Health Economics and Financing

by Getzen, Thomas E.

• ISBN13: 9781118184905
• ISBN10: 1118184904
• Additional ISBN(s): 9781118545348, 9781119815686
• Edition: 5th
• Format: Hardcover
• Copyright: 2012-11-27
• Publisher: Wiley
• More Book Details

Summary

Getzen's 5th edition of Health Economics and Financing is a primer for the economic analysis of medical markets that engages the central economic issues of the health economics and financing field. It provides principles and concepts of health economics rather and limited research methods, use of attribution, footnotes and references. Furthermore, this edition offers a strengthened macro section along with additional material on the ACA (Health Reform) as it is such a relevant topic today.

Author Biography

Thomas E. Getzen is the author of Health Economics and Financing, 5th Edition, published by Wiley.

Table of Contents

Preface

Acknowledgments

About the Author

Foreword

CHAPTER 1 CHOICES:  MONEY, MEDICINE AND HEALTH

Questions

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

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 2 DEMAND AND SUPPLY

Questions

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

Suggestions for Further Reading

Summary                                

Problems   

Endnotes

CHAPTER 3 COST?BENEFIT AND COST-EFFECTIVENESS ANALYSIS

Questions

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

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/

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 4 HEALTH INSURANCE: FINANCING MEDICAL CARE

Questions

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

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 5 INSURANCE CONTRACTS AND MANAGED CARE

Questions

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

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 6 PHYSICIANS

Questions

6.1 Financing Physician Services: Revenues

Copayments, Assignment, and Balance Billing

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

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 7 MEDICAL EDUCATION, ORGANIZATION, AND BUSINESS PRACTICES

Questions

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 2010

7.3 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

7.9 Choices by and for Physicians

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 8 HOSPITALS

Questions

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?

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 9 MANAGEMENT AND REGULATION OF HOSPITAL COSTS

Questions

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

Chargemaster and Negotiated Fees

Cost Finding: Gross Revenues and the RCCAC

Medicare as a Standard for Pricing

9.7 Controlling Hospital Costs through Regulation

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 10 LONG-TERM CARE

Questions

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

10.10 Financial Reimbursement Cycles

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 11 PHARMACEUTICALS

Questions

11.1Pharmaceutical Revenues: Sources of Financing

Inpatient Pharmaceuticals

11.2 Uses of Funds

Retail Pharmacies

Wholesalers

Insurance Companies and PBMs

Pharmaceutical Firms

Cost Structure

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

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 12 FINANCING AND OWNERSHIP OF HEALTH CARE PROVIDERS

Questions

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?

For-Profit or Not-for-Profit: Which Is Better?

Medical Care is Difficult: Risk, Information Asymmetry, Social Justice

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 13 MACROECONOMICS OF MEDICAL CARE

Questions

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

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 14 THE ROLE OF GOVERNMENT AND PUBLIC GOODS

Questions

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

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

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 15 HISTORY, DEMOGRAPHY, AND THE GROWTH OF MODERN MEDICINE

Questions

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

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?

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 16 INTERNATIONAL COMPARISONS OF HEALTH AND HEALTH EXPENDITURES

Questions

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

People and Ideas

Services

Equipment

Pharmaceuticals

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 17 ECONOMIC EVALUATION OF HEALTH POLICY: THE PATIENT PROTECTION AND AFFORDABLE CARE ACT OF 2010

Questions

17.1ACA 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?

Suggestions for Further Reading

Summary

Problems

Endnotes

CHAPTER 18 VALUE FOR MONEY IN THE FUTURE OF HEALTH CARE

Questions

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

Suggestions for Further Reading

Summary

Problems

Endnotes

Glossary

Index