PPD514 ECON FINAL

The denial of beneficial medical care for nonmedical reasons

rationing

for QALYs, each life year is assigned a value from _______________

0 to 1

PCORI was established by the ____________

ACA

-payment to an owner or factor of production in excess of the costs needed to bring that factor into production ("excess profits")

Economic Rents

allocatively efficient

MB = MC

allocatively efficient is where

MB = MC

consumers make choices on spending based on ____________ and ______________

MC, MB

what is the unit of measurement for cost effectiveness research?

QALY

what impacts sensitivity of price to quantity?

moral hazard, type of service, income

insurance company excludes those with pre-existing conditions

adverse selection

using unobserved attributes to select

adverse selection

one side (buyer or seller) has more information than the other side -- examples

adverse selection, moral hazard

setting a cost-QALY threshold is based on an assessment of:

affordability, societal assessment, opportunity cost

why have health care costs been rising?

aging population, higher income, insurance coverage, technology, increased prevalence of disease

Buyers with higher value goods gain access; buyers with value<price do not get the good

allocatively efficient

MB = MC

allocatively efficient

compares health interventions to assess what works best for improving health

comparative effectiveness research

•What ICER does -______________________ effectiveness -_________________ effectiveness also •A _____________ focused approach •A ______________ affordability approach

comparative, cost, qaly, budget

perfect markets have perfect _________________________

consumption efficiency

benefit compared to cost

cost benefit analysis

what are the three different types of cost effectiveness research?

cost benefit analysis, cost effectiveness analysis, cost utility analysis

Comparing alternative to achieve a single outcome

cost effectiveness analysis

analysis with the goal of obtaining the most health possible for the available resources

cost effectiveness research

compares the cost of medical intervention to a measure of the outcome's value

cost effectiveness research

what is the cost effectiveness ratio?

cost of intervention/improvement of a single outcome

Often simply called cost effectiveness research

cost utility analysis

cost effectiveness research can either raise costs or lower them -Implies all care with benefit should be __________________ -But has shown procedures with _________________ benefit -Also can identify procedures with no additional benefit compared to less ___________________ treatment

covered, negative, expensive

What does PCORI do? -Funds systems for ________________, ________________ development -Support _______________ effectiveness studies -No ______________ approach

data collection, method, comparative, QALY

distribution

equity

a spillover effect associated with production or consumption that extends to a third party outside the market

externalities

consumers and/or producers may not experience the actual MB or MC or a decision

externalities

market failures

externalities, public goods, market control, information failures

what problem do public goods create?

free rider

What's the alternative to markets?

government control

examples of non price rationing

government, time

is a direct input into our utility function

health

medical care is not valued; just in it's ability to produce value in _________________

health

•Evidence (RAND, Oregon) shows that insurance -Increases use of _______________ -Minimal improvements in most ______________________, except for _____________________ -Some new evidence suggesting reductions in _______________

health care, health outcomes, mental health, mortality

what is the unit of measurement for comparative effectiveness research?

health outcome

where is CE used? •Primary focus on the assessment of new technologies (__________________________) •Private sector plans use in making ____________________ decisions •_____________________ does not use CE

health technology assessment, coverage, medicare

•Cost-effectiveness analyses reveal the trade-offs involved in choosing among alternative interventions, with the goal of obtaining the most ________________ possible for the available ________________

health, resources

Why is spending the US higher?

higher prices of labor and pharma, higher administrative costs, differences in population

what does CBA ask?

if you spend a dollar, do you get a dollar or more of benefit?

types of budget constraints

income, time

solutions to moral hazard

increase the amount individuals have to pay, utilization management, provider incentives

one side (buyer or seller) has more information than the other side

information problems

ICER

institute for clinical and economic review

what is the purpose of health insurance?

insulate patients from financial risk

we want to spend the ____________ per QALY

least

productively efficient

least costly mix of inputs for a given level of output

a QALY incorporates what outcomes?

life years, quality of life

health care costs are often hidden by?

lost wages, taxes

production efficiency graphed

lowest point on AC curve

what are some restraints on increased spending?

managed care, HMOs, PPS and DRG, recession, technology slow-down, higher patient cost sharing, reforms to reduce use

the focus of cost effectiveness research is the ________________ analyses of health care interventions

marginal

either producer or consumer has some control over the price and quantity

market control

_________________ is a derived demand

medical care

inputs to the production function of health

medical care, education, age, consumption, time, environment

ways to measure the marginal productivity of inputs

medical spending, health behaviors, education

for cba, you express benefits in _____________________ value

monetary

imperfect monitoring of behavior

moral hazard

individuals use more because they have insurance

moral hazard

how do we measure health outcomes?

mortality, disease progression, disease prevention, quality of life

generate a cost to a third party without compensation

negative externality

when is a project worth investing for CBA?

net present value is positive or when benefit cost ratio is greater than 1

perfect (competitive) markets have:

no barriers to entry or exit, many firms, homogeneous goods, price takers, perfect information

supplier of that good cannot prevent people who do not pay from consuming it

non excludable

types of rationing

non price, price

the same unit of the good can be consumed by more than one person at the same time

non rival

what are public goods?

nonexcludable, nonrival

health is a _____________ good

normal

Issues with QALY: •Potential impacts on _______________ life quality •_______________ have fewer LY to work with •_____________________ based perspective •BIG ONE: How much is life ____________ -How much are we willing to ___________ for a QALY? -Important for assessing the _______________________ of an intervention

others, elderly, population, worth, spend, absolute value

point at which no one can gain without someone else being made worse off

pareto efficiency

PCORI

patient centered outcomes research institute

perspectives not captured through CE

patient, legal, cultural, budget, logistics

pareto efficiency is represented as:

point on the PPF

generate benefits to a third party without them having to pay for it

positive externality

demand for health - consumer side: 1. __________________ for health 2. willingness to pay for __________ and __________________ inputs 3. allocation of __________________

preferences, health, production, budgets

ICER is ___________________ (supported by _________________)

private, philanthropy

health is an input into the _________________________ in our utility function

production of other goods

Producers produce with least-costly mix of inputs for a given level of output

productively efficient

components of costs (for cost effectiveness research)

program costs, costs incurred by those affected, costs in other parts of health system

Concerns with CE?

quality of info, perspective, bias, time frame

solution to externalities

regulation, subsidies, taxes

why do we need to ration care?

scarcity

Characteristics of a market: buyer pays ______________ for goods/services _________________ determine how much to consume based on their _________________ relative to prices market prices coordinate ______________ preference for the role of markets over ____________________ markets can generate an _________________________

seller, consumers, valuation, decisions, central planning, efficient allocation

examples of negative externalities

smoking, pollution

what are the powers of the government?

spend, tax, regulate

consumers will spend more on health up to the point where their ___________________ does not bring them an equivalent amount of _______________

spending, benefit

Why isn't the healthcare market a perfectly competitive market? _____________________—insurers, governments—often have an interest in health care _____________. _________________ often don't know what they need and cannot _______________ the treatment they are getting. Health care providers are often paid not by the patients but by __________________ or __________________ health insurance. The rules established by these _______________, more than market prices, determine the _____________ of resources.

third parties, patients, evaluate, private, government, insurers, allocation

health impacts income in what ways?

time spent working, amount earned, prices

•Government management -Payments can be _________________ -Payment rates may be tied to ________________ (e.g., trading votes for higher Medicare hospital reimbursements) -_________________ lack expertise -Depends on __________________ of government •Make markets better -Improve market functioning through __________________

too high/too low, politics, legislators, efficiency, regulation

•Utility function (indifference curve) -Individuals value health but also value other things -Individuals are willing to make ________________________ between health and other goods, but at varying rates (based in some degree to their stock of health)

trade-offs

aka indifference curve

utility function

what are the 3 elements for the demand for health?

utility function, production function, budget constraint

examples of positive externalities

vaccines, medical research, information, technology

•Concerns with effectiveness research -Ignores _____________________ in effectiveness by patient type or provider skill -Role of _____________________ studies versus RCTs -Are demands for ______________ (baseline is no research) a cover for opposition? -____________________ care

variation, observational, purity, rationing

What's the problem with high spending in healthcare?

waste, worse health and economic disparities, crowds out other social priorities

how can health directly influence our budget constraint? impact on ______________/____________ (through time spent working and/or ability to work) impact on _________________ (medical spending to improve health)

wealth, income, spending

what are some techniques for setting a cost-QALY threshold?

willingness to pay studies, value of statistical life