lecture15fall2006

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Unformatted text preview: + + , & & ! , ! ,. & /(0 , . 1 '( 2 1 , . ( '( 2 1 , . 34 !" # $% & '( ) * ( &#& ,!+ ! 6 + + & #-7 &, , &9 # ! 7 & , 5+ + # 7 # !. ! # , 7 ! 7, ! ! < ; 6& 0 & (( (9 : , ! , # ! 7 , 3 1! # 9 + # 6 & 8 + (( (9 & 1 ! !; , 1 # + <! ! '( 2 (! , ! & & 90 & = , + & + , 9 > <! ! & & ! , , 9 &# & <! ! ! &7 , 9 &# &! ? @A BA * @ 8+ ?+ <! ! '( 2 (9 + <! ! C !; 9 1 ,.! ,. # 7 < 6& C 9( , 4( ! B 15 Health Care Spending (% of GDP) Health Care Spending in OECD Nations in 2002 Spending in the U.S. averages $5,800 per person, and nearly 15% of GDP. 12 9 6 3 0 ! <! ! Countries like the United Kingdom and Japan spend a much smaller share on health care. Slovak Republic Korea Mexico Poland Luxembourg Turkey Finland Ireland Czech Republic Spain Austria United Kingdom Hungary Japan Italy New Zealand Norway Denmark Australia Belgium Netherlands Sweden Portugal Greece Canada France Iceland Germany Switzerland United States 2 ? @A BA * @ 8+ ?+ <! ! # < + D + & & ! E ! , , F '( '! ( , & B $ %' ( &) )" * +% ,& ) / 0 $ ) // +) -+ $/) $ % 4 3 + & %3/ , & Roughly 44 million individuals were uninsured for the entire 2002 calendar year, or 15% of the population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im 3 4+ 7 * + Although /) buys less expensive4+7 /) + . ,+ , 8 health insurance on his own, his8 net 8 % &% & income is lower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× * $30,000 + 0.01 × $30,000 − $100 = 173.2 )( ) , 9 H U= Y (0.99 × $30,000 − $1 + 0.01 × $30,000 − $100 + $100 − $1 = 173.2 )( ) &G , + + & & ! + & , C! & & , , , , I @, , $! $ & , % & , 7, 9 , , 9 H & 9 7 & % , 77 && & C & ! , D /2 3E ! $ 10 I Price of each visit $ & 9 , # & #& %, , , , , , + Deadweight Loss A Health insurance shifts the consumers’ demand, leading This overto more consumption. consumption leads to deadweight loss. Q1 B The “right” amount of health care is where D=S. & +, & S=MC ! 9 & , 9 $100 ! C D Q2 Number of visits to doctor’s office $10 I I $ $ ! & , =, # , , > C , & ! & D !& !9 9 !E 9 ! ! $1 $ of Marginal Health Benefits IFurther spending nitially, dollars of spending lead to has diminishing high benefits. returns. $5 A , & , 9 $ ! & ,, & , , B C $1,000 $2,000 $5,000 $0.10 $ of Medical Spending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xcept for the uninsured, most Americans have generous health coverage. 9 H <! ! ! Quality of Health Insurance 44 million Population 13 * * "# $ , % <! !5 & 5 & ! : , , , F : ! & 9 @* ? B@< G +@ I . + , , ! + 9 & ! , 9 $ @<8. ? <B ? 8 [email protected] . B 5 ! , H & : 9# !B = > & $ ! @, & , , !G , : , #& ! &$ ! + : 9 , , @* ? B@< G +@ I . % , , % , ! $ $ @<8. ? <B ? 8 [email protected] . B 5 , : @* ? B@< G +@ I . ( & @<8. ? <B ? 8 [email protected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This note was uploaded on 02/07/2011 for the course ECO 479 taught by Professor Staff during the Fall '08 term at Kentucky.

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