Define healthcare
- Prevention, tx, and management of illness
- Preservation of mental and physical well-being through the services offered by the medical and allied health professions
Define healthcare system
Set of agencies and relationships that lead to the delivery of healthcare
Describe principles of production function
- Production function can loosely apply to an individual and more accurately to society as a whole
- Production function is subject to “diminishing returns”
- As greater amounts are invested into the system, the incremental impact of each unit becomes less
- At high levels of health care, the curve flattens out, so the marginal health improvement approaches zero (called “flat of the curve” medicine)
What is the purpose of stewardship in a healthcare system?
Provides guidelines and standards that must be upheld (ex: drugs are Rx and can’t just be purchased; surgeons must sterilize instruments)
How do healthcare systems in different countries differ?
- Financing for healthcare
- Provision of healthcare services
- Payments for healthcare services
- Effectiveness of healthcare services
Describe the “tax-funding” type of healthcare system
- Majority of cost of collectively provided healthcare is paid out of direct and indirect taxation
- “Single-payer” model
- Ex: Canada, UK
Advantages to the tax-funding healthcare system
- Generally uniform standards of healthcare provision
- Generally uniform access to healthcare services
- Reduced administrative costs for provision of services
Disadvantages to the tax-funding healthcare system
- Subject to economic changes w/in the country
- Subject to the will of the electorate in the country
- Politicization of healthcare delivery
Describe the “social insurance” type of healthcare system
- Funds raised through a non-government or quasi-governmental bodies, w/ fixed membership charges or membership charges linked to wages
- Ex: Belgium, Germany, France
Advantages to the social insurance healthcare system
- Generally uniform standards of healthcare provision
- Generally uniform access to healthcare services
- Reduced administrative costs for provision of services
Disadvantages to the social insurance healthcare system
- Subject to economic changes w/in the country, specifically in the job market
- Challenges in dealing w/ marginalized populations (ex: unemployed)
Describe the “private insurance” type of healthcare system
- Premiums are individualized and generally risk rated (greater risk = pay more)
- Can be conventional market insurance (no outside manipulation) or controlled private insurance (some artificial manipulation to achieve social equity)
- Controlled prevents insurance companies from not covering pre-existing conditions
- Ex: US (formerly conventional, then controlled, now shifting to conventional), Switzerland (controlled)
Advantages to the private insurance healthcare system
High standards and access of healthcare provision (for some)
Disadvantages to the private insurance healthcare system
- Generally non-uniform access to healthcare services
- High administrative costs for provision of services
Describe the “co-payment or user fees” type of healthcare system
- Almost every country has some element of direct payment for collectively funded healthcare services
- Refers to any payments made for care
- Found in all of the different funding structures
- Exists to partially fund the system, but mainly to combat “moral hazard”
- Most countries have this, except Canada
Define moral hazard. What are the 2 forms?
- How an individual may change how they utilize healthcare services based on whether they have to pay or not
- Ex-ante and ex-poste
Describe ex-ante moral hazard
Changes to the probability of requiring healthcare services based on whether you pay or not (ex: whether or not you choose to play a sport based on if you have to pay if you get injured)
Describe ex-poste moral hazard
Changes in the use of healthcare services based on whether you pay or not
Describe the fees per patient or service type of payment for health services
- Most common method of payment
- Used in specialist services in hospital, pharmacy, individual clinician practice
Advantage of fees per patient or service type of payment for health services
Encourages efficient delivery of service
Disadvantages of fees per patient or service type of payment for health services
- Potential quality concerns
- Supplier induced demand
Describe the capitation fees and salaries type of payment for health services
Payment based on population served rather than specific services rendered
Advantages of capitation fees and salaries type of payment for health services
- Easy to administer
- System can be incented to specific endpoints
Disadvantage of capitation fees and salaries type of payment for health services
Volume and access concerns
