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Public Finance > Health care system > Flashcards

Health care system Flashcards

1
Q

Economically, how is health seen?

A

It is seen as a uncertain good that has economic consequences for individuals

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2
Q

What are the economic consequences that health bring to individuals?

A

Lose the ability to work + health care expenditure

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3
Q

What is the unitary premium?

A

The amount I have to pay for each euro of reimbursement 0 < p < 1

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4
Q

What is the main cause of the market failure in insurance markets?

A

Asymmetric information

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5
Q

What does asymmetric information cause?

A
  • Adverse selection –> the company isn’t able to distinguish between H and L individuals ex-ante
  • Moral hazard –> company isn’t able to observe individuals’ behavior after the contract signing. They might engage in reckless behavior or increase their consume of health care goods (third payer)
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6
Q

What happens when the insurance company offers different contracts?

A

Individuals will want to purchase the cheapest plan to L people and the company will incur in a loss.

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7
Q

What happens when the company offers only one contract?

A

Only H individuals will buy it because the P is too expensive for L people

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8
Q

What happens when the company offers two contracts with an average P for all?

A

Only H individuals will buy it because the P is too expensive for L people, the company will raise P, only H will buy…. until only one type of individuals will be on the market facing very high prices, which not everyone can afford = market failure

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9
Q

What is the best solution for insurance companies?

A

To offer two contracts that induce customers to choose the best one, that is, full coverage for H people and partial coverage for L people.

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10
Q

What are the limits for co-participation in health expenditure?

A
  • When health care demand is rigid (dialysis), recurrent

- A high coverage level must be guaranteed.

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11
Q

What are the main issues that arise as a consequence of the private health system?

A
  • Over-expansion of the health-care (MH)
  • No equity and partial coverage (AS)
  • Typically, the health insurance market is only partially competitive (oligopoly)
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12
Q

How is Asymmetric information different in public and private health systems?

A
  • Public –> it is on the demand side, individuals may not know how to correctly evaluate the quality of the service
  • Private –> it is on the supply side, companies cannot differentiate among H and L individuals
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13
Q

What are the pros of public health care system?

A
  • Equity on health care access
  • No cream skimming –> private companies may not provide insurance for very H individuals. In the public system everyone is covered
  • Compulsory coverage –> no adverse selection problem, everyone is covered and everyone contributes
  • Easier to keep health expenditure under control –> there is a fixed budget
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14
Q

What are the limitations of the public health system?

A
  • Inefficiency in production –> no competition, waste of resources and corruption
  • Long waiting list
  • Centralized decisional system –> less flexibility
  • Inefficient incentives to efficient choices
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15
Q

What is a solution to the limitations of the public health system and why?

A

Introduction of a quasi-market system:

  • Since institutions will receive a reimbursement per patient, they have an incentive to attract patients
  • Competition among hospitals because authorities will purchase services from hospitals that guarantee the highest efficiency
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16
Q

What is the difference between medicare and medicaid?

A

Medicare –> no income requirement 65 + yrs

Medicaid –> low income and disabled people

17
Q

In the US, who are the uninsured people?

A

Medium-low income individuals, young, self-employed or working at small-medium companies that don’t offer coverage

18
Q

How is the insurance market in the US?

A

Not competitive at all, most states have a 65% market share for the biggest company

19
Q

What are the 5 phases of uninsured individuals graph in the US?

A

1-17 –> low uninsurance rate, parents’ coverage also covers them
18-28 –> young adults either studying or working a job that doesn’t allow economically to purchase an insurance
29-37 –> individuals working for smaller companies that don’t offer coverage and cannot afford on their own
28-65 –> working people at jobs that pay them coverage
65 + –> medicare adopters

20
Q

What was the obligations opposed by the Obama Reform on individuals?

A
  • Compulsory insurance
  • Subsidies to who cannot afford paying insurance premium
  • Fiscal incentives –> tax deductions if you pay for the contract
  • Less instrigent requirements for medicaid
21
Q

What was the obligations opposed by the Obama Reform on employers?

A
  • Obligation to provide insurance if N >= 50

- Subsidies for companies with N< 50

22
Q

What was the obligations opposed by the Obama Reform on insurance companies?

A
  • Not possible to refuse H individuals –> avoid cream-skimming
  • Insurance premia cannot overcome threshold of 9.5% of the subscriber’s income
  • Affordable insurance exchanges (inform citizens) –> decrease AS
23
Q

What happened in 1992 with the italian health system?

A

Reform, introducing quasi-market features

24
Q

What are the 4 levels on the Italian health system?

A
  • Central government
  • Regions
  • ASL
  • Health care providers
25
Q

What are the duties of the central italian government on the health provision?

A
  • Controls the distribution of revenue
  • Define the national statutory benefits package
  • General guidelines for prevention, diagnosis and therapies
  • Coordinates and monitors regions
26
Q

What are the duties of the italian regions on health provision?

A
  • Autonomy with macro structure of their health systems
  • Organizes and delivers services
  • Ensure benefit package
27
Q

What are the duties of the ASL on health provision?

A
  • Are managed by a general manager appointed by the governor
  • Responsible for territorial planning
  • Purchase and deliver primary care
  • Funded through a fixed per-patient reimbursement
28
Q

What are the duties of the italian health providers on health provision?

A
  • Public hospitals are either managed by ASL or operate as semi-independent public enterprises
  • Hospitals funded through perspective payments
  • General practitioners are paid a fixed amount/patient (max 1500)
  • Salary is determined by the State, it varies with age and specialization
29
Q

What is perspective payments?

A

Patient goes to the family doctor who provides them with a diagnosis and are directed to a diagnosis related group (DRG) that have an allocated resource. This way it is possible to have an estimate of the expenditures ex-ante.
If there is a wrong diagnosis, then there will be an expenditure problem

Public Finance (5 decks)

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