Current Issues in U.S. Health Economics: Summary for ...
Current Issues in U.S. Health Economics: Summary for Health Economics Course (ECN 132)
Colin Cameron Department of Economics U.C. Davis
Revised February 2022
? The health care industry can benefit greatly from economic analysis, especially microeconomic analysis.
? More than many other areas of economics this theory needs to be modified or extended to accommodate institutional features.
? In particular health consumers are buying a product they know little about (information) with someone else's money (third-party payment) due to insurance (uncertainty).
? The big current issues always include the increasing cost of health care.
Colin Cameron: Health Economics Summary
2
A. Overview of U.S. Health Market B. Health Insurance in the U.S. C. Theory of Health Insurance D. Economic Evaluation of Health Services E. Individual Demand for Health F. Providers (Physicians, Hospitals, Pharmaceuticals) G. Government H. Medical Technology I. International Comparisons.
Colin Cameron: Health Economics Summary
3
A. Overview of U.S. Health Market
Total expenditures in 2019
? $3,800 billion
(or $3.8 trillion)
? $11,600 per capita (Based on population of 328 million)
? 17.7% of GDP (Based on GDP of $21,400 billion).
Use of Funds ? The big three (hospital, physician, drugs&products) are 65% of total.
Source of Funds ? Roughly 50% public and 50% private.
? Only 11% is out-of-pocket. Third payment is key feature of health market.
Colin Cameron: Health Economics Summary
4
Trends since 1900 ? Expenditure risen dramatically and continuously and forecast to continue. ? Dramatic switch away from out-of-pocket payment to insurance. ? Hospital days little changed but costs much larger as more labor-intensive. ? More physician visits but smaller share of pie. ? Drugs decreased but now increasing share of pie. ? Nursing home care and home health care are growth areas. ? Health care expenditures have risen everywhere in the world. The U.S. has
the largest expenditures because of higher base and higher growth rates.
Future ? Pressures exist for continued increase. Forecast 20.0% of GDP in 2028. ? At same time U.S. is a real outlier and radical change is possible.
Colin Cameron: Health Economics Summary
5
Use of Funds in 2019
Category % of Total
Hospital
32
Physician & clinical20
Drugs & Supplies 13
Other professional 12
Nursing Home
5
Home Health
3
Administration costs 8
Public Health
3
Research
1
Construction
4
Total
100
Trend since 1960 Biggest Issues
Static
Managed care; technology
Static
Managed care; physician income
Up
Formularies; technology
Up Up Up Up Down
Standardization Switch from government to private
Colin Cameron: Health Economics Summary
6
Source of Funds in 2019
Category
% of Total Biggest Issues
Public (roughly 50%)
Medicare
21 Insolvency; consumer choice.
Medicaid
16 States; managed care; elderly poor; children
Other public 11
Private (roughly 50%)
Private insurance 32 High cost; reaching uninsured;
future of Obamacare.
Out-of-pocket 11
Investment
5
Other private 4
Total
100
Colin Cameron: Health Economics Summary
7
B. Health Insurance in the U.S. General Principles ? Risk-pooling is the reason insurance works. ? Risk-aversion is the reason consumers purchase insurance. ? Adverse-selection can lead to failure of insurance markets ? Moral hazard can lead to welfare loss due to excess consumption of health
services (Paully, and Manning et al RAND study).
Health Insurance Terminology ? Copayment ? a lump sum paid by insured per service e.g. $20 ? Coinsurance ? a percentage paid by insured per service e.g. 10% ? Deductible ? an annual amount paid before any insurance cover
e.g. $2,000 ? Premia ? the price of a health insurance policy. ? Pre-existing conditions ? health conditions that may not be covered.
Colin Cameron: Health Economics Summary
8
Rand Health Insurance Experiment
? The RAND study in the late 1970's randomly gave individuals health insurance policies with varying coinsurance rates.
? Finds that demand for medical services responds to price. ? Arc price elasticity ranged from 0.1 to 0.2.
Health Insurance Coverage
? Much insurance is employment-related or government provided.
? 28 million or 8.6% did not have health insurance at any time in the year 2020.
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- preparing for etter health and health care for an aging
- national center for health statistics
- supply and demand projections of the nursing workforce
- a review of current health education theories
- current issues in u s health economics summary for
- nurses in the united states with a practice doctorate
- the current and future role and impact of medicaid in
- perspectives on health care in the united states
- the health crisis in russia university of denver
Related searches
- current issues in america today
- current issues in america
- current issues in sociology
- current issues in america 2019
- current issues in public education
- current issues in health care
- current issues in strategic management
- current issues in information technology
- current issues in dentistry
- current issues in education
- current issues in healthcare 2019
- current issues in education 2019