Micro ch 24
In industry advanced countries, estimates suggest that income elasticity of demand for health care is about
+1
Speculative risk characteristics & EX
- chance of gain as well as loss - uninsurable - EX: gambling, starting a new business
U.S. quality of care (cons)
- increase in breast cancer - TB has reappeared and AIDS epidemic
U.S. quality of care (pros)
- longer life expectancies - most advanced equipment - half of research funding is in the U.S.
Role of health insurance
- moral hazard problem - less prevention - overconsumption - gov tax subsidy
Why the rapid rise in costs?
- perculiarities of the health care market - ethical and equity considerations - positive externalities
Pure Risk characteristics & EX
- possibility of loss, no gain - insurable EX: fire
Pure risk becomes insurable if:
- probability can be accuratly determined - irregular occurance - accidental loss - substantial loss - measurable loss - insurable interest
Factors increasing demand for health care
- rising income and normal good - elasticity - aging population and unhealthy life styles
Labor market effects
- slower wage growth - part time and temporary workers - outsourcing and offshoring
Supply factors in rising health costs
- supple of physicians - slow productivity growth - changes in medical technology
Monthly premiums for medicare insurance that private individuals pay cover how much of the cost benefits provided by the programs ?
1/4
About how many workers are employed in the US health care industry ?
12 mil
In the US, about how many doctors are there per 100,000 population?
245
Compared to younger people, those who are 65 and older tend to consume roughly
3 and a half times as much health care
One of the main differances between PPO's and HMO's is
PPO physicians charge on a traditional fee for service basis, while HMO's do not
Health care is one if the largest U.S. industries
True
Health care spending is high and is rising in
absolute terms and as a %
The perceived central economic problem associated with the US health care system is
an overallocation of resources
The fundamental problem associated with the US health care system is
at the margin, the value of health care services may be less than the value of alternative goods and services
Economists argue that in treating patients,
both benefits and costs should be taken into account by physicians
The following is not designed to reduce health care expenses for consumers
fee-for-service system
As a percentage of GDP, US health care spending is
higher than any other major industrial country
Employer provided private health insurance in the US has resulted in
incentives that encourage the overuse of healthcare
The availibility of health insurance tends to
increase the quantity of health care demand and cause overallocation
The unemployed are disproportionaly represented among the uninsured bc
most workers obtain health insurance through their employers
What are the 2 major problems facing the health care system on the US
no control of cost and must make health care accessible
4/5 of health care spending is financed by
public/private insurance
2 types of risk
pure and speculative
For many years, the price of medical care in the US has
risen as a faster rate than the overall price level
