Chap. 7 Microeconomics: Healthcare

Healthcare

goods and services intended to maintain or improve a person’s health

how much of use economy is healthcare

6 percent

ACA

Affordable Care Act

Health insurance

a contract under which a buyer pays premiums in exchange for provider’s paying partial or total medical bills

fee for service

providers receive payment for each service they provide

health maintenance organizations (HMO)

insurance plans reimbursing doctors by paying a fee per patient instead of a fee for individual encounters

group plans

private health insurance coverage for entire group of employees

fringe benefit (like health insurance)

non monetary compensations firms offer

out of pocket

payment by individual with saved money instead of insurance

OECD

organization for Economic Cooperation and development

asymmetric information

one party involved has less information that the other

adverse selection

a situation where one party takes advantage of knowing more than another party in the transaction

risk pooling

selling policies to many individuals with probability of not many payoutsa

moral hazard

actions people take after they enter into a transaction which makes the other person worse off

traditional health insurance is sometimes called

3rd party payer system

principle agent problem

doctor and hospitals doing extra unneccesary services

deductible

the part of the bill that you must pay for before insurance kicks in

malpractice lawsuit (also why they have principle agent problems)

doctors being sued for misdiagnosis

coinsurance

percentage of remainder of bill you must pay for insurance to cover the rest

preexisting conditions are not

usually covered by insurance

factors that do not explain sustained increase in healthcare spending

administrative costs, prescription drug costs, lawsuits, uninsured patients

market based reforms

restructuring the healthcare so that it becomes more like markets

A single payer plan (MFA - medicare for all) (hypothetical)

people not being charged a premium, deductible, or coinsurance

public option

coexisting government run healthcare along with private healthcare companies