Review of Health Policy

Review of Health Policy - Review of Health Policy...

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Review of Health Policy Government Involvement in the Health Care Market o As health insurer (Medicare, Medicaid) o As direct provider of services o Financer of research and monitoring public health (CDC) o Tax Policy (‘sin’ taxes) o Regulator (standards of malpractice, drugs and medical devices, FDA) Justification for Government involvement o Externalities: individual lifestyle choices o Market failures: support/replace markets o Income/Resource distribution Determinants of Health o Lifestyle o Public Health o Medical Care o Random Effects 3 Goals of Public Health Delivery System o Right Amount of care o To right amount of people o Costs equitably distributed Summary of spending on health care o 54.6% of all health care spending is private funds; 45.4% government o in 2006 health care spending made up 16% of GDP o average per capita spending in US was $7,026 (UK: $2,724) o Cost of Health Insurance Average cost of a family plan is $12,106 Health care costs rose faster than earnings between 2000-2007 Majority of health insurance plans are PPOs or HMOs Health care services and costs o 68% of health care dollars were spent on: hospital care, physician services, and prescription drugs o Inflation in prescription drug costs have been higher than inflation in any other health care
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expenditure o The major contributors to health care cost inflation have been hospital care; physician services; prescription drug costs Health Care Inflation o Significant increases in cost of premiums 1999-2007 o Health care CPI since 1980 has always been higher than overall inflation o Administrative costs have been contributed significantly to health care cost inflation People most likely to be uninsured o 46 million people in 2006 o those less than 34 years old o black or Hispanic o In single person households or one parent families o Working in small firms with <99 employees o Southern states What has accounted for the increase in per capita medical care expenditures? o Aging o Income increase o Spread of insurance Increase in number insured Insured demand more health care o Cost disease in service sector Most services are labor intensive and productivity in this sector has increased more than the goods market resulting in a relative price increase o Monitoring, reporting, reimbursement o Medical salaries; inefficient search behavior o New technologies and treatment resulting in over consumption of medical care Do people who receive more care live longer and fare better than those who don’t? o Comparison studies of uninsured and insured patients showed no better long term outcomes o Comparison studies of private and state physician care showed no better outcomes o Comparison studies of more intensive and less intensive treatment options showed no better long term outcomes Explanations for overuse of health care o Demand side explanation
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Moral hazard and over insurance: patients are sufficiently well insured, they pay very
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This note was uploaded on 02/20/2009 for the course PAM 2300 taught by Professor Avery,r. during the Fall '06 term at Cornell.

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Review of Health Policy - Review of Health Policy...

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