intro u.s. healthcare syst

definition of health by WHO

a state of complete physical, mental, and social well-being and not merely the absence of disease or infirmity

health care

specific things that people do that encompass those goods and services whose primary purpose is to improve or prevent deterioration in health

Healthcare

a system or industry by which people get the health care they need

define a good health system

delivers quality services to all people, when and where they need them and requires a robust financing mechanism, well-trained and adequately paid workforce, reliable information on which to base decisions and policies, and well-maintained facilities and logistics to deliver quality medicines and technologies

how is uncertainty in healthcare common in both demand and supply side of the market

demand: People are uncertain about what type of health care is needed and when it is needed

supply: Difficult to predict the outcome of a treatment

Uncertainty in health care markets leads to the presence of what

insurance

describe informational asymmetries between providers (e.g. MD, insurers) and patients

when one party in the transaction has more information than the other party which may allow the better informed party to exploit the less informed party

how can information asymmetry can be exacerbated by

• Limited time to shop/seek information

• Occurs at times when individual is vulnerable or cognitively impaired

• Inability to learn from experience (2nd or 3rd care)

externalities

when someone external to the market transaction, who is neither the buyer nor the seller, is affected by the transaction and not compensated

positive externality

beneficial effect, eg: “herd immunity”

Negative externality

negative/Harmful effect; eg: non-smoking children in a household where parents smoke

Demand for health care is a derived demand for what

good health (overall well-being)

practices in health care markets that effectively restrict competition/entry in the sector

• Patent protection in Pharmaceutical Industry

• Licensure requirements for providers

• Restrictions on product advertising

how can governmnents play a role in the health care sector

either by provision of health care or by providing subsidies for the provision of health care

examples of government Interventions in health care

• Medicare

• Medicaid

• Affordable Care Act