Context of Health Care
Identify key elements that are driving changes in health care
Identify key approaches to controlling health care costs and
resulting ethical issues
Identify key changes
Chapters 5, 6 and 11
Understanding Costs, Bending the
Cost Curve and Maximizing
The Costs of Production
Explicit costs = accounting costs
Economic profit= Total
Chapter 1 Introduction to
What is economics?
Social science concerned with the efficient
use of scarce resources to achieve the
maximum satisfaction of economic wants.
Insatiable wants: wants can never be
Anti Trust Laws
Sherman Anti Trust Act
Every combination in the form of trust in restraint
of trade is illegal
Essentially outlawed mergers to create a
Outlawed price fixing
Violations of price fixing ar
Overview of Healthcare Financing System
Allows Insured to pool risks
Indemnity: pay a premium and insurance pays your bill or
percentage of it.
HMO: pay lower fee with a more narrow list of providers.
Chapter 4 Describing, Evaluating
and Managing Risk
Objective: factual probability.
Subjective: what are the chances my building
chances on fire, based on an opinion
Components of Risk
Situation when the market does not provide
the optimum amount of a particular good
Goods with external costs are overproduced
Goods with external benefits are under-prod
Demand and Supply
Chapters 7 and 10
Demand amount of quantity demanded at
a given price level
Demand for physician services is defined as
Law of Demand
As prices fall, quantity demanded rises
As prices rise, q
An Overview of the U.S. Healthcare
Health Care Inputs
Healthcares Contribution to Publics Well-Being
Efficiency what is the best way to use resources
to maximize output
Marginal Analysis Figure 2.1
Health Care Outp
What is Behavioral Economics?
Psychology applied to economics
People change preferences with circumstances
Willing to accept high rates for short term
Price Elasticity of Demand
Sensitivity of demand to a change in price
Percentage change in Quantity over percentage
change in price
(Q2-Q1)/(Q1+ Q2)/2)(P2-P1)/(P1+ P2)/2)
>-1 = inelastic
<-1 = Elastic
=-1 = Unit Elas
A brief history of
health care ethics
Babylon, 18th century BCE: The Code of
Greece, 5th century BCE: The Hippocratic school
The Hippocratic Oath
ETHICAL ISSUES IN
WHAT IS ETHICS?
A brief comparison
The listing of standards
of what is right & wrong, &
good & bad, in a
Natural law ethics
Aristotle numerous other schools St. Thomas Aquinas
Whatever is contrary to the order of reason is contrary to the
nature of human beings as such; and what is reasonable is in
accordance with human nature as such. The
Principlism in health
Why are we here?
Were trying to learn from our moral failures.
The Tuskegee Syphilis Study is one of many
The Belmont Report (1974), written in part as a response to the moral failures of
the Tuskegee Syphi
A C ON SEQUEN TI AL IS T E TH I C A L T H EO RY
Utility can be thought of as happiness, well-
being, or welfare.
The good is prior to the right.
Jeremy Bentham (1748-1832)
John Stuart Mill (1806-1873)
Benthams principle of utility
By the pr
Virtue ethics lacks principles.
question What should I do? is preempted
by What kind of person should I be?
What kind of moral character should I cultivate?
Right actions flow from virtuous character.
WHAT IS VIRTUE?
ANCIENT GREECE & A
The ethics of biomedical
The importance of biomedical research
and the plurality of ethical issues.
Vice Media: Post-antibiotic world
The subject must understand at least the following
The purpose of the res
A U TO N O M Y, IN FO R M ED
C O N S EN T,
C O N FID EN TIA LITY
Autonom y & paternalism
Comes in degrees
A value ( we should be able to )
A prima facie one: unless there is a powerful
reason not to such as being demented or a
D EO N TO LO G IC A L ETH IC S
The word deon is Greek for duty.
The right is prior to the good.
there are some things which a moral man will not do, no
matter what It is part of the idea that lying or murder are
wrong, not just bad, that these are thin
Some opening questions
An obligation? ( in the catholic church you have
a duty to reproduce , no contraception)
What kind of medical problem is infertility?
Is diagnosed infertili
The ethics of euthanasia and
Documentary: How to Die in Oregon
Vice News: Right to Die (season 4,
1. Self-administered euthanasia
Active and voluntary
b. Passive and voluntary
The principal difference between line and staff is:
a. Employees in staff activities do the actual work of the
b. A line activity supports all other activities in getting the
actual work done.
c. There is essentially no differenc
Quantity demanded of Real GDP at various price levels
o Y- price level
o X- real GDP
Shifts in Aggregate Demand
Remember, changes in price level are moves up and down the curve
Four components of GDP: consumption,