Principles in health economics and policy : distributing health care

Examining the different structures and techniques involved in making decisions about who benefits from those health care resources available in a publicly funded system, this book is a concise and compact introduction to health economics and policy. It introduces the subject of economics, explains the fundamental failures in the market for health care and discusses the concepts of equity and fairness when applied to health and health care. Written for students and health professionals with no background in economics, this new edition has been fully updated and revised. It now provides a more policy-oriented appraoch than before, emphasizing the application of economic analysis to health policy issues. User-friendly and filled with non-specialist language and easily understandable mathematics, this volume addresses a range of universal health policy issues through the application of health economic analyses. Exploring key questions currently facing health policy makers across the globe, it asks: how should society intervene in the determinants that affect health?; how should health care be financed?; how should health care providers be paind?; and how should alternative health care programs be evaluated when setting priorities? With exercises and suggested further reading lists at the end of each chapter, Principles in Health Economics and Policy , 2nd edition, is an ideal resource for students and health professionals. It is the perfect place to find a clear and concise policy relevant introduction to the application of health economics to health care funding from a unique economics perspective that cannot be found anywhere else. Contents 10 Part 1 The context of health and health care 14 1 Health and health care 16 1.1 What is health? 16 1.2 What is health care? 19 1.3 What do health care and health do for people? 21 1.4 Health and health care across the world 24 1.5 Conclusion 27 2 Economics and efficiency 30 2.1 More in means more out—but at a diminishing rate 32 2.2 Substitution: 'more than one way to skin a cat' 37 2.3 Scarcity: a dismal reality for the dismal science 45 2.4 Supply and demand—and the magic equilibrium 51 2.5 Conclusion 57 3 What makes the market for health care different? 60 3.1 The perfect market model and the imperfect market for health care 60 3.2 Asymmetric information and the agency relationship 65 3.3 Externalities: selfishly motivated 68 3.4 Conclusion 72 4 Equality and fairness 74 4.1 Externalities: unselfishly motivated 74 4.2 Transfers in cash or in kind 77 4.3 Three theories of distributive justice 80 4.4 The health frontier and trade-offs 85 4.5 Conclusion and some conceptual clarifications 90 Part 2 Intervening in the determinants of health 96 5 The health environment 98 5.1 The physical environment 98 5.2 The social environment 102 5.3 Conclusion 105 6 Health-related lifestyle 108 6.1 Diet 109 6.2 Exercise 111 6.3 Substance use 111 6.4 Conclusion 114 Part 3 Financing health care 116 7 Uncertainty and health insurance 120 7.1 The welfare gain from insurance 121 7.2 Moral hazard 125 7.3 Risks differ: actuarially fair insurance 126 7.4 Adverse selection 127 7.5 Conclusion 129 8 Compulsory insurance 132 8.1 Social health insurance 133 8.2 Tax-financed health care 134 8.3 Comparing three insurance systems 136 8.4 Conclusion 136 9 Patient payment 140 9.1 The third party or the patient pays 141 9.2 Co-payment, co-insurance, co-funding, cost sharing 141 9.3 Deductibles 142 9.4 Distributive implications 144 9.5 Negative patient payments 145 9.6 Autonomous consumer or compliant patient 146 9.7 Conclusion 147 Part 4 Paying health care providers 150 10 Primary care 152 10.1 Fee for service 153 10.2 Capitation 156 10.3 Salary 158 10.4 Comparing three payment systems 161 10.5 Conclusion 164 11 Secondary care: reimbursing hospitals 166 11.1 Retrospective variable: cost reimbursement 167 11.2 Prospective fixed (global) budgets 168 11.3 Prospective variable 168 11.4 Macro vs micro level 170 11.5 Conclusion 170 12 Integrating the health care provider system 174 12.1 Combinations of payment systems in primary and secondary care 174 12.2 The 'body' of the health care provider system 176 12.3 Interventions: integration and incentives 178 12.4 Conclusion 180 Part 5 Economic evaluation and priority setting 182 13 Non-monetary effects and monetary benefits 188 13.1 Incommensurable outcome measures 189 13.2 Commensurable measures of health effects 191 13.3 Production gains resulting from improved health 198 13.4 The monetary value of improved health 202 13.5 Threshold values and net monetary benefits 205 13.6 Conclusion 206 14 Costs and discounting 208 14.1 Average vs marginal costs 208 14.2 Identifying cost items: analysis viewpoint 212 14.3 Health service costs 213 14.4 Non-health service costs 213 14.5 The discount rate 214 14.6 Conclusion 218 15 Equity issues: going beyond CBA and ICER 220 15.1 Productivity changes and willingness to pay vary with income 220 15.2 Health gains: size and distribution matter 222 15.3 Severity: equality in prospective health 223 15.4 Age: equality in total health 223 15.5 Causes of ill health 226 15.6 Consequences beyond patients' health gains 227 15.7 Conclusion 228 References 232 Index 236 A 236 B 236 C 236 D 236 E 236 F 236 G 236 H 236 I 236 J 236 L 236 M 236 N 237 O 237 P 237 Q 237 R 237 S 237 T 237 U 237 V 237 W 237 Principles In Health Economics And Policy Is A Clear And Concise Introduction To Health Economics And Its Application To Health Policy. It Introduces The Subject Of Economics, Explains The Fundamental Failures In The Market For Health Care, And Discusses The Concepts Of Equity And Fairness When Applied To Health And Health Care. Written For Students And Health Professionals With No Background In Economics, The Book Takes A Policy-oriented Approach, Emphasizing The Application Of Economic Analysis To Universal Health Policy Issues. It Explores The Key Questions Facing Health Policy-makers Across The Globe Right Now. With Relevant Exercises And Suggested Further Reading Lists At The End Of Each Chapter, Principles In Health Economics And Policy Is The Ideal Resource For Both Students And Health Professionals.--jacket. Health And Health Care -- Economics And Efficiency -- What Makes The Market For Health Care Different? -- Equality And Fairness -- The Health Environment -- Health-related Lifestyle -- Uncertainty And Health Insurance -- Compulsory Insurance -- Patient Payment -- Primary Care -- Secondary Care : Reimbursing Hospitals -- Integrating The Health Care Provider System -- Non-monetary Effects And Monetary Benefits -- Costs And Discounting -- Equity Issues : Going Beyond Cba And Icer. Jan Abel Olsen. Includes Bibliographical References And Index. Principles in Health Economics and Policy is a clear and concise introduction to health economics and its application to health policy. It introduces the subject of economics, explains the fundamental failures in the market for health care, and discusses the concepts of equity and fairness when applied to health and health care. Written for students and health professionals with no background in economics, the book takes a policy-oriented approach, emphasising the application of economic analysis to universal health policy issues. It explores the key questions facing health policy-makers across the globe right now, such as: How should society intervene in the determinants that affect health? How should health care be financed? How should health care providers be paid? How should alternative health care programmes be evaluated when setting priorities? With relevant exercises and suggested further reading lists at the end of each chapter, Principles in Health Economics and Policy is the ideal resource for both students and health professionals. ## Abstract Principles in Health Economics and Policy is a concise introduction to health economics and its application to health policy. It introduces the subject of economics, explains the fundamental failures in the market for health care, and discusses the concepts of equity and fairness when applied to health and health care. The book takes a policy-oriented approach, emphasizing the application of economic analysis to universal health policy issues. It explores the key questions facing health policy-makers across the globe right now, such as: how should society intervene in the determinants that affect health? How should health care be financed? How should health care providers be paid? And, how should alternative health care programmes be evaluated when setting priorities? Exercises and suggested readings are included after each chapter.