UCSD_USP 143_Winter 2025_Lecture #3_1-14-2025

Page 1: Course Introduction

• Lecture Information: USP 143: THE US HEALTH CARE SYSTEM, Lecture #3 on Tuesday January 14th, 2025.

Page 2: Housekeeping Information

• Canvas Quizzes: Earlier opening time at high noon on Wednesdays; due by Thursdays at 8 AM.

• Upcoming Quiz: Opens on January 22nd at noon, covering Chapters 1-4 and KFF on Health Care Costs & Affordability.

• Office Hours: More information available in the Google sheet.

• Book Selection: All students must choose a book and document their selections in the Google sheet.

Page 3: Learning Checks Review

• Key Questions:

  • National Health Expenditures (NHEs) per year in the US

  • NHEs per capita in the US

  • NHEs as a percentage of US GDP (estimate)

  • Comparison of US spending per capita with peer nations

  • Definitions of government, police power, and public good.

  • Understanding rivalrous vs. non-rivalrous goods and curative medicine (definition, history, changes in payment, professionalization).

Page 4: Recap of Previous Topics

• Main Topics:

  • Government roles in health care

  • Distinction between public and private goods

  • Development of curative medicine.

Page 5: Understanding Government

• Definition of Government:

  • Entity with power to manage political units; derived from Latin "gubernare" (to steer).

  • Composed of officials and ministers responsible for public affairs.

• Police Power:

  • Inherent power of government to control individuals and property for communal security, health, morals, and welfare.

  • Application in healthcare: insurance structure, entitlements, standards of care, etc.

Page 6: Health Care as a Mixed Good

• Public Goods:

  • Vaccines: Prevent communicable diseases.

  • Preventive care: Reduces complications, maintains workforce.

• Consumer Goods:

  • Cosmetic surgery and elective surgeries: Rivalrous nature (availability decreases with usage).

  • Both types serve a function but differ in societal impact.

Page 7: Public vs. Consumer Goods Continued

• Differentiation:

  • Public Goods: Collective benefit, essential for population health.

  • Consumer Goods: Individual benefit, often luxury items.

Page 8: Chapter 2 Overview - Paying for Health Care

• Curative Medicine:

  • Definition: Health care aimed at recovery, not just comfort.

  • Historical development from late 1700s to early 1900s; hospitals become central.

  • Public hospitals emerge post-1880, supported by taxation.

Page 9: Evolution of Health Care Systems

• Timeline:

  • 1880s-1920s: Emergence of curative medicine.

  • Shift towards cash and barter systems and the role of hospitals.

• Intermediaries: Introducing payers (insurers) connecting patients and providers.

Page 10: Role of Payers

• Structure: Payers mix of private insurers, government programs (e.g., Kaiser Permanente) bridging patients and providers.

  • Historical reference from 1880s to present.

Page 11: Necessity of Payers

• Importance of Payers: Addressing healthcare access and quality in a structured way.

Page 12: Key Terms in Health Insurance

• Key Concepts:

  • Health care as a human right

  • Direct vs. indirect purchasing (insurance)

  • Asymmetry of information in healthcare needs and choices.

Page 13: Pre-1920s Payment Methods

• Payment Evolution: Out-of-pocket spending leading up to the Great Depression.

• Blue Cross: Early example of group health insurance; addressed accessibility in case of hospital needs.

Page 14: Formation of Modern Health Insurance

• 1920s Development:

  • Shift towards employer-sponsored plans; community pooling.

  • Blue Shield formed for outpatient services.

Page 15: Medicare and Medicaid Introduction

• Emergence: By 1965, recognition that employer-based insurance neglected vulnerable groups; thus Medicare (for elderly) and Medicaid (for low-income) were established.

Page 16: Functioning of Health Insurance

• Contractual Nature: Health insurance agreements; how premiums translate to provider payments.

• Total Spending Implications: Incentives for consumers and providers, financially incentivizing more healthcare services.

Page 17: Importance of Health Insurance

• Necessity:

  • Addressing human rights, unpredictability, and cost issues.

  • Asymmetry of information creates reliance on providers.

Page 18: Core Idea of Health Insurance

• Core Ideas:

  1. Health care as a fundamental need.

  2. Insurance mitigates catastrophic financial impacts.

  3. Intermediation by insurers compensates for information gaps.

Page 19: Impact of Insurance on Healthcare Costs

• Rising Costs: Coverage increases have led to significant price increases; interplay between consumer and provider incentives.

Page 20: International Healthcare Models

• Comparison: Other countries like Norway and the UK have implemented fully public healthcare systems.

Page 21: Insurance Coverage Types in the US

• Coverage Breakdown:

  • Employment-based: 49%

  • Government financing: 32%

  • Individual private insurance: 10%

  • Uninsured: ~9%

• Enrollment Types: Overview of health insurance enrollment scenarios.

Page 22: Historical Context of Employer-based Insurance

• Economic Factors: Great Depression and WWII led to employer-driven health insurance growth.

• Tax Expenditure: Employer premiums are not taxed, a significant financial aspect of employer-based plans.

Page 23: Challenges of Employer-based Insurance

• Concerns:

  • Experience ratings, job changes, retirement issues impact insurance continuity.

Page 24: Upcoming Focus

• Next Steps: Review Chapter 3, skim KFF PDFs on Medicare, Medicaid, and Affordable Care Act.

• Discussion Topics: Eligibility, patient-payer dynamics, funding sources, government roles in insurance.