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Chapter 2 Flashcards

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1
Q

studies the allocation of resources to and within the health economy.

A
  • Health economics
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2
Q
  • is the application of economic theory, models, and empirical techniques to the analysis of decision-making by individuals, health care providers and governments with respect to health and health care.
A

Health economics

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3
Q

Who define health economics as the application of economic theory, models, and empirical techniques to the analysis of decision-making by individuals, health care providers and governments with respect to health and health care.

A
  • MORRIS, PARKIN & SPENCER (2012)
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4
Q

Why did it
Emerge?

A
  1. Health and health care sector plays a major role in the economy.
  2. Because health care
    sector is SIMILAR to other sectors and industry.
  3. Because health care
    sector is different from
    other sectors.
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5
Q

Why Economic theory and models may also be used to examine the behavior of the health care sector

A
  1. Because health care sector is SIMILAR to other sectors and industry.
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6
Q

Why Health economics emerged as aseparate and specialized
discipline of economics because Health has special features.

A
  1. Because health care
    sector is different from
    other sectors.
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7
Q

may be defined by who
health economists are,
and what they do.

A

Health
Economics

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8
Q

WHO ARE THE HEALTH ECONOMISTS?

A
  1. TRAINING
  2. EMPLOYMENT
  3. ACADEMIC UNIT
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9
Q

Almost all (96 percent) held academic doctorate degrees.
▪ Nearly ¾ have received Economics
degree.

A
  1. TRAINING
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10
Q

University setting (64%), Nonprofit Organizations (15%), Government (12%)

A
  1. EMPLOYMENT
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11
Q

26% are assigned in schools of public health, 18%in school of medicine, 24% in economic department.

A

ACADEMIC UNIT

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12
Q

professionals who apply economic principles and methods to study and address issues in the healthcare sector.

A

Health economist

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13
Q

Their work involves analyzing data, designing policies, and providing recommendations to improve healthcare systems, reduce costs, and enhance health outcomes.

A

Health economist

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14
Q

ROLES AND RESPONSIBILITIES OF
HEALTH ECONOMICS

A
  1. Policy analysis
  2. Economic Evaluation
  3. Data Analysis
  4. Research
  5. Advisory Roles
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15
Q

Developing and evaluating health policies to ensure
efficiency and equity

A
  1. Policy analysis
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16
Q

Conducting cost-effectiveness, cost-utility, and costbenefit
analyses of healthcare programs and
treatments.

A

Economic Evaluation

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17
Q

Using statistical tools to interpret healthcare data and
trends

A

Data Analysis

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18
Q

Investigating the economic impact of diseases, interventions, or healthcare reforms.

A

Research

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19
Q

Providing insights to governments, healthcare organizations, and international bodies like WHO

A
  1. Advisory Roles
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20
Q

WORKPLACE FOR HEALTH
ECONOMIST

A

Government health departments

International organizations (e.g.,
WHO, World Bank)

Academic institutions and research centers

Healthcare companies (e.g.,pharmaceuticals, insurance firms)

Non-governmental organizations( NGOs)

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21
Q

SKILLS OF HEALTH
ECONOMIST

A

Strong background in economics,
statistics, and data analysis.
Understanding of public health and
healthcare systems
Ability to conduct economic
modeling and policy evaluation

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22
Q

What do health
economists do?

A
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23
Q

Who seek to
determine whether spending on new technology is
worth it.

A

Policymakers and health economists

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24
Q

A vote for today’s medicine is validation of the improvement and willingness to pay for improved quality

A

DANA GOLDMAN’S SURVEY:
1960s vs. Today?

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25
THE RELEVANCE OF HEALTH ECONOMICS
1. The Size and Scope of the Health Economy 2. the Importance Attached to Economic Problems of Health Care Delivery 3. the many health issues that have a substantial economic element
26
1. The Size and Scope of Health Economy
a. Health Care’s Shareof GDP b. Importance of the Health Economy in Personal Spending b Importance of labor and capital in Health Economy c. Time
27
is a large and growing portion of our economy.
The health care sector
28
Reasons for the substantially increased ratios
People may be buying more health services People may be buying higherquality health services, including products and services that previously were not available. Health care inflation may be higher than the general inflation rate.
29
Patients may be consulting with health care providers more frequently, doctors may be ordering more tests, or they may be prescribing more drugs.
People may be buying more health services
30
-increased prevalence of insurance, including government programs.
Health care inflation may be higher than the general inflation rate
31
consumers spent __________of their budgets on health care, as opposed to 13.8 percent on food, and 18.8 percent on housing.
17.9 percent
32
11. 1% of all employed civilians worked at various health services sites.
b. Importance of Labor & Capital in the Health Economy
33
The ultimate resource
Time
34
must also be added to our measurement of health care costs.
Time costs
35
Economic Problems of Health Care Delivery
INFLATION ACCESS QUALITY
36
Although we have deflated the spending values using the CPI, medical care prices (hospital and physician care prices) have grown faster historically than prices overall
INFLATION
37
is a common problem for maintaining health programs, and it has spurred numerous cost-containment efforts by the government
▪ Medical price inflation
38
The rising costs significantly reduces what?
accessibility to health care (i.e health insurance)
39
The problems of cost, inflation, and uninsured people ▪ have led to numerous proposals for some form of national health insurance.
ACCESS
40
Increases in the quality of care contribute to spending increases. ▪ Physicians (Professional licensure and certification) ▪ Hospitals (Quality-Assurance Programs)
QUALITY
41
Features of Economic Analysis
Scarcity of societal resources Assumption of rational decision making Concept of marginal analysis Use of economic models
42
Economic analysis is based on the premise that individuals must give up some of one resource in order to get some of another. -Consider the opportunity cost of the shares of GDP going to health care. -NOTE: Time, ultimate scare resource.
1. SCARCITY OF RESOURCES
43
ASSUMPTION: The decision maker is a rational being.
RATIONAL DECISION MAKING
44
is defined as “making choices that best further one’s own ends given one’s resource constraints.”
Rationality
45
“Irrational behavior”- .
understand incentive
46
Mainstream economic analyses feature reasoning at the margin.
3. MARGINAL ANALYSIS
47
To make an appropriate choice, decision makers must understand the cost as well as the benefit of the next, or marginal, unit. (ex: brand-name drugs)
3. MARGINAL ANALYSIS
48
economics characteristically develops models to depict its subject matter. -Economic models may be in the form of words, graphs, or equations.
4. USE OF MODELS
49
(Metaphors of reality)
Economic models
50
__________ that tell us what firms do, and how they combine resources to maximize profits, provide insights into how the health care sector works.
Economic theories
51
Consumers must often depend on health care providers to tell them whether they are ill, and, if so, what they should do. Providers often prescribe treatments seemingly irrespective of their costs.
Health sector is complicated
52
They discovered that although physicians earned 32 percent per year more than dentists, their training costs were 17 percent higher.
Milton Friedman and Simon Kuznets (1945) PHYSICIAN SHORTAGE OF THE 1930S
53
Higher Return of Investments- Higher barriers to Entry- Lower the Supply of Physicians-Raising Incomes and Rate of Return.
Milton Friedman and Simon Kuznets (1945) PHYSICIAN SHORTAGE OF THE 1930S
54
The pricing fits neatly into a model of a _______________. Price discrimination that allowed physicians to increase their profits by charging more to those patients with greater ability to pay. (NOTE: large number of practitioners
price discriminating monopolist
55
WHY DO PHYSICIANS CHARGE DIFFERENTLY?
Reuben Kessel (1958)
56
TWO FEATURES OF HEALTH ECONOMICS
The nature of heath care and health research is interdisciplinary. The institutions in the health care system, including hospitals, insurers, or regulators play major role in the analysis of health care.
57
––––relations of doctors to hospitals ------the organization and practices of the health insurance industry ------licensing and certification of health care providers
The institutions in the health care system, including hospitals, insurers, or regulators play major role in the analysis of health care.
58
Is Health Care Different?
1. Presence and Extent of Uncertainty 2. Prominence of Insurance 3. Problems of Information 4. Large Role of Nonprofit Firms 5. Restrictions on Competition 6. Role of Equity & Need 7. Government Subsidies and Public Provision
59
He stressed the prevalence of uncertainty in health care, on both the demand side and the supply side
KENNETH ARROW (1963):
60
Consumers are uncertain of their health status and need for health care in any coming period.
Demand:
61
Physicians themselves cannot predict the outcomes of treatments with certainty.
Supply:
62
Consumers purchase _______________ to guard against this uncertainty and risk.
insurance
63
The costs are paid indirectly through coinsurance and through insurance premiums that are often, although not always, purchased through participation in the labor force.
2. Prominence of Insurance
64
This lack of information often makes an individual consumer, sometimes referred to as the ______________, dependent on the provider, as an agent, in a particular way.
principal
65
The provider offers both the information and the service, leading to the possibility of conflicting interests.
3. Problems of Information
66
Economists often assume that firms maximize profits.
Large Role of Nonprofit Firms
67
many health care providers, including many hospitals, insurers, and nursing homes, have nonprofit status.
Large Role of Nonprofit Firms
68
the entry of firms or providers will cause the other firms or providers to lower their prices.
competitive market,
69
Restrict competition in Health Care: Practices include ____________,______________.________ that enjoin providers from competing with each other.
licensure requirements for providers, restrictions on provider advertising, and standards of ethical behavior
70
Many advocates believe that people ought to get the health care they need regardless of whether they can afford it
Role of Equity & Need
71
In most countries, the government plays a major role in the provision or financing of health services
7. Government Subsidies and Public Provision

health econ (8 decks)

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