[02.09] Healthcare Financing (Health Economics, and Health Technology Assessment) V2.5.pdf

The process by which funds are generated, allocated, and utilized to cover the costs of health services

What is the definition of healthcare financing?

Beveridge Model, Bismarck Model, National Health Insurance Model, and Out-of-Pocket Model

What are the four basic models of healthcare systems?

William Beveridge

Who is the Beveridge Model named after?

Provided and financed by the government through tax payments

How is healthcare provided and financed in the Beveridge Model?

Government

In the Beveridge Model, who typically owns the majority of hospitals and clinics?

Low cost per capita

What is a characteristic of the Beveridge Model regarding cost, due to government control over doctors and charges?

Great Britain, Spain, Italy, most of Scandinavia, New Zealand, Hong Kong, Cuba

List countries that use the Beveridge Model or a variation of it.

Otto von Bismarck

Who is the Bismarck Model named after?

Multi-payer method

Does the Bismarck Model follow a single-payer or multi-payer method?

Insurance system where insurers are called sickness funds

What type of system does the Bismarck Model primarily use for healthcare?

Jointly by employers and employees through payroll deduction

How is the insurance system in the Bismarck Model usually financed?

They plan to cover everyone and not make a profit

What is a key difference between the Bismarck Model's insurance system and that of America, as described?

Private

In the Bismarck Model, are doctors and hospitals typically public or private?

Germany, France, Belgium, Netherlands, Japan, Switzerland, some parts of Latin America

List countries where the Bismarck Model can be seen.

Elements of both Beveridge and Bismarck models

The National Health Insurance Model combines elements from which two other models?

Private-sector providers with payments made through a government-run insurance program that every citizen contributes to

How does the National Health Insurance Model operate regarding providers and payments?

Single-payer method

Does the National Health Insurance Model follow a single-payer or multi-payer method?

Cheaper and simpler administratively

Compared to for-profit insurance systems, what are National Health Insurance programs described as due to lack of marketing, financial motive to deny claims, and profit involvement?

It enables negotiation of lower prices for services and pharmaceuticals

What significant market power does a single-payer system possess?

Canada, Taiwan, South Korea

Which countries are classic examples of the National Health Insurance system?

Private-payer method

Does the Out-of-Pocket Model follow a single-payer or private-payer method?

Too poor or disorganized to provide widespread medical care

Why do most countries, outside of the approximately 40 with established health care systems, rely on the Out-of-Pocket Model?

Africa, India, China, South America, and the Philippines

In which regions or countries is the Out-of-Pocket Model commonly seen, indicating a lack of formal healthcare access for many?

Potatoes, goat's milk, or childcare services

What might patients in poor regions use to pay a doctor's bill in the Out-of-Pocket Model?

Health financing

What is identified as a key function of health systems, crucial for advancing universal health coverage?

Improve service coverage and provide financial protection

What two benefits can effective health financing achieve?

Cost barriers

Why are millions of people unable to access health services?

Complexities of health care delivery

What makes applying economic thinking to resource use in patient care challenging?

The desired outcome of health care cannot be guaranteed and depends on multiple factors

Why is healthcare not considered a simple consumer item?

Social determinants of health (e.g., culture, religion, education, employment)

What are some factors beyond the control of healthcare providers that influence health outcomes?

Containing the cost of health care

What is the main challenge in healthcare financing for developed countries?

Maintaining health spending and achieving health for all initiatives

What is the focus of healthcare financing in developing countries?

Mobilization of funds, allocation of funds, and mechanisms for paying for healthcare services

What are the three main processes involved in healthcare financing?

Revenue raising, pooling of funds, and purchasing of services

What are the three core functions of health financing according to the World Health Organization?

Government budgets, prepaid insurance schemes, direct out-of-pocket payments, and external aids

What are common sources for revenue raising in health financing?

Public expenditure, private expenditure, and external aids

What are the three main sources of health services financing?

Expenditures by central and local governments, state-owned enterprises, and government/social insurance contributions

What does public expenditure in health financing include?

Voluntary payments by individuals or employers

What does private expenditure in health financing include?

Funding from bilateral aid programs or international non-governmental organizations

What are external aids in the context of health financing?

General Revenue or Earmarked Taxes

What is a traditional method of financing healthcare, especially in low-income countries?

Sin Tax Law

What specific law is mentioned as financing the implementation of the Universal Health Care (UHC) Act?

Compulsory

Are social insurance contributions voluntary or compulsory?

Everyone in the eligible group must enroll and pay a specific premium in exchange for a set of benefits

What is a key characteristic of social insurance contributions?

A private contract between an insurer and the insured

What do private insurance premiums involve?

Individual basis and group basis

On what two bases is private insurance available?

Buyer's adverse selection

What is a major concern when private insurance premiums are based on an individual's risk characteristics?

Community cooperation, local self-reliance, and prepayment

What are the three principles governing community-based financing?

Informal sectors

For whom is community-based financing mainly designed?

Payments made by patients to private providers at the time a service is rendered

What are direct out-of-pocket payments?

Fees that the patient must pay to public hospitals, clinics, and health posts, not to private sector providers

What are user fees?

Increase revenue to improve the quality of public health services and expand coverage

What do proponents believe user fees can achieve?

Equity

What is identified as a major objection to user fees?

Resources and opportunities

In the economist's glass analogy, what does the glass represent?

Current allocation of resources

In the economist's glass analogy, what does the water level reflect?

It is not just about what’s in the glass, but how we use what’s inside it

What is the key idea conveyed by the economist's perspective on the glass analogy?

Trade-offs

When pouring water from one side of the glass to benefit a particular group, what does an economist analyze?

Unlimited healthcare “wants” versus insufficient health sector resources

What is the fundamental economic problem faced in healthcare?

Rapid growth in health expenditure

What trend is observed in health expenditures, often outpacing resource growth?

New technologies, treatments, and services

What factors contribute to the significant cost increase in healthcare?

The value of forgone benefit which could be obtained from a resource in its next-best alternative use

What is the definition of opportunity cost?

Prioritize or choose between various healthcare “wants” based on what we can “afford”

What does the concept of opportunity cost require in healthcare decisions?

To ensure that every peso spent yields the greatest benefit to the health of the population

What is the aim when making trade-offs in healthcare budgeting?

Study of how scarce productive resources are allocated among alternative uses for the care of sickness and the promotion, maintenance and improvement of health

What is health economics?

Maximize the health of the population given constrained health producing resources

What is the primary goal of health economics in providing a theoretical framework?

Supply and demand, opportunity cost, and cost effectiveness analysis

What economic principles does health economics apply to guide policy decisions and resource distribution?

Comparative analysis of alternative courses of action in terms of both their costs and consequences

What is economic evaluation?

Inform decision making by identifying which options provide the best outcomes for the resources invested

What is the goal of economic evaluation?

Efficiency and equity

What are the two main criteria that economic evaluation focuses on?

Optimal use of resources to achieve possible maximum health outcomes

What does efficiency in economic evaluation mean?

Cost effectiveness, cost utility, or cost benefit analysis

How is efficiency in economic evaluation assessed?

Fairness and the distribution of health benefits and costs among different population groups

What does equity in economic evaluation address?

Meeting a given objective at least cost

What is technical efficiency?

Producing exactly what the society wants

What is allocative efficiency?

"Equal treatment of equals"

What is horizontal equity?

"Unequal treatment of unequals"

What is vertical equity?

Defining the study question, assessment of costs, assessment of health benefits, adjustment for timing, adjustment for uncertainty, and making a decision

What are the six generic steps in economic evaluation?

Identifying the problem and aims of evaluation

What is the first step in economic evaluation?

Patient, providers, payers, healthcare system, or society

What are the different perspectives that can be defined for an economic evaluation study?

Cost-effectiveness, cost-utility, or cost-benefit analysis

What are the three study formats that can be chosen for an economic evaluation?

Direct vs. indirect vs. intangible, fixed vs. variable, national/regional/district, capital vs. recurrent, intervention activities, time (start-up vs. post-implementation), funding

What are some categories for identifying costs in an economic evaluation?

Medical expenses and treatments

Give an example of direct costs.

Productivity losses

Give an example of indirect costs.

Impact on quality of life

Give an example of intangible costs.

Determine market prices unless they do not reflect opportunity cost

What is involved in the 'valuation' aspect of cost assessment?

Summing adjusted prices, ensuring all cost components are included

What does the 'calculation' aspect of cost assessment involve?

Mortality, Morbidity, Quality of Life

What are some outcome measures that may be employed in the assessment of health benefits?

Effectiveness

When measuring health benefits, should one measure effectiveness or efficacy?

Clinical outcomes, patient surveys, health-related Quality of Life (QoL) instruments

What methods are used to measure health benefits?

Final and not immediate outcomes

Should one measure final or immediate outcomes when assessing health benefits?

Utility (QALY, DALY, HYE) or Money (WTP)

What two terms are used to describe the valuation of health benefits?

Monetary value individuals place on health improvements

What is Willingness to Pay (WTP)?

Quality Adjusted Life Years (QALY)

What is a generic measure of disease burden combining both the quality and quantity of life lived?

One year in perfect health

What does one QALY equate to?

Ranges from 1 (perfect health) to 0 (dead)

What is the range of QALY scores?

Disability Adjusted Life Years (DALY)

What measure combines years lost due to premature death and disability to measure burden of disease?

Applying discounting to future costs and benefits

What is the crucial first step in adjusting for timing in economic evaluation?

That money can help benefit our work more in the present than in the future

What principle does discounting account for?

Prefer to have benefits now and bear costs in the future

What is time preference?

Spread these costs over their useful life span, converting them into annual equivalent costs

What does annuitization of capital costs involve?

Assessing the robustness of an economic evaluation by considering the effects of uncertainty

What is the process of adjusting for uncertainty?