An Introduction to
Benefits, Funding and Rules
Todays Objectives :
Understand what Medicare is
Know the Parts of Medicare and what each part
Understand how Medicare is funded and
recipient cost sharing obl
Final ECN 355 Health Economics
1. Sovereignty does not require
A) Boundary Maintenance.
C) Negotiating with other physicians.
D) Maintaining some distance from patients.
2. A small town in Southern California has only o
Consumer surplus is the area below the
demand curve but above the actual price paid.
Economic Efficiency and
Cost Benefit Analysis
Consumer surplus is the difference between
the amount consumers are willing to pay and
A MICROECONOMIC REVIEW
INCENTIVES AND THE HOLIDAY PARTY
Microeconomic Tools for
CHOICES AND TRADEOFFS
Opportunity Cost requires us to look
at the full cost
DEMAND AND SUPPLY
OF HEALTH INSURANCE
WHAT IS INSURANCE?
Consider a club with 100 homogeneous members. It seems
that about once a year one of the 100 members gets sick and
incurs health care costs of $5,000. The incidence of illness
seems to be random. Cl
WHO ARE THE HEALTH ECONOMISTS?
96% hold academic doctorate degrees, nearly
75% in economics
64% work in a university setting, 15% for
nonprofit organizations and 12% for
government, mainly federal
Only 24% of health economists hold
DEMAND FOR HEALTH CAPITAL
The Demand for Health and
Health Care Capital
CONSUMER AS HEALTH PRODUCER
It is not medical care as such that
consumers want, but rather health. People
want health; they demand medical care
No substitution possible between
physician and nurses hours.
THE PRODUCTION OF HEALTH
THE PRODUCTION FUNCTION
Consider that the role of health care in
society, including medical care provided
by physicians, is ultimately a production
12. Suppose we adopt a health care system where people are required to to work as a manager in a healt
21. If you decide spend completely out of pocket
health care or do without (Homo Economicus erotic dream). The Smiths