used as basis for justifying budget

126
Q

what are the incentives for bonus payments and performance based payments

A

provide the minimum level of services to reach target

HSCI 206 (5 decks)

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