The Economics of Health and Health Care

by Folland, Sherman; Goodman, Allen; Stano, Miron

• ISBN13: 9780132279420
• ISBN10: 0132279428
• Edition: 5th
• Format: Hardcover
• Copyright: 2010-01-01
• Publisher: Prentice Hall

Summary

This clear, step-by-step best-selling introduction to the economics of health and health care thoroughly develops and explains economic ideas and models to reflect the full spectrum of the most current health economics literature.This book uses core economic themes as basic as supply and demand, as venerable as technology or labor issues, and as modern as the economics of information. Chapter topics include health care, health capital, information, health insurance markets, managed care, nonprofit firms, hospitals, physicians and labor, the pharmaceutical industry, government intervention and regulation, and epidemiology and economics.Useful as a reference work for health service researchers, government specialists, and physicians and others in the health care field.

Table of Contents

Preface	xxiii
PART I: BASIC ECONOMICS TOOLS	1	(88)
Introduction	1	(19)
The Relevance of Health Economics	1	(7)
The Size and Scope of the Health Economy	2	(1)
Health Care's Share of GDP in the United States	2	(1)
Health Care Spending in Other Countries	3	(1)
Importance of the Health Economy in Personal Spending	4	(1)
Importance of the Health Economy to the Labor Force	4	(1)
Capital Investment in the Health Economy	5	(1)
Time---The Ultimate Resource	6	(1)
The Importance Attached to Economic Problems of Health Care Delivery	6	(1)
Inflation	7	(1)
Access	7	(1)
Quality	7	(1)
The Economic Side to Other Health Issues	7	(1)
Economic Methods and Examples of Analysis	8	(2)
Features of Economic Analysis	8	(1)
Examples of Health Economics Analysis	9	(1)
Does Economics Apply to Health and Health Care?	10	(1)
An Example: Does Price Matter?	11	(1)
Is Health Care Different?	11	(3)
Presence and Extent of Uncertainty	12	(1)
Prominence of Insurance	12	(1)
Problems of Information	13	(1)
Large Role of Nonprofit Firms	13	(1)
Restrictions on Competition	14	(1)
Role of Equity and Need	14	(1)
Government Subsidies and Public Provision	14	(1)
New Challenges to Health Economists--Managed Care, Health Care Costs, and Health Insurance	14	(3)
Conclusions	17	(1)
Summary	17	(1)
Discussion Questions	18	(1)
Exercises	18	(2)
Microeconomic Tools for Health Economics	20	(31)
Scarcity and the Production Possibilities Frontier	21	(3)
Practice with Supply and Demand	24	(3)
The Demand Curve and Demand Shifters	24	(1)
The Supply Curve and Supply Shifters	25	(1)
Equilibrium	26	(1)
Comparative Statics	26	(1)
Functions and Curves	27	(2)
Linear Functions	27	(1)
Demand Functions	28	(1)
Derived Demand	29	(1)
Consumer Theory: Ideas Behind the Demand Curve	29	(5)
Utility	29	(2)
Indifference Curves	31	(1)
Budget Constraints	32	(1)
Consumer Equilibrium	33	(1)
Individual and Market Demands	34	(1)
Elasticities	35	(1)
Production and Market Supply	36	(7)
The Production Function	37	(1)
Production Functions	38	(2)
Isocost Curves	40	(1)
Cost Minimization or Output Maximization	41	(1)
Marginal and Average Cost Curves	42	(1)
The Firm Supply Curve Under Perfect Competition	43	(2)
Monopoly and Other Market Structures	45	(1)
Welfare Losses	46	(2)
Conclusions	48	(1)
Summary	49	(1)
Discussion Questions	49	(1)
Exercises	50	(1)
Statistical Tools for Health Economics	51	(17)
Hypothesis Testing	52	(1)
Difference of Means	53	(4)
The Variance of a Distribution	53	(1)
Standard Error of the Mean	54	(2)
Hypotheses and Inferences	56	(1)
Regression Analysis	57	(4)
Ordinary Least Squares (OLS) Regressions	58	(1)
A Demand Regression	59	(1)
Estimating Elasticities	60	(1)
Multiple Regression Analysis	61	(3)
Interpreting Regression Coefficients	61	(1)
Dummy Variables	62	(2)
Statistical Inference in the Sciences and Social Sciences	64	(1)
Conclusions	65	(1)
Summary	65	(1)
Discussion Questions	66	(1)
Exercises	66	(2)
Economic Efficiency and Cost Benefit Analysis	68	(21)
Economic Efficiency	68	(3)
Cost-Benefit Analysis: Background	71	(1)
Cost-Benefit Analysis: Basic Principles	72	(8)
Measuring Costs	72	(1)
Risk Equity Versus Equality of Marginal Costs per Life Saved	73	(1)
Marginal Analysis in CBA	73	(1)
Discounting	74	(2)
Risk Adjustment and CBA	76	(1)
Distributional Adjustments	77	(1)
Inflation	77	(1)
Valuing Human Life	77	(2)
Cost-Benefit Analyses of Disease-Screening Programs	79	(1)
Cost-Effectiveness Analysis	80	(1)
Advantages of CEA	81	(1)
Cost-Utility Analysis, QALYs, and DALYs	81	(2)
An Ace Inhibitor Application of Cost Effectiveness Analysis	82	(1)
Is CUA Consistent with CBA?	83	(1)
Extra-Welfarism	83	(1)
The Ageism Critique of QALYs	84	(1)
Conclusions	84	(1)
Summary	85	(1)
Discussion Questions	86	(1)
Exercises	86	(2)
Appendix--Discounting	88	(1)
PART II: SUPPLY AND DEMAND	89	(110)
The Production of Health	89	(22)
The Production Function of Health	89	(3)
The Historical Role of Medicine and Health Care	92	(7)
The Rising Population and the Role of Medicine	92	(2)
What Caused the Mortality Rate Declines?	94	(1)
On the Role of Public Health and Nutrition	95	(2)
What Lessons Are Learned from the Medical Historian?	97	(1)
What Does Health Care Contribute?	98	(1)
The Production Function of Health in the Modern Day	99	(7)
Preliminary Issues	99	(1)
The Contribution of Health Care to Population Health: The Modern Era	99	(1)
Is Health Care Worth It?	100	(1)
Issues of Race and Gender	101	(1)
Prenatal Care Works	101	(1)
The World's Pharmacies	102	(1)
Morbidity Studies	102	(1)
How Does Health Care Affect Other Measures of Health?	103	(1)
On the Importance of Lifestyle and Environment	104	(1)
Cigarettes and Health	105	(1)
The Family as Producer of Health	105	(1)
Environmental Pollution	106	(1)
Income and Health	106	(1)
The Role of Schooling	106	(2)
Two Different Theories About the Role of Schooling	107	(1)
Empirical Studies on the Role of Schooling in Health	107	(1)
Conclusions	108	(1)
Summary	109	(1)
Discussion Questions	109	(1)
Exercises	110	(1)
The Production, Cost, and Technology of Health Care	111	(26)
Production and the Possibilities for Substitution	112	(4)
Substitution	112	(1)
What Degree of Substitution Is Possible?	113	(1)
Elasticity of Substitution	114	(1)
Estimates for Hospital Care	115	(1)
Costs in Theory and Practice	116	(8)
Deriving the Cost Function	116	(1)
Cost Minimization	116	(2)
Economies of Scale and Scope	118	(1)
Why Would Economies of Scale and Scope Be Important?	119	(2)
Empirical Cost-Function Studies	121	(1)
Differences Among Hospital Cost Studies	121	(1)
Difficulties Faced by All Hospital Cost Studies	122	(2)
Summarizing Cost Studies	124	(1)
Technical and Allocative Inefficiency	124	(4)
Technical Inefficiency	124	(1)
Allocative Inefficiency	125	(1)
Frontier Analysis	126	(2)
Technological Changes and Costs	128	(4)
Technological Change: Cost Increasing or Decreasing?	129	(1)
Health Care Price Increases When Technological Change Occurs	129	(3)
Diffusion of New Health Care Technologies	132	(2)
Who Adopts and Why?	132	(1)
Other Factors That May Affect Adoption Rates	133	(1)
Diffusion of Technology and Managed Care	133	(1)
Conclusions	134	(1)
Summary	134	(1)
Discussion Questions	135	(1)
Exercises	135	(2)
Demand for Health Capital	137	(16)
The Demand for Health	137	(2)
The Consumer as Health Producer	137	(2)
Time Spent Producing Health	139	(1)
Labor-Leisure Trade-Offs	139	(2)
Trading Leisure for Wages	139	(1)
Preferences Between Leisure and Income	140	(1)
The Investment/Consumption Aspects of Health	141	(2)
Production of Healthy Days	141	(1)
Production of Health and Home Goods	142	(1)
Investment over Time	143	(1)
The Cost of Capital	143	(1)
The Demand for Health Capital	144	(1)
Marginal Efficiency of Investment (MEI) and Rate of Return	144	(1)
The Decreasing MEI	144	(1)
Changes in Equilibrium: Age, Wage, Education, and Uncertainty	145	(3)
Age	145	(1)
Wage Rate	146	(1)
Education	147	(1)
Uncertainty	148	(1)
Empirical Analyses Using Grossman's Model	148	(3)
Conclusions	151	(1)
Summary	151	(1)
Discussion Questions	151	(1)
Exercises	152	(1)
Demand and Supply of Health Insurance	153	(23)
What Is Insurance?	153	(2)
Insurance Versus Social Insurance	154	(1)
Insurance Terminology	154	(1)
Risk and Insurance	155	(3)
Expected Value	156	(1)
Marginal Utility of Wealth and Risk Aversion	156	(2)
Purchasing Insurance	158	(1)
The Demand for Insurance	158	(4)
How Much Insurance?	158	(1)
Changes in Premiums	159	(2)
Changes in Expected Loss	161	(1)
Changes in Wealth	161	(1)
The Supply of Insurance	162	(2)
Competition and Normal Profits	162	(2)
The Case of Moral Hazard	164	(4)
Demand for Care and Moral Hazard	165	(1)
Effects of Coinsurance and Deductibles	166	(2)
Health Insurance and the Efficient Allocation of Resources	168	(5)
The Impact of Coinsurance	168	(3)
The Demand for Insurance and the Price of Care	171	(1)
The Welfare Loss of Excess Health Insurance	172	(1)
Conclusions	173	(1)
Summary	173	(1)
Discussion Questions	174	(1)
Exercises	174	(2)
Consumer Choice and Demand	176	(23)
Applying the Standard Budget Constraint Model	176	(5)
The Consumer's Equilibrium	178	(1)
Demand Shifters	179	(2)
Health Status and Demand	181	(1)
Two Additional Demand Shifters---Time and Coinsurance	181	(4)
The Role of Time	181	(2)
The Role of Coinsurance	183	(2)
Issues in Measuring Health Care Demand	185	(3)
Individual and Market Demand Functions	186	(1)
Measurement and Definitions	186	(1)
Differences in the Study Populations	186	(1)
Data Sources	187	(1)
Experimental and Nonexperimental Data	187	(1)
Empirical Measurements of Demand Elasticities	188	(5)
Price Elasticities	188	(1)
Individual Income Elasticities	189	(1)
Income Elasticities Across Countries	190	(1)
Insurance Elasticities	191	(2)
Impacts of Insurance on Aggregate Expenditures	193	(1)
Other Variables Affecting Demand	193	(2)
Ethnicity and Gender	193	(1)
Urban Versus Rural	194	(1)
Education	194	(1)
Age, Health Status, and Uncertainty	195	(1)
Conclusions	195	(1)
Summary	196	(1)
Discussion Questions	197	(1)
Exercises	197	(2)
PART III: INFORMATION AND INSURANCE MARKETS	199	(95)
Asymmetric Information and Agency	199	(16)
Overview of Information Issues	200	(1)
Asymmetric Information	200	(4)
On the Extent of Information Problems in the Health Sector	201	(1)
Asymmetric Information in the Used-Car Market: The Lemons Principle	202	(2)
Application of the Lemons Principle: Health Insurance	204	(2)
Inefficiencies of Adverse Selection	205	(1)
Experience Rating and Adverse Selection	206	(1)
The Agency Relationship	206	(2)
Agency and Health Care	207	(1)
Consumer Information, Prices, and Quality	208	(3)
Consumer Information and Prices	208	(1)
Consumer Information and Quality	209	(1)
Other Quality Indicators	210	(1)
Conclusions	211	(1)
Summary	212	(1)
Discussion Questions	213	(1)
Exercises	213	(2)
The Organization of Health Insurance Markets	215	(26)
Loading Costs and the Behavior of Insurance Firms	215	(3)
Impacts of Loading Costs	216	(1)
Insurance for Heart Attacks and Hangnails	217	(1)
Loading Costs and the Uninsured	217	(1)
Employer Provision of Health Insurance: Who Pays?	218	(6)
Spousal Coverage: Who Pays?	220	(1)
How the Tax System Influences Health Insurance Demand	221	(1)
Who Pays---Empirical Tests	222	(1)
Other Impacts of Employer Provision of Health Insurance	223	(1)
Employer-Based Health Insurance and Labor Supply	224	(2)
Health Insurance and Retirement	224	(1)
Health Insurance and Mobility	224	(2)
The Market for Insurance	226	(3)
The Market for Private Insurance	226	(1)
Insurance Practices	226	(2)
The Past 20 Years	228	(1)
The Uninsured: An Analytical Framework	229	(5)
The Working Uninsured	230	(3)
The Impacts of Mandated Coverage	233	(1)
Insurance, Technological Change, and Higher Costs	234	(2)
The Cost-Increasing Bias Hypothesis	234	(1)
The Goddeeris Model	235	(1)
Evidence on Insurance, Technological Change, and Inflation	236	(1)
Does Induced Technological Change Make the Patient Better Off?	237	(1)
Conclusions	237	(1)
Summary	238	(1)
Discussion Questions	238	(1)
Exercises	239	(2)
Managed Care	241	(29)
What Is the Organizational Structure?	243	(1)
What Are the Economic Characteristics?	243	(2)
The Emergence of Managed Care Plans	245	(4)
Employer-Sponsored Managed Care	245	(1)
Medicaid Managed Care Plans	246	(1)
Managed Care Contracts with Physicians	247	(1)
Managed Care Contracts with Hospitals	248	(1)
Development and Growth of Managed Care: Why Did It Take So Long?	249	(2)
Federal Policy and the Growth of Managed Care	249	(1)
The Economics of Managed Care	250	(1)
Modeling Managed Care	251	(5)
Modeling Individual HMOs	251	(1)
How Much Care?	252	(1)
What Types of Care?	253	(1)
Framework for Prediction	253	(1)
Where Managed Care Differs from FFS---Dumping, Creaming, and Skimping	254	(1)
Equilibrium and Adverse Selection in a Market with HMOs	254	(2)
How Does Managed Care Differ?---Empirical Results	256	(3)
Methodological Issues---Selection Bias and Quality of Care	257	(1)
Comparative Utilization and Costs	257	(1)
The Rand Study: A Randomized Experiment	258	(1)
The Most Recent Evidence	259	(1)
Growth in Spending	259	(3)
Competitive Effects	262	(4)
Theoretical Issues	262	(1)
Managed Care Competition in Hospital Markets	263	(1)
Managed Care Competition in Insurance Markets	264	(1)
Managed Care and Technological Change	265	(1)
Conclusions	266	(1)
Summary	267	(1)
Discussion Questions	268	(1)
Exercises	268	(2)
Nonprofit Firms	270	(24)
An Introduction to Nonprofits	270	(1)
Why Nonprofits Exist and Why They Are Prevalent in Health Care	271	(7)
Nonprofits as Providers of Unmet Demands for Public Goods	271	(1)
The Public Good-Private Good Aspect of Donations	272	(2)
Relevance to Health Care Markets	274	(1)
Nonprofits as a Response to Contract Failure	275	(1)
Applications of Contract Failure to Nursing Home Care	275	(1)
Relevance of Contract Failure to Hospitals and Other Firms	276	(1)
The Role of Physicians in the Hospital Industry	276	(1)
Financial Matters and the Nonprofit	277	(1)
Summary of the Reasons for the Prevalence of Nonprofits	277	(1)
Models of Nonprofit Hospital Behavior	278	(10)
The Quality-Quantity Nonprofit Theory	278	(2)
The Hospital as a Physicians' Cooperative	280	(1)
Maximizing Net Revenue per Physician	281	(1)
A Comparison of the Quantity-Quality and the Physicians' Cooperative Theories	282	(2)
The Evidence: Do Nonprofit Hospitals Differ from For-Profit Hospitals?	284	(1)
The Harris Model	285	(1)
Summary of Models of Hospital Behavior	286	(1)
What Causes Conversion of Nonprofits into For-Profits?	287	(1)
The Relative Efficiency of Nonprofits Versus For-Profits	288	(3)
Property Rights Theory and Its Application to Nonprofits	288	(2)
Are Nonprofit Health Care Firms Less Efficient?---Hospital and Nursing Home Studies	290	(1)
Conclusions	291	(1)
Summary	292	(1)
Discussion Questions	293	(1)
Exercises	293	(1)
PART IV: KEY PLAYERS IN THE HEALTH CARE SECTOR	294	(89)
Hospitals and Long-Term Care	294	(19)
Background and Overview of Hospitals	294	(4)
History	295	(1)
Organization	296	(1)
Regulation and Accreditation	297	(1)
Hospital Utilization and Costs	298	(5)
Competition and Costs	299	(3)
Closures, Mergers, and Restructuring in the Hospital Industry	302	(1)
Nursing Homes	303	(6)
Background and Costs	303	(2)
Quality of Care	305	(1)
Excess Demand	306	(1)
Financing Long-Term Care	307	(2)
Hospice, Home Health, and Informal Care	309	(1)
Conclusions	310	(1)
Summary	310	(1)
Discussion Questions	311	(1)
Exercises	311	(2)
The Physician's Practice	313	(18)
A Benchmark Model of the Physician's Practice	313	(3)
Supplier-Induced Demand (SID)	316	(5)
The Supply and Demand Model	316	(1)
The Target Income Hypothesis	317	(1)
The Benchmark Model as a Synthesis	318	(1)
The Parallel Between Inducement and Advertising	319	(1)
What Do the Data Say About Supplier-Induced Demand?	320	(1)
Physician Fees, Fee Tests, and Fee Controls	320	(1)
Small Area Variations (SAV)	321	(5)
Contributions to These Variations	322	(1)
The Physician Practice Style Hypothesis	323	(1)
Checking the Practice Style Hypothesis Against the Data	323	(1)
SAV and the Social Cost of Inappropriate Utilization	324	(1)
SAV Analysis in Other Applications	325	(1)
Other Physician Issues and Policy Puzzles	326	(2)
Physician Pricing and Price Discrimination	326	(1)
Paying for Outcomes	327	(1)
Conclusions	328	(1)
Summary	328	(1)
Discussion Questions	329	(1)
Exercises	330	(1)
Health Care Labor Markets and Professional Training	331	(27)
The Demand for and Supply of Health Care Labor	331	(5)
Production Functions and Isoquants	332	(1)
Marginal Productivity of Labor	333	(1)
Factor Substitution and Labor Demand	334	(1)
The Supply of Labor	334	(2)
Factor Productivity and Substitution Among Factors	336	(2)
Measurement of Physician Productivity	336	(1)
The Efficient Utilization of Physician Assistants: Substitution Among Inputs	337	(1)
Health Manpower Availability and the Meaning of Shortages	338	(6)
Availability of Physicians	338	(2)
Economic Definitions of Shortages of Health Professionals	340	(2)
The Role of Monopsony Power: Shortages of Registered Nurses	342	(2)
Medical Education Issues and the Question of Control	344	(5)
Sources of Medical School Revenues	345	(1)
Capital Market Imperfections Justify Subsidies	345	(1)
Teaching Hospitals, Medical Schools, and Joint Production	345	(1)
Foreign Medical School Graduates (FMGs)	346	(1)
The Control of Medical Education	347	(1)
Control over Entry	348	(1)
Another View: The Donor Preference Hypothesis	348	(1)
Licensure and Monopoly Rents	349	(4)
Public Interest or Self-Interest	350	(1)
Licensure and Quality	351	(2)
Other Physician Labor Issues	353	(1)
Specialization	353	(1)
Physician Income by Gender	353	(1)
Conclusions	354	(1)
Summary	355	(1)
Discussion Questions	355	(1)
Exercises	356	(2)
The Pharmaceutical Industry	358	(25)
Structure and Regulation	360	(3)
Competition	360	(1)
Barriers to Entry	361	(1)
Regulation	362	(1)
The Production of Health and Substitutability	363	(5)
Least-Cost Production	365	(1)
Insurance and Substitutability	366	(1)
Technological Change	366	(2)
Drug Pricing and Profits	368	(4)
Monopoly Pricing	369	(1)
Price Discrimination	370	(1)
Behavior Other Than Profit-Maximizing Behavior	371	(1)
Monopsony Pricing and Price Controls	371	(1)
Competition and Generic Entry	372	(1)
R&D and Innovation	372	(3)
Investment Decisions	373	(1)
R&D Spending	374	(1)
Firm Size and Innovation	375	(1)
Cost Containment	375	(4)
Copayments	377	(1)
Generic Substitutes	378	(1)
Drug Formularies	378	(1)
Conclusions	379	(1)
Summary	380	(1)
Discussion Questions	380	(1)
Exercises	381	(2)
PART V: SOCIAL INSURANCE	383	(142)
Equity, Efficiency, and Need	383	(24)
Efficiency and Competitive Markets	384	(5)
The Concept of Pareto Efficiency (Optimality)	384	(2)
Trading Along the Budget Line	386	(1)
The Competitive Equilibrium	386	(1)
The First Fundamental Theorem of Welfare Economics	387	(1)
Redistribution of the Endowment	387	(1)
Price Discrimination	388	(1)
Trade-offs Between Equity and Efficiency	389	(1)
Deviations from the Competitive Model in the Health Care Sector	389	(2)
The Assumptions Under Perfect Competition	389	(2)
Promoting Competition in the Health Care Sector	391	(1)
The Theorem of the Second Best	391	(1)
An Economic Efficiency Rationale for Health Care Programs Based on Externalities	392	(2)
Need and Need-Based Distributions	394	(5)
Health Care Needs and the Social Welfare Function	395	(2)
Norman Daniels's Concept of Health Care Need	397	(2)
Economic Criticisms of Need-Based Distributions	399	(1)
Horizontal Equity and Need	399	(2)
Comparing Horizontal Equity Among Countries	400	(1)
The Results	400	(1)
Theories of Social Justice	401	(3)
Utilitarianism	401	(1)
Rawls and Justice as Fairness	402	(1)
Liberalism, Classical and Modern	403	(1)
Conclusions	404	(1)
Summary	405	(1)
Discussion Questions	405	(1)
Exercises	406	(1)
Government Intervention in Health Care Markets	407	(23)
Economic Rationale for Government Intervention	407	(5)
Monopoly Power	408	(1)
Public Goods	409	(2)
Externalities	411	(1)
Other Rationales for Government Intervention	412	(1)
Forms of Government Intervention	412	(3)
Commodity Taxes and Subsidies	412	(2)
Public Provision	414	(1)
Transfer Programs	414	(1)
Regulation	415	(1)
Government Involvement in Health Care Markets	415	(5)
Support of Hospitals	416	(1)
The Hill-Burton Act	416	(1)
The Veterans Administration and CHAMPUS	416	(1)
Food and Drug Administration	417	(1)
Mandated Health Insurance Benefits	417	(1)
Tax Policy	417	(1)
Public Health	418	(1)
Other Government Programs	418	(2)
Government Failure	420	(3)
Who Does the Regulator Represent?	420	(2)
Bureaucracy and Efficiency	422	(1)
Competitive Strategies	423	(5)
Increased Cost Sharing	424	(1)
Development of Alternative Delivery Systems	424	(1)
Consumer-Driven Health Plans and Health Savings Accounts	425	(2)
Representation of the Competitive Approach	427	(1)
Conclusions	428	(1)
Summary	428	(1)
Discussion Questions	429	(1)
Exercises	429	(1)
Government Regulation: Principal Regulatory Mechanisms	430	(31)
Do the Laws of Supply and Demand Apply?	430	(1)
Objectives of Regulation	431	(2)
Regulatory Policy	432	(1)
Regulatory Instruments in Health Care	432	(1)
Regulation of the Hospital Sector	433	(5)
Rate Regulation, Utilization Review, and Certificate of Need	433	(1)
Empirical Findings on Regulation	434	(4)
Prospective Payment	438	(2)
Description of PPS	438	(2)
The Theory of Yardstick Competition and DRGs	440	(8)
On the Effects of Medicare's Prospective Payment System	444	(4)
Prospective Payment: Recent Evidence	448	(1)
Regulation of Physician Payment	449	(2)
UCR Reimbursement, Assignment, and Alternative Payment Mechanisms	449	(1)
Relative Value Scales	449	(2)
Antitrust	451	(6)
Enforcement	451	(1)
Exemptions	451	(2)
Measuring Monopoly Power	453	(1)
Antitrust Procedures	454	(2)
The Elzinga-Hogarty (EH) Criterion	456	(1)
Conclusions	457	(1)
Summary	458	(1)
Discussion Questions	458	(1)
Exercises	459	(2)
Social Insurance	461	(30)
Social Insurance Policies and Social Programs	461	(2)
Program Features	462	(1)
Historical Roots of Social Insurance	463	(2)
European Beginnings	463	(1)
Early Experience in the United States	464	(1)
The Establishment of Medicare and Medicaid	465	(1)
Medicare and Medicaid in the United States	465	(9)
Medicare	466	(5)
Medicaid Overview	471	(1)
Medicaid Eligibility	471	(3)
The Medicaid-Medicare Relationship	474	(1)
State Children's Health Insurance Program	474	(1)
Public Insurance and Health	474	(3)
The Effects of Medicare and Medicaid	477	(9)
Costs and Inflation	477	(5)
Health Status	482	(1)
Medicare: Recent Changes and Future Prospects	483	(3)
Criticisms of the U.S. Health Care System	486	(1)
Conclusions	487	(1)
Summary	488	(1)
Discussion Questions	488	(1)
Exercises	489	(2)
Comparative Health Care Systems and Health System Reform	491	(34)
Contemporary Health Care Systems	491	(1)
A Typology of Contemporary Health Care Systems	491	(1)
National Health Programs: United Kingdom and Germany	492	(10)
The United Kingdom: The National Health Service	494	(4)
Germany	498	(4)
The Canadian Health Care System	502	(6)
Background	503	(2)
Physician Fees and Quantity	505	(1)
Why Are Fees and Hospital Costs Lower in Canada?	505	(1)
Administrative Costs	506	(1)
A Comparison	506	(2)
Different Systems: The Public's Evaluation	508	(2)
Differences in Health Care Spending Across Countries	510	(4)
A Simple Model of Health Expenditures Shares	511	(3)
National Health Insurance	514	(2)
Different Kinds of National Health Insurance (NHI) Plans	514	(1)
The Costs of NIII	515	(1)
Ensuring Access to Care	516	(5)
Employer Versus Individual Mandates	516	(2)
Separation of Health Insurance from Employment	518	(1)
Single Payer Versus Multiple Insurers	518	(2)
Health Care Reform and International Competitiveness	520	(1)
Conclusions	521	(1)
Summary	521	(1)
Discussion Questions	522	(1)
Exercises	523	(2)
PART VI: SPECIAL TOPICS	525	(34)
The Health Economics of Bads	525	(16)
An Introduction to Bads	526	(1)
Models of Addiction	527	(3)
Imperfectly Rational Addiction Models	527	(1)
Myopic Addiction Models	527	(1)
Rational Addiction	528	(2)
Rationales for Public Intervention	530	(1)
Other Interventions	531	(1)
Advertising Restrictions on Cigarettes and Alcohol	531	(4)
Theories of Advertising	532	(1)
The Possible Effects of Brand Switching	533	(1)
Increased Demand or Brand Switching?	534	(1)
Advertising and Alcohol Consumption	535	(1)
Excise Taxes and Consumption of Cigarettes and Alcohol	535	(4)
The Consumption-Reducing Effects of Excise Taxes in Theory	535	(1)
Excise Taxes and Cigarette Consumption in Practice	536	(2)
Excise Taxes and Alcohol Consumption	538	(1)
Conclusions	539	(1)
Summary	539	(1)
Discussion Questions	539	(1)
Exercises	540	(1)
Epidemiology and Economics: HIV/AIDS in Africa	541	(18)
Concepts from Epidemiology	541	(2)
Economic Epidemiology	543	(5)
Rational Epidemics	543	(1)
The Prevalence Elasticity of Demand for Prevention	544	(1)
The Economic Consequences of Epidemics	545	(1)
The Difficulty of Eradicating Diseases	546	(1)
Information	547	(1)
The Role of Government in Battling Epidemics	547	(1)
Case Study: HIV/AIDS in Africa	548	(7)
HIV/AIDS	548	(2)
Costs of AIDS	550	(1)
Fighting AIDS	551	(4)
Economic Theory and African Reality	555	(1)
Conclusions	555	(1)
Summary	556	(1)
Discussion Questions	556	(1)
Exercises	556	(3)
Glossary	559	(7)
References	566	(28)
Name Index	594	(4)
Subject Index	598