Health Economics and Financing

Transcription

1 Health Economics and Financing Getzen, T ISBN-13: Table of Contents Preface Acknowledgments About the Author Foreword CHAPTER 1 CHOICES: MONEY, MEDICINE AND HEALTH 1.1 What Is Economics? Terms of Trade Value Can We Pay Somebody to Care? Financing Health Care Full Cost: Paying For Medical Care 1.2 The Flow of Funds Health Care Spending in the United States Sources of Financing Health Care Providers: The Uses of Funds 1.3 Economic Principles As Conceptual Tools Scarcity (Budget Constraints) Opportunity Cost Willingness to Pay Trade Money Flows in a Circle The Margin: What Matters? Maximization: Marginal Costs and Marginal Benefits Choice: Are Benefits Greater Than Costs? Investment Contracts: Complex Exchanges to Deal with Timing and Risk Organizations Adapt and Evolve Distribution: Who Gets What 1.4 Health Disparities 1.5 Whose Choices: Personal, Group or Public? 1.6 Social Science and Rational Choice Theory

2 CHAPTER 2 DEMAND AND SUPPLY 2.1 The Demand Curve The Diamonds?Water Paradox: An Example of Marginal Analysis Consumer Surplus: Marginal versus Average Value of Medicine Ceteris Paribus Individual, Firm, and Market Demand Curves 2.2 The Supply Curve Marginal Revenue 2.3 Price Sensitivity Price Elasticity and Marginal Revenue Price Discrimination 2.4 Is Money the Only Price? 2.5 Inputs and Production Functions Production Functions Marginal Productivity 2.6 Markets: The Intersection of Demand and Supply 2.7 Need versus Demand How Much is a Doctor Visit Worth? The Demand for Medical Care is Derived Demand The Demand for Health: What Makes Medical Care Different 2.8 The Determinants of Health 2.9 Efficiency CHAPTER 3 COST?BENEFIT AND COST-EFFECTIVENESS ANALYSIS 3.1 Cost?Benefit Analysis is About Making Choices An Everyday Example: Knee Injury Stepwise Choices: Yes or No? How Much? Calculating Marginal and Average Costs Defining Marginal: What is the Decision? 3.2 Maximization: Finding the Optimum

3 Declining Marginal Benefits Optimization: Maximum Net Benefits Expected Value 3.3 The Value of Life 3.4 Quality-Adjusted Life Years Discounting Over Time QALY League Tables 3.5 Perspectives: Patient, Payer, Government, Provider, Society Distribution: Whose Costs and Whose Benefits? CBA Is a Limited Perspective CBA and Public Policy Decision Making CBA Is a Limited Perspective/ CHAPTER 4 HEALTH INSURANCE: FINANCING MEDICAL CARE 4.1 Methods for Covering Risks Savings Family and Friends Charity Private Market Insurance Contracts Social Insurance Strengths and Weaknesses of Different Forms of Risk Spreading 4.2 Insurance: Third-Party Payment Why Third-Party Payment? Variability Third-Party Transactions Who Pays? How Much? How Are Benefits Determined? 4.3 Risk Aversion 4.4 Adverse Selection 4.5 Moral Hazard Welfare Losses Due to Moral Hazard Ex Ante Moral Hazard 4.6 Tax Benefits 4.7 Effects of Health Insurance on Labor Markets 4.8 History of Health Insurance

4 CHAPTER 5 INSURANCE CONTRACTS AND MANAGED CARE 5.1 Sources of Insurance Employer-Based Group Health Insurance Medicare Medicaid State Children?s Health Insurance Program Other Government Programs and Charity The Uninsured 5.2 Contracting and Payments Risk Bearing: From Fixed Premiums to Self-Insurance Purchasing Medical Care for Groups Medical Loss Ratios Claim Processing The Underwriting Cycle ERISA, Taxes, and Mandated Benefits Other People?s Money: Rising Costs and Mediocre Benefits 5.3 Consumer-Driven Health Plans: High Deductibles and Health Savings Accounts Defined Contribution Health Plans 5.4 Managed Care Closed-Panel Group Practice HMOs IPA-HMOs and Open Contracts Managed Care Contract Provisions The Range of Managed Care Contracts: POS, PPO, HMO Provider Networks and Legal Structure Management: The Distinctive Feature of Managed Care Contractual Reforms to Control Costs 5.5Unresolved Issues: Split Incentives, Divided Loyalties CHAPTER 6 PHYSICIANS 6.1 Financing Physician Services: Revenues Copayments, Assignment, and Balance Billing

5 Physician Payment in Managed Care Plans Incentives: Why Differences in the Type of Payment Matter A Progression: From Prices to Reimbursement Mechanisms 6.2 Physician Incomes 6.3 Physician Financing: Expenses Physician Practice Expenses The Labor versus Leisure Choice The Doctor's Workshop and Unpaid Hospital Inputs Malpractice 6.4 The Medical Transaction Asymmetric Information Agency: Whose Choices? 6.5 Uncertainty 6.6 Licensure: Quality or Profits? How Does Licensure Increase Physician Profits? Supply and Demand Response in Licensed versus Unlicensed Professions How Does Licensure Improve Quality? A Test of the Quality Hypothesis: Strong Versus Weak Licensure CHAPTER 7 MEDICAL EDUCATION, ORGANIZATION, AND BUSINESS PRACTICES 7.1 Medical Education 7.2 The Origins of Licensure and Linkage to Medical Education AMA Controls Over Physician Supply, 1930?1965 Breaking the Contract: The Great Medical Student Expansion of 1970 to 1980 Building Pressure: Fixed Domestic Graduation Rates 1980 to Adjusting Physician Supply The Flow of New Entrants and the Stock of Physicians Immigration of International Medical Graduates Growth in Non-MD Physicians Balancing Supply and Incomes: Tracing the Past and Projecting the Future 7.4 Group Practice: How Organization and Technology Affect Transactions 7.5 Kickbacks, Self-Dealing, and Side Payments 7.6 Price Discrimination 7.7 Practice Variations 7.8 Insurance, Price Competition, and the Structure of Medical Markets

6 7.9 Choices by and for Physicians CHAPTER 8 HOSPITALS 8.1 From Charitable Institutions to Corporate Chains: Development of the Modern Hospital 8.2 Hospital Financing: Revenues Sources of Revenues 8.3 Hospital Financing: Expenses 8.4 Financial Management and Cost Shifting 8.5 How Do Hospitals Compete? Competing for Patients Competing for Physicians Competing for Contracts Measuring Competitive Success Measuring the Competitiveness of Markets 8.6 Organization: Who Controls the Hospital and for What Ends? CHAPTER 9 MANAGEMENT AND REGULATION OF HOSPITAL COSTS 9.1 Why Do Some Hospitals Cost More than Others? 9.2 How Management Controls Costs Short-Run versus Long-Run Cost Functions Uncertainty and Budgeting 9.3 Conflict Between Economic Theory and Accounting Measures of Per Unit Cost Timing Whose Costs? 9.4 Economies of Scale The Hospital is a Multiproduct Firm Contracting Out 9.5 Quality and Cost Technology: Cutting Costs or Enhancing Quality? Improved Efficiency Can Raise Total Spending 9.6 Hospital Charges, Costs, and Prices: Confusion and Chaos

7 Chargemaster and Negotiated Fees Cost Finding: Gross Revenues and the RCCAC Medicare as a Standard for Pricing 9.7 Controlling Hospital Costs through Regulation CHAPTER 10 LONG-TERM CARE 10.1 Development of the Long-Term Care Market 10.2 Age and Health Care Spending 10.3 Defining LTC: Types of Care 10.4 Medicaid: Nursing Homes as a Two-Part Market 10.5 Certificate of Need: Whose Needs? Money and Quality Competing for Certificates of Need, Not for Patients Evidence on the Effects of Certificates of Need 10.6 Cost Control by Substitution 10.7 Case-Mix Reimbursement 10.8 Long-term Care Insurance Is Long-Term Care?Medical?? 10.9 Retirement, Assisted Living, and the Wealthy Elderly Financial Reimbursement Cycles CHAPTER 11 PHARMACEUTICALS 11.1Pharmaceutical Revenues: Sources of Financing Inpatient Pharmaceuticals 11.2 Uses of Funds Retail Pharmacies Wholesalers Insurance Companies and PBMs Pharmaceutical Firms Cost Structure

8 11.3 History and Regulation of Pharmaceuticals 11.4 Research and Development 11.5 Pharmacoeconomics and Technology Assessment 11.6 Industry Structure and Competition Value, Cost, and Marketing The Role of Middlemen: Distribution Versus Marketing Research Productivity CHAPTER 12 FINANCING AND OWNERSHIP OF HEALTH CARE PROVIDERS 12.1 What is Financing? 12.2 Value and Rate of Return The Time Value of Money. Interest Rates and Present Value The Internal Rate of Return Human Capital: Medical Education as an Investment Risk Valuing Assets 12.3 Uncorrelated (Independent) and Correlated (System) Risks Which is Riskier: Nursing Homes or Drug Companies? Assessing Business Risk 12.4 Ownership and Agency Equity and Debt Who Owns the Business? Who Owns the Patient? Agency Issues The Role of Financial Intermediaries Health Insurers as Financial Intermediaries 12.5 Capital Financing: Hospitals 12.6 HMO Ownership and Capital Markets: Success and Failure Business Risks for an HMO Kaiser Health Plan: The Evolution of an HMO Group Health Association: A Consumer Co-op Gets Bought Out by a Franchise Chain 12.7 Entrepreneurship and Profits U.S. Healthcare: A Profitable Growth Company 12.8 Health Care for Profit, or Not Differences between For-Profit and Nonprofit Behavior Charity Care: For Real or for Show?

9 For-Profit or Not-for-Profit: Which Is Better? Medical Care is Difficult: Risk, Information Asymmetry, Social Justice CHAPTER 13 MACROECONOMICS OF MEDICAL CARE 13.1 What is Macro? Micro and Macro Perspectives on Spending 13.2 The Consumption Function The Permanent Income Hypothesis Shared Income Public and Private Decisions Budget Constraints: Borders that Matter 13.3 Adjusting to Change: Dynamics Permanent Income and Adjustment of Health Spending to GDP Adjustment to Inflation Adjustment to GDP: Rates of Change and Time Series Analysis 13.4 Forecasting Future Health Expenditures 13.5 Cost Controls: Spending Gaps and the Push to Regulate Capacity Constraints and Budget Constraints 13.6 Workforce Dynamics: "Spending" is Mostly Labor Employment Wages CHAPTER 14 THE ROLE OF GOVERNMENT AND PUBLIC GOODS 14.1 The Roles of Government Markets Are Perfectly Efficient, but Only with Perfect Competition Government in a Mixed Economy How Government Works The Voluntary Sector Government is Necessary, and Costly Markets are Costly, Limited, and Always Regulated 14.2 Government Health Financing

10 14.3 Law and Order 14.4 Public Goods and Externalities Privatizing Public Goods Insurance Makes Any Good More Public Externalities The Coase Theorem: Transaction Costs and Property Rights 14.5 Monopoly and Market Failure 14.6 Information Rational Consumer Ignorance Social Costs Depend on the Number of People Milk or Bread: Which is More Public? Infectious Disease Externalities Epidemics The Sanitary Revolution: A Moral Campaign for Public Health Formation of the U.S. Public Health Service 14.7Drugs, Sex, and War: Public Health in Action Addiction Sexual Behavior Who Counts as a Citizen? Abortion and Other Dilemmas War and Public Health 14.8 Politics, Regulation, and Competition Politicians: Entrepreneurs Who Try to Get Votes Government as the Citizen?s Agent Public Goods Make almost Everybody Better Off but Nobody Happy Winners and Losers 14.9 Trust, Care, and Distribution CHAPTER 15 HISTORY, DEMOGRAPHY, AND THE GROWTH OF MODERN MEDICINE 15.1 Economic Growth has Determined the Shape of Health Care 15.2 Birth Rates, Death Rates, and Population Growth 15.3 The Stone Age 15.4 The Agricultural Age Investment and Trade Civilization, War, and Government The Decline of Civilizations Leads to Population Declines

11 The Plague Food Supply Determines Population The Rise of Economics The Malthusian Hypothesis 15.5 The Industrial Age Why Malthus Was Wrong Demographic Transition Demographic Change, Income Distribution, and the Rise of the Middle Classes 15.6 The Information Age 15.7 Income and Health 15.8 Reducing Uncertainty: The Value of Life and Economic Security The Value of Risk Reduction Social Security and Health Insurance 15.9The Rise of Modern Medicine Preconditions for Change The Growth of Medical Science and Technology Did Better Medical Care Increase Life Expectancy? CHAPTER 16 INTERNATIONAL COMPARISONS OF HEALTH AND HEALTH EXPENDITURES 16.1 Wide Differences Among Nations Size of the Market 16.2 Micro Versus Macro Allocation: Health as a National Luxury Good 16.3 Causality: Does More Spending Improve Health? 16.4 Low-Income Countries Health Care in Ghana Sudan 16.5 Middle-Income Countries China The Health Care System of Mexico Poland 16.6 High-Income Countries Health Care in Japan The Health System in Germany The Expensive Exception: The United States 16.7 International Trade in Health Care

12 People and Ideas Services Equipment Pharmaceuticals CHAPTER 17 ECONOMIC EVALUATION OF HEALTH POLICY: THE PATIENT PROTECTION AND AFFORDABLE CARE ACT OF ACA 2010: Description of Main Elements Coverage Rules State Health Insurance Exchanges Individuals Employers: Positive and Negative Incentives to Provide Benefits Medicare: ACOs, IPAB, Bundled Payments, and the Donut Hole Medicaid: Major Expansions with Federal Funding Prevention and Other Provisions of PPACA Still Uninsured: The Undocumented and Some Other Outsiders 17.2 Statement of the Problem: Affordability Rising Costs Slowly Create a Crisis The Middle Class Gets Stretched: A Leveraged Gap in Coverage Macro Affordability: The Growth Gap 17.3 Using Existing Plans as Models States The Federal Employees Health Benefits Plan 17.4 Unresolved Issues Equity Defining Essential Benefits The OPM Legacy: Third-Party Payment and Cost Shifting Price Transparency: A Conspiracy of Silence The Uninsured: Still There, Still Have to be Paid For Unfunded Health and Retirement Benefits Defined Benefits, Defined Services, or Defined Contribution Who Bears the Risk?

13 CHAPTER 18 VALUE FOR MONEY IN THE FUTURE OF HEALTH CARE 18.1 Forcing the Question: Who Gets Healthy and Who Gets Paid? 18.2 Spending Money or Producing Health? 18.3 Dynamic Efficiency 18.4 Distribution, Distribution, Distribution 18.5 Path-Dependence and the Possibilities for Reform How Did We Get Here? What Did Medicine Miss? What Went Wrong? Notable Failures and Unresolved Dilemmas 18.6 The Path Forward: Step by Step 18.7 The Shape of Health Care Spending to Come 18.8 The Long Run: 2050 and Beyond Glossary Index