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16 Cards in this Set
- Front
- Back
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Annual Magnitude in the US |
Annual magnitude $9,990 per person $3.2 trillion dollars |
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Consumer decision making on health care expenditures When does total utility reach is peak |
They choose the quantity of medical services and quantity of all other goods to maximize utility. (MUq/Pq) = (MUz/Pz) when the marginal utility gained from the last $ spend on each product is equalized |
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Elasticity - Price and Income What is the formula Scale-Free Elasticity in Price Elasticity in Income |
Change in quantity demanded / change in price ED for Physician visits can be compared with nursing home days, even though consumed in different units steep (inelastic) price increase leads to a smaller fall in # visits demanded If income increases - consumer is willing and able to purchase more quantity. |
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Grossman Model Individuals goals What does it take into account? |
Health and "Home Goods" how decisions today affect outcome in the future Time and Resources (Money) = produces healthy time and leisure. |
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What are home goods? |
Everything except work and time specifically. Health producing activities. |
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Limitations of Grossman's Model Refinements |
Assumes perfect certainty as to future outcomes. Introduce illness states, Employment influences health, Effectiveness of medical care to be random, health is a risky venture. |
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Valuing Human Life Statistical Value of Life Human Capital Approach Willingness to Pay Willingness to Accept |
Cost intervention which saves specified number of live Individual's future earnings - used in legal applications (Doesn't account for human behavioral choice) Pay for reduction in risks to life and limb. Limited by budget constraints $0.7 and $7.0 Million Compensation required to accept additional risk. $1.6 and $10.4 Million |
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QALY Person with opportunity for treatment which will extend life by 1 year with probability 0.9 (Fi), and by two years with probability 0.5 (F2). The patient will die with certainty after 2 years. Quality weight q1 = 0.8 in year 1, q2 = 0.6 in year 2. The discount rate is 0.05 per year. |
(Fi * Qi) / (1+d)^t QALY = (0.9 * 0.8)/ 1.05 + (0.5 * 0.6)/(1.05)^2 = 0.96 |
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Three methods for determining QALY Weights Time-Trade-Off (TTO) Standard Gamble (SG) Visual Analogue Scale (VAS) |
remain in a state of illness for a period of time, or be restored to health with a shorter life expectancy " " or medical intervention which has an equal chance of perfect health or killing them Rate of ill health scale from 0-100 |
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Affordable Care Act Reforms Premium (flat fee) increases |
Required to have insurance Individual mandate (Penalties) Premium credits and cost sharing subsidies 2014 - $95 - 1% of household income 2015 - $325 - 2% of household income 2016 - $695 - 2.5% of household income |
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Common features of systems in developed countries |
Unified Systems Universal Coverage Not-for-Profit Payers Centralized and Coordinated Cost Control Mechanisms Relative emphasis on primary care |
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Socialized Medicine Risk Aversion Risk Premium Expected utility and certainty equivalents |
The availability of medical and hospital care for all by means of public funds The behavior of humans when exposed to uncertainty, attempt to reduce the uncertainty. The greater the risk aversion the greater the demand for insurance. Is a form of compensation for investors who tolerate the extra risk. The amount of cash that would yield the same expected utility off of your insurance investment |
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Moral Hazard Behavioral Hazard Adverse selection |
Lack of incentive to guard against risk where one is protected from its consequence. If insured a person will take more of a risk. If uninsured the person will take less of a risk. The fundamental trade-off between insurance and incentives. People will underuse high value medical care because they make mistakes. Where the seller has more information than the buyer and the party with less information is at a disadvantage. |
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Co-Pays, Co-insurance, and deductibles |
fixed amount that you pay for covered services. The percentage you pay for covered insurance typically after you pay the deductible. The amount that you have to pay until insurance will start paying for the medical attention. |
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8 Facts that explain whats wrong with American Health Care |
Americans pay way more for health care than anyone else
We pay doctors when they provide lots of health care, not when they provide good health care
Half of all health-care spending goes toward 5% of the population
Our health insurance system is the product of rand WWII-era tax provisions
Insurance companies have small profit margins
Getting health care in the US is dangerous
1/3 of health-care spending isn't helping
Obamacare is not universal health care |
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Free market health care expenditures debate |
Open ended question. Know the facts. Should it be a consumer driven system. Pros and cons. |
