Health Services Vocabulary

What are choices in health care?

In healthcare you choose the best of bad options, based on what’s available to YOU.

What is cost in health care?

What you give up when making a CHOICE.

What is a tradeoff in health care?

The give and the take of a scenario.

What is the Opportunity cost?

the NEXT BEST CHOICE after your BEST CHOICE from the options provided to you.

What are tangible costs?

things that cost money

what are intangible costs?

things that don’t cost money but in the end effect your decision making.

what are direct tangible costs when related to health care?

medical expenses and non medical expenses.

What are indirect tangible costs when related to health care?

opportunity costs, and costs that affect your life indirectly when facing a medical decision.

What is a decision in health care?

Something made over a minimum of 2 choices.

What are domains?

aspects of a DECISION

what are components?

These are associated with choices.

What is a consumption bundle?

Something that includes all of the COMPONENTS for a CHOICE.

What is Utility?

A satisfaction construct associated with a CONSUMPTION BUNDLE. The whole CHOICE.

What is the Optimal Choice? (In regards to utility)

A choice that has the highest UTILITY.

What does it mean when a person is rational?

The individual has the ability to choose the highest UTILITY choice.

What are factor loadings?

these represent the realative importance of components in your choices. NEGATIVE values are COSTS.

What is utility function?

It means individuals value health and COMMODITIES.

Define Commodities.

Everything else you want in life besides health.

What is the concept of Health Production Function?

we produce health

what are inputs of the health production function?

Things that we do to help sustain and improve our health.

Ex. water, medications, exercise, sleep, immunizations, food

What are outputs of the health production function?

What we gain from improved health,

Ex. health, years of life, # of healthy days

Define Endowments

things we can’t change in a short amount of time that still effects our production of health.

What is Marginal Product of Health Care?

change in number of health days caused by change in amount of health care used.

What is a marginal product?

Diminishes in size as you move further along x axis.

What is the law of diminishing marginal returns?

If you put in more and more you get less and less back.

What is a budget constraint?

total money = amount spent on health care and other goods

What is time constraint?

total time = time spent at work, producing health, producing commodities, and in leisure.

According to Economic Theory, which of the following statements is false?

1. the cost of a choice is always less than the benefits of a choice

2. there are tradeoffs to every choice

3. The opportunity cost is always the second best (or next best) choice.

4. Economics is the study of how and why people make choices

1. the cost of a choice is always less than the benefits of a choice

According to the definitions presented in class, a treatment choice is the same as the treatment chose. T/F

False

Which of the following is true (according to Economic Theory and the Taxonomy of Healthcare Costs?

1. Cost is the amount of money needed to buy something

2. it is possible for something to have no cost

3. tangible costs are not measured in terms of money

4. a negative outcome of a choice is considered a cost of that choice

4. a negative outcome of a choice is considered a cost of that choice

According to Economic Theory and the Taxonomy of Healthcare Costs, which of the following is false?

1. Humans have unlimited wants

2. Resources don’t have to be scarce

3. indirect costs are opportunity costs

4. Sometimes humans make choices because they can and sometimes humans make choices because they must

2. Resources don’t have to be scarce

According to Economic Theory, which of the following is true?

1. the opportunity cost is an example of a tradeoff

2. all choices have exactly one tradeoff

3. tradeoffs are the costs associated with a choice

4. Only bad choices have tradeoffs

1. The opportunity cost is an example of tradeoff

1, 2, 3, 4, or 5

5

1, 2, 3, 4, or 5

2

Choice A, Choice B, Neither of them, Either of them

Choice B

Long drive, short drive, high salary, low salary, mostly dispensing, part time, potential for promotion

Low Salary

1. Jonathan views dispensing as a benefit of Choice A (ie something he values/likes)

2. jonathan views a low salary as a cost of the job in Choice A

3. Jonathan would prefer the job in Choice A to include patient care

4. The job in Choice B is part time. This component most impacts the utility of that choice.

1. Jonathan views dispensing as a benefit of Choice A (ie. something he values/likes)

Which of the following statements is true, according to the Grossman Model?

1. Health only depreciates (i.e. decreases) over time if you continue to invest in your health

2. individuals actively choose how much health to buy in the next time period

3. money and time are both scarce resources (i.e. they are finite)

4. endowments are modifiable (i.e. can be changed)

3. money and time are both scarce resources (i.e. they are finite)

According to the Grossman Model, ____________________________________________. Select a phrase that is ALWAYS true.

1. people value their health as well as other commodities

2. people value their health over other commodities

3. people value their health less than other commodities

4. people value their health equally with other commodities

1. people value their health as well as other commodities

In the Grossman’s model, a person’s health can increase or decrease in the next time period (i.e. the future). T/F

True

Which of the following statements about the Marginal Product of Health (MPH) is true?

1. A person with a lower MPH (i.e. smaller number) requires more inputs to produce the same amount of health as a person with a higher MPH

2. MPH is a way to measure how healthy a person is today

3. A person’s MPH remains constant throughout their life

4. MPH is an example of an unlimited want

1. A person with a lower MPH (i.e. smaller number) requires more inputs to produce the same amount of health as a person with a higher MPH

Which of the following is true, according to the Grossman Model?

1. individuals choose the price of goods (e.g. how much a surgery would cost).

2. People never make rational choices when it comes to health

3. there are tradeoffs to every choice: investing in more M (healthcare) means giving up some X (all other goods)

4. Choices are only constrained by time, not money

3. there are tradeoffs to every choice: investing in more M (healthcare) means giving up some X (all other goods)

1. utility in the next period Ut+1 with investment in health (the green circle) is always greater than utility in the next period Ut+1 without investment (the pink circle)

2. Ut can never be equal to Ut+1

3. Producing utility today will result in greater utility tomorrow

4. It is always larger then sHt

1. utility in the next period Ut+1 with investment in health (the green circle) is always greater than utility in the next period Ut+1 without investment (the pink circle)

According to the Grossman model, which of the following do individuals actively choose (or have direct influence over)?

1. How much money to spend on goods

2. How much health they have tomorrow

3. How good they are at making health (the magnitude of their marginal product of health, MPH)

4. How long they live

1. how much money they spend on goods

The grossman model would predict that a person with a lower marginal product of health (MPH) would be __________ to invest in their health, compared to a person with a higher MPH (all else equal).

1. less likely

2. more likely

3. equally likely

Less likely

According to the Grossman model, all else equal, if the cost of goods used to produce health (i.e. Pm) were to increase, then people would become more likely to invest in their health. (T/F)

False

According to the Grossman model, for which of the following cases/scenarios would it be optimal to stop investing in health?

1. when the depreciation in health is very small compared to the potential investment

2. when the marginal product of healthcare is very small

3. when the cost of all goods is low

4. when the person values their health more than other commodities

2. when the marginal product of healthcare is very small

1. U2 > U1 and U2 > U3

2. U2 > 0

3. U3 > U2 and U1>U2

4. U1>U2>U3

5. U3>U2>U1

6. Shannon would never select this treatment

1. U2>U1 and U2>U3

1. U(B)<0

2. Sam likes y2

3. Sam is irrational

4. The costs of Choice A outweigh the benefits of Choice A

5. None of the above

4. The costs of Choice A outweigh the benefits of Choice A

Which component has the greatest value (ie is the most imporant) to the individual"?

1. z1

2. z3

3. z5

4. z8

3. z5

The treatment chosen is the one that is assigned the highest utility value

1. always true

2. could be true

3. never true

1. always true

The treatment chosen is associated with positive utility (ie is a number greater than zero)

1. always true

2. could be true

3. never true

2. could be true

According to the Grossman Model, if the cost of all goods is constant (ie Pm=Px) everyone will choose to buy the same amount of M and X. T/F

False

1. the utility of Choice A must be positive

2. The utility of Choice A must be negative

3. Choice A is the optimal choice of this decision if no other options are available

4. choice A is not optimal

5. None of the other statements are true

5. none of the other statements are true

3. is not the correct choice because if there were no other options available it is NOT considered a CHOICE.

What are the 3 P’s of public health?

Preventing disease, prolonging life, and promoting physical health

What are the 3 levels of prevention in public health?

Primary - Prevent the disease from happening, identifying Risk Factors

Secondary - disease has started but there are no symptoms = no medication or treatment

Tertiary - stop complications of the disease through medical intervention once it has taken root

Classify the following as one of the three prevention types:

1. A policy that increases tax on sweetened beverages

2. Aspirin use for patients who have coronary artery disease

1. primary

2. tertiary

What is public health’s approach to a community’s health problem?

Assessment

• assess the problem

Policy Development

• design an intervention

Assurance

• does it work? monitor the changes in the intervention and make changes as needed.

What is System level intervention in public health?

HIGH level, government run

• entire population affected

• policies and laws are made

What is Community level intervention in public health?

Middle level

• group of people affected

• local community groups involved

• change community norms, attitudes and awareness

• social marketing

What is individual level intervention in public health?

Low level

• the individual members at risk

• change individual behaviors, knowledge, and skills

What was the healthcare like Pre-1875? (system, hospitals, health outcomes, providers)

Pure market system - paid for with cash, money = care and quality = $$$

Some options for the destitute - Charity hospitals

Poor health outcomes

SO many different types of doctors, no licensures b/c doctors aren’t better than us

Medical school was so easy, pumping out doctors

What was healthcare like post civil war? (system, hospitals, health outcomes, providers)

Better system improvements

licensing for providers - required education

Better quality medical schools - increased students

what happened in healthcare between 1900-1915?

Minimum standards for med schools

Access to medical care falls due to lack of doctors

Raised prices for medical care

What happened to the healthcare system because of WWII?

INSURANCE YAY, employer-sponsored health care.

What are the positives and negatives of Britian’s Healthcare?

Positive

• lower costs for patietns

• everyone is covered

• low overall spending

• good outcomes (health wise)

• good preventative care

Negative

• NO choices

• gatekeepers

• government control

• higher taxes

• moral hazard - no cost → more appointments scheduled

What is Britain’s healthcare system (basic)?

No average family premiums - Except for dental, drugs, and glasses

government pays for hospitals, doctors, etc.

What is Germany’s Healthcare? (basic)

Everyone has insurance, Rich pay for the poor.

Rich can opt out for private

They bargain with doctors - set prices based on the state

What are the positives and negatives of German healthcare?

Positive

• no copays for pregancy

• school is free for healthcare providers

• short wait times

• copays are small + known in advance

• keep insurance if lost job

• OPTIONS

Negative

• Poor provider compensation

  • let rich opt out - costs will overall increase for poor

What is Tiawan’s healthcare system? (Basic)

one government run insurance company

copays for drugs

What are the positives and negatives of Taiwan’s healthcare?

Positives

• smartcards - keeps track of medical history

• NO opting out

• NO wait times

• choices

Negatives

• government is borrowing from banks to fund healthcare

• usage is monitored

  • Moral hazard

What is japan’s healthcare system? (basic)

Insurance provided by employers OR community based insurance companies

government negotiates prices with providers

What are the positives and negatives of Japan’s healthcare?

Positive

• No appointments

• Transparency

• CHOICES

• good outcomes

• low costs

• lose job → community insurance

• low prices → innovation

Negative

• low pay for providers

• hospitals are in debt

• government sets all the prices (1 price for whole country)

Compare a Pure market system vs a pure government system.

Pure-Market

• No government intervention

• no waiting

• no moral hazard

• choices

• POOR have less choices

• Skimp preventative care

Pure - Government

• Government intervention

• think like Britain