Summary Economics and Financing of health
care systems
By Lieke Breen
Inhoud
Lecture 1 – Is health care
... [Show More] different?.......................................................................................................2
Lecture 2 – Demand for health and health care.....................................................................................3
Lecture 3 - Asymmetric information, agency and supplier-induced demand.........................................6
Lecture 4 – Provider payment incentives...............................................................................................7
Lecture 5 – Value-based payment reform..............................................................................................9
Lecture 6 – Cost sharing and the demand for health care....................................................................11
Lecture 7 – Production of health and health care................................................................................12
Lecture 8 – Non-profit firms in health care..........................................................................................15
Lecture 9 – Payment reform for a Dutch insurer..................................................................................18
Lecture 10 – Private and social health insurance..................................................................................19
Lecture 11 – Comparative health care systems....................................................................................22
Lecture 12 – Theory and practice of regulated/managed competition................................................25
Lecture 13 – Competitive social health insurance markets...................................................................28
Lecture 14 – Hospital competition........................................................................................................31
Lecture 15 – Patient hospital competition............................................................................................34
Lecture 16 – Long-term care.................................................................................................................35
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Lecture 1 – Is health care different?
Learning targets:
- Explain the relevance of health economics
- Explain why health care is different from common economic goods
- Identify and explain sources of market failure & government failure in health care
- Interpret the presence of non-market institutions in health care
Relevance of health economics
HC sector has become the largest sector of many counties’ economies and it’s expanding
HC is not a regular economic commodity; it’s widely considered a right, not a privilege (some
exceptions; for example Trump and what he does with Obama care)
Specific features of HC can easily result in market failure and government failure
The economic organization of HC systems has a significant impact on the efficiency and equity
of HC allocation
Expansion of HC costs is increasing, because:
Advancing medical science and technology
Ageing of the population
Shift towards chronic diseases (epidemiological shift)
Increasing welfare/GDP
Expanding health insurance coverage: moral hazard
Baumol’s “cost disease”: services in HC become more expansive compared to other sectors,
because in HC you always need people which are more expansive than for example robots
and the increase in wages can’t be earned back by increasing productivity.
Perverse (financial) incentives (Fee-for-service, for example)
USA have a higher increasing of HC costs than most countries, because technology increases very fast
here.
Health spending growth; sustainable?
NO:
Harming the economy: taxes/premiums increase labor costs increase competitiveness
decreases
Increasing public health spending may crowd out other public services
Financial sustainability: if HC encounters like 20% of the GDP it gets a problem, because taxes
will rise. The pressure on taxes will eventually get too high to guarantee universal access
Longer term economic sustainability: if you spend a lot on HC, people expect very good HC
YES:
You don’t harm the economy if more people get/are healthy, because in that way more
people are able to work and this is good for the economy.
WHO: Health is a fundamental human right and the right to HC is embodied in many countries’
constitutions. Universal health coverage: ensuring all people can use the services they need, of
sufficient quality to be effective while ensuring that the use of this services does not expose the user
to financial hardship.
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