Health Care Systems: Public and Private Flashcards
(43 cards)
Principal-agent relationship
The agent is formally tasked with doing something in the best interest of the principal
Occupation vs profession
Occupation: Regulated field
Profession: Self-regulated occupation
Informal vs formal healthcare
Informal: Care provided through a predetermined relationship (e.g. parents taking care of their children when sick)
Formal: Includes a contract that states that the agent will work in the best interest of the principal
Health care system
Rules that determine the functions and processes behind the patient-agent relationship
What are the universal aspects of health care?
Licensing, insurance, contracts and funding
Licensing
Providing formalized, official credentials to professionals that are qualified to practice medical care
3rd payer relationship
When a 3rd party pays for health care on behalf of the principal
Premium
The charge for health insurance over a given time
Contractor (3 functions)
- An insurer or separate organization tasked with organizing a patient’s care
- Receives money from insurance companies and pays individual healthcare providers
- Monitors the quality of providers’ work through statistics
Explain the aspects of healthcare that make up the healthcare system
- Functions: Financing, funding, regulating
- Rules: Licensure, authorization, insurance contributions
- Institutions: occupations, professions, insurers
Actuarially fair premium
Contribution to health insurance based on individual’s average cost of health care
Factors that influence health insurance
Age, ZIP code, insurance history, risk, type and amount
What is the moral hazard problem
Situation in which insured patient uses an excessive amount of resources, which increases the cost of treatment for all people, making insurance more expensive
What is the most common solution to the moral hazard problem?
Co-payments: The patient must pay for a portion of the service while insurance pays the rest
How could providers contribute to the moral hazard problem?
Providers might encourage patients to get more treatments that are unnecessary so that they are paid more
When to use co-payments and when to use full insurance coverage
Co-payments are for predictable health issues that are more or less controlled by the patient
Full insurance coverage are for illnesses that are unpredictable and require high tech
Universal/public coverage
When an entire demographic/population is covered by health insurance
- Mandatory and a monopoloy
Monopoly
Full control with no competition
Voluntary/private coverage
Insurance that’s organized through private companies
- Can opt. out
- Voluntary and competitive
What are the problems with voluntary coverage?
1) Patients will look for the best plan, which means insurance companies can’t establish a fixed long-term rate (or else patients will move to a different company). People that need long-term care will end up paying more than those that only have short-term healthcare needs
2) People tend to put their insurance money into pools with people like themselves. This means that healthy people’s pools are often restricted for healthy people because an unhealthy person would make costs go up. This forces unhealthy people to pool with other unhealthy people, making their insurance more expensive
Beveridge model
Universal care but typically limited through rations
Bismarck model
Builds on social funds that already exist through occupational trades that each have their own pool and rules
American model
Decentralized in the sense that hospitals tend to make sure patients can afford care in their hospital specifically (e.g. hospitals promoting insurance to employers so that the employees of that company will go to their hospital for medical care)
Switzerland healthcare model
Everyone in the same age and demographic pay the same amount for healthcare
