Health Economics Theories, Insights, and Industry Studies with Economic Applications Card

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ISBN: 9780324171860 | 0324171862
Cover: Hardcover
Copyright: 3/14/2003

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Authors Santerre and Neun take a fresh contemporary approach to health economics. The writing style is lively and inviting to students that are intimidated by the term "economics." The authors use several real-world applications to make the economic theory more approachable to students. The central theme of Health Economics, 3e relates to the costs and benefits associated with various health care choices. Using this theme, the book covers the many changes that have taken place in the field of health care in both the public and private sectors.

Preface

iii

Part 1 BASIC HEALTH CARE ECONOMIC TOOLS AND INSTITUTIONS

(222)

CHAPTER 1 Introduction

(27)

What Is Health Economics?

(1)

The Four Basic Questions

(4)

Production and Allocative Efficiency and the Production Possibilities Curve

(3)

The Distribution Question

(1)

Implications of the Four Basic Questions

(1)

Economic Models and Analysis

(4)

Economic Models

(2)

Empirical Testing of Health Economic Theories

(2)

Insight 1-1: We Should Address Some Basic Questions

(1)

Positive and Normative Analysis

(1)

The Net Benefit Calculus

(2)

The Theories X and Y of Health Economics

(2)

Insight 1-2: The Opportunity Cost of 1 Million Medical Dollars

(2)

Insight 1-3: A Growing Economy Can Pay Its Health Care Bills

(1)

Summary

(1)

Review Questions and Problems

(1)

Online Resources

(1)

References

(1)

CESS Questions

(1)

Appendix to Chapter 1

(5)

Regression Analysis

(5)

CHAPTER 2 Health and Medical Care: An Economic Perspective

(23)

What Is Health?

(1)

Why Good Health? Utility Analysis

(2)

What Is Medical Care?

(2)

The Production of Good Health

(6)

Empirical Evidence on the Production of Health in the United States

(2)

The Determinants of Health Among Adults

(1)

Insight 2-1: It's the Economy, Stupid!

(2)

Insight 2-2: A Look at the Major Causes of Death in the United States in 2000

(2)

Insight 2-3: The Impact of Drug Use on Number of Newborns with Low Birthweight in New York City

(2)

The Determinants of Health Among Children

(2)

Summary

(1)

Review Questions and Problems

(1)

Online Resources

(1)

References

(3)

CHAPTER 3 Cost and Benefit Analysis

(21)

Cost Identification Analysis

(1)

Cost-Benefit Analysis

(9)

The Practical Side of Using Cost-Benefit Analysis to Make Health Care Decisions

(1)

Discounting

(1)

The Value of Life

(3)

Insight 3-1: "Mother, How Much Is the Health and Welfare of Your Child Worth?"

(1)

An Application of Cost-Benefit Analysis Should College Students Be Vaccinated?

(2)

Insight 3-2: The Cost and Benefits of Medical Technologies

(1)

Cost Effectiveness Analysis

(3)

An Application of Cost Effectiveness Analysis: Autologous Blood Donations-Are They Cost Effective?

(1)

Insight 3-3: The Monetary Value of Improvements in Health from 1970 to 1990: Was It Worth the Cost?

(1)

Summary

(1)

Review Questions and Problems

(2)

Online Resources

(1)

References

(2)

CHAPTER 4 Health Care Systems and Institutions

(24)

Elements of a Health Care System

(2)

The Role and Financing Methods of Third-Party Payers

(2)

Risk Management, Reimbursement, and Consumer Cost Sharing

(3)

Insight 4-1: Physician Utilization Rates in Salary and Fee-Based Reimbursement Systems

(2)

The Production of Medical Services

(2)

Institutional Differences Between For-Profit and Not-for-Profit Health Care Providers

(1)

Why Are Not-for-Profit Health Care Providers So Prevalent?

(3)

Production of Health Care in the Three Systems

Insight 4-2: Medical Technology in Canada, Germany, the United Kingdom, and the United States

(2)

Physician Choice and Referral Practices

(1)

The Three National Health Care Systems Summarized

(2)

An Overview of the U.S. Health Care System

(3)

Financing of Health Care in the United States

(1)

Reimbursement for health Care in the United States

(1)

Production of Health Services and Provider Choice in the United States

(1)

Insight 4-3: Consumer Satisfaction with the Health Care System in Canada, Germany, United Kingdom, and the United States

(1)

Summary

(1)

Review Questions and Problems

(1)

Online Resources

(1)

References

(1)

CESS Questions

(2)

CHAPTER 5 The Demand for Medical Services

(41)

The Demand for Health Care Services and the Law of Demand

(12)

The Utility-Maximizing Rule

(2)

The Law of Demand

101

(2)

Other Economic Demand-Side Factors

103

(2)

The Relationship Between Health Insurance and the Demand for Medical Services

105

(4)

Moral Hazard

109

(1)

Noneconomic Determinants of the Demand for Medical Services

110

(1)

Insight 5-1: Did Cinderella Have Routine Visits to the Doctor?

111

(3)

The Market Demand for Health Care

113

(1)

The Fuzzy Demand Curve

113

(1)

Elasticities

114

(1)

Insight 5-2: Substitutes or Complements? The Demand for Traditional and Western Medicine in Taiwan

115

(1)

Own-Price Elasticity of Demand

115

(3)

Insight 5-3: Those Pointy-Headed Economists

118

(2)

Other Types of Elasticity

120

(1)

Empirical Estimation

120

(1)

Insight 5-4: An International Look at the Relationship Between Income and Health Care Spending

121

(5)

Own-Price, Income, Cross-Price, and Time Cost Elasticity Estimates

122

(2)

The Impact of Insurance on the Demand for Medical Services

124

(1)

The Impact of Noneconomic Factors on the Demand for Medical Services

125

(1)

Insight 5-5: Time Is Money: It Was Then and Still Is Now

126

(1)

Health Care Spending in the United States

127

(3)

Sources and Uses of Medical Funds in the United States in 2000

128

(2)

Insight 5-6: Out-of-Pocket Expenditures in 2000

130

(2)

Summary

132

(1)

Review Questions and Problems

132

(2)

Online Resources

134

(1)

References

134

(3)

CESS Questions

137

(2)

CHAPTER 6 The Demand for Medical Insurance: Traditional and Managed Care Coverage

139

(22)

The Demand for Private Health Insurance

140

(6)

Deriving the Demand for Private Health Insurance

140

(3)

Factors Affecting the Quantity Demanded of Health Insurance

143

(3)

Insight 6-1: The Demand for Employer Contributions to Health Insurance Premiums

146

(2)

The Health Insurance Product: Traditional versus Managed Care Insurance

148

(5)

Financial Incentives and Management Strategies Facing Consumers/Patients

150

(1)

Financial Incentives and Management Strategies Facing Health Care Providers

150

(3)

The Regulation of MCOs

153

(1)

Insight 6-2: Satisfaction with Managed Care in Switzerland

154

(2)

Insight 6-3: Increasing the Demand for Private Health Insurance in Australia

156

(1)

Summary

157

(1)

Review Questions and Problems

158

(1)

Online Resources

159

(1)

References

159

(2)

CHAPTER 7 Medical Care Production and Costs

161

(30)

The Short-Run Production Function of the Representative Medical Firm

162

(7)

Marginal and Average Products

164

(4)

Elasticity of Input Substitution

168

(1)

Short-Run Cost Theory of the Representative Medical Firm

169

(1)

Insight 7-1: A Production Function for Hospital Admissions

170

(8)

The Short-Run Cost Curves of the Representative Medical Firm

171

(1)

Short-Run Per-Unit Costs of Production

172

(5)

Factors Affecting the Position of the Short-Run Cost Curves

177

(1)

Insight 7-2: Estimating a Short-Run Cost Function for Hospital Services

178

(1)

The Cost-Minimizing Input Choice

179

(2)

Insight 7-3: The Shadow Price of an Admitting Physician

181

(1)

Long-Run Costs of Production

181

(5)

Long- Run Cost Curves

181

(2)

Shifts in the Long-Run Average Cost Curve

183

(1)

Long-Run Cost Minimization and the Indivisibility of Filed Inputs

184

(2)

Neoclassical Cost Theory and the Production of Medical Services

186

(1)

Summary

186

(1)

Review Questions and Problems

187

(1)

Online Resources

188

(1)

References

188

(1)

CESS Questions

189

(2)

CHAPTER 8 Structure, Conduct, Performance, and Market Analysis

191

(32)

Structure, Conduct, and Performance Paradigm

192

(3)

Is a Perfectly Competitive Market Relevant to Medical Care?

195

(1)

A Model of Supply and Demand

196

(5)

Comparative Static Analysis

198

(2)

A Note on Long-Run Entry and Exit in a Perfectly Competitive Market

200

(1)

Insight 8-1: Explaining Rising Health Care Costs

201

(1)

The Monopoly Model of Market Behavior and Performance

202

(3)

Monopoly versus Perfect Competition

203

(2)

Insight 8-2: Huge Market Share Today; Nearly Gone Tomorrow

205

(2)

Barriers to Entry

206

(1)

Insight 8-3: CON Laws as an Entry Barrier into the Dialysis Industry

207

(1)

Monopolistic Competition and Product Differentiation

208

(4)

Procompetitive and Anticompetitive Aspects of Product Differentiation

209

(3)

Insight 8-4: The Effect of Increased Competition on Dental Prices in New Zealand

212

(1)

Oligopoly

212

(3)

Collusive Oligopoly

213

(1)

Competitive or Collusive Oligopoly?

214

(1)

Insight 8-5: Price War in the Blood Banking Industry

215

(1)

Summary

216

(1)

Review Questions and Problems

217

(2)

Online Resources

219

(1)

References

219

(1)

CESS Questions

220

(3)

Part 2 THE ROLE OF GOVERNMENT

223

(68)

CHAPTER 9 Government, Health, and Medical Care

225

(38)

Reasons for Government Intervention

226

(2)

Insight 9-1: Special Interest Group Antilegislation

228

(1)

Types of Government Intervention

229

(11)

Public Goods

230

(1)

Externalities

230

(10)

Insight 9-2: Alcohol Commercial Bans and Alcohol Abuse: An International Perspective

240

(3)

Regulations

241

(2)

Insight 9-3: The Cost of Waiting for Hospital Services in Canada

243

(2)

Insight 9-4: The Regulated Market for Human Organs

245

(8)

Antitrust Laws

248

(4)

Public Enterprise

252

(1)

Insight 9-5: Antitrust Shows Its Teeth

253

(4)

The Redistribution Function of Government

254

(3)

Insight 9-6: Who Pays for Medical Services in the United States?

257

(1)

Summary

258

(1)

Review Questions and Problems

258

(1)

Online Resources

259

(1)

References

259

(2)

CESS Questions

261

(2)

CHAPTER 10 Government as Health Insurer

263

(28)

Why Does the Government Produce Health Insurance?

264

(1)

The Medicaid Program

265

(3)

The Financing and Cost of Medicaid

266

(1)

The State Children's Health Insurance Program

267

(1)

Insight 10-1: Interstate Differences in Medicaid Fees

268

(1)

Insight 10-2: Are the Recent Expansions in Medicaid Crowding Out Private Insurance?

269

(2)

Do Differences in the Medicaid Program Make a Difference?

269

(2)

The Medicare Program

271

(10)

The Financing and Cost of Medicare

271

(3)

Medicare Program Reforms

274

(7)

Insight 10-3: Advertising of MCOs-Information or Persuasion?

281

(4)

Insight 10-4: A Synopsis of the Medicare Payment Schemes

285

(1)

Summary

286

(1)

Review Questions and Problems

286

(1)

Online Resources

287

(1)

References

287

(2)

CESS Questions

289

(2)

Part 3 INDUSTRY STUDIES

291

(232)

CHAPTER 11 The Private Health Insurance Industry

293

(40)

A Brief History of the Private Health Insurance Industry

294

(1)

The Structure of the Private Health Insurance Industry

295

(4)

Number, Types, and Size Distribution of Health Insurers

295

(1)

Barriers to Entry

296

(2)

Consumer Information

298

(1)

The Conduct of the Private Health Insurance Industry

299

(5)

The Dominant Insurer Pricing Model

299

(3)

Other Issues Relating to the Pricing of Health Insurance

302

(2)

Insight 11-1: Tracing the Profitability Cycle of Health Insurance

304

(7)

Managed-Care Organizations and Insurance Premiums

305

(2)

Do HMOs Possess Monopsony Power?

307

(2)

Cherry-Picking Behavior and Benefit Denial

309

(2)

Adverse Selection and Community versus Experience Rating

311

(1)

Insight 11-2: Adoption of Health Insurance Reform in New York State

311

(2)

The Performance of the Private Health Insurance Industry

313

(6)

Output of Private Health Insurers

313

(6)

Insight 11-3: Who Pays for Employer-Mandated Health Insurance?

319

(6)

The Price of Private Health Insurance

323

(2)

Insight 11-4: hews of Adverse Selection and Cherry-Picking Behavior in Australia

325

(1)

Summary

326

(201)

Review Questions and Problems

527

Online Resources

328

(1)

References

328

(3)

CEBS Questions

331

(2)

CHAPTER 12 The Physician Services industry

333

(42)

The Structure of the Physician Services Industry

334

(3)

The Number of Physicians in the United States

334

(1)

Distribution of Primary Care and Specialty Care Physicians in the United States

335

(2)

Insight 12-1: The Relative Supply of Physicians for Select OECD Countries

337

(2)

Mode of Practice

338

(1)

Insight 12-2: The Geographical Distribution of Physicians

339

(7)

Buyers of Physician Services and Methods of Remuneration

339

(1)

Reimbursement Practices of Managed-Care Foyers of Physician Services

340

(1)

Barriers to Entry

341

(2)

Production, Costs, and Economies of Scale

343

(2)

Summary of the Structure of the Market for Physician Services

345

(1)

The Conduct of the Physician Services Industry

346

The Supplier-Induced Demand Hypothesis

346

Insight 12-3: Physician Behavior and the Supplier-Induced Demand Theory: Evidence from Japan and the United States

343

(13)

McGuire's Quantity Setting Model

349

(7)

Insight 12-4: Price Discrimination and Physician Pricing Behavior Prior to the Mid-1950's

356

(2)

The Impact of Alternative Compensation Schemes on Physician Behavior

352

(3)

Geographical Variations in the Utilization of Physician Services

355

(2)

The Impact of Utilization Review on the Physician Services Market

357

(1)

Insight 12-5: Does It Pay Physicians to Advertise?

358

(5)

Medical Malpractice and Defensive Medicine

361

(2)

The Performance of the Physician Services Industry

363

(2)

Expenditures on Physician Services

363

(1)

The Physician Services Price Inflation Rote

363

(2)

Insight 12-6: The Economics of Hospital Admitting Privileges

365

(1)

The Utilization of Physician Services

366

(1)

Physician Income

366

(1)

Summary

367

Review Questions and Problems

363

(6)

Online Resources

369

(1)

References

369

(7)

CESS Questions

376

CHAPTER 13 The Hospital Services industry

375

(59)

The Structure of the Hospital Services industry

376

(9)

Number, Types, and Size Distribution of U.S. hospitals

376

(1)

Defining the Relevant Product and Geographical Markets for hospital Services

377

(2)

Measuring Market Concentration

379

(1)

Barriers to Entry

380

(4)

Number, Types, and Size Distribution of the Buyers of Hospital Services

384

(1)

Insight 13-1: The Difficulty of Balancing the Benefits and Costs of Hospital Mergers

385

(3)

Type of Product

388

(1)

Consumer (Mis)Information

388

(1)

Insight 13-2: Informed Choices and Financial Incentives

389

(2)

Summary of the Structure of the Hospital Services Industry

390

(1)

The Conduct of the Hospital Services Industry

391

(8)

Pricing Behavior of Not-for-Profit Hospitals

391

(7)

Market Concentration and Hospital Behavior

398

(1)

Insight 13-3: Inside the Black Box of the Hospital

399

(7)

Hospital Ownership and Hospital Behavior

401

(3)

Managed-Care Buyers and Hospital Behavior

404

(2)

Insight 13-4: Drive-Through Deliveries

406

(7)

Price Regulations and Hospital Behavior

407

(1)

Integrated Delivery Systems

408

(4)

Summary of the Conduct of the Hospital Services Market

412

(1)

The Performance of the Hospital Services Industry

413

(6)

The Growth in Hospital Expenditures

413

(2)

The Hospital Services Price Inflation Rate

415

(1)

Hospital Input Usage and Utilization

416

(3)

Insight 13-5: The Relative Performance of Hospitals in the United States and Canada

419

(1)

Summary

420

(1)

Review Questions and Problems

421

(2)

Online Resources

423

(1)

References

423

(9)

CESS Questions

432

(2)

CHAPTER 14 The Pharmaceutical Industry

434

(43)

The Structure of the Pharmaceutical Industry

435

(3)

Number and Size Distribution of Sellers

435

(2)

The Buyer Side of the Pharmaceutical Market

437

(1)

Insight 14-1: Orphan Drugs and the Salami-Slicing Problem

438

(3)

Insight 14-2: What Factors Influence the Drug

Substitution Practices of Pharmacists?

441

(3)

Barriers to Entry

444

(2)

Consumer Information and the Role of the FDA

446

(2)

Insight 14-3: The Switch from Rx to OTC

448

(1)

The Structure of the Pharmaceutical Industry: A Summary

449

(1)

The Conduct of the Pharmaceutical Industry

449

(5)

Pricing Behavior

450

(3)

Promotion of Pharmaceutical Products

453

(1)

Insight 14-4: Can Physician Drug Recommendations Be Bought?

454

(7)

Product Innovation

455

(6)

The Conduct of the Pharmaceutical Industry: A Summary

461

(1)

The Performance of the Pharmaceutical Industry

461

(2)

The Relative Price Inflation Rate of Pharmaceutical Products

461

(2)

Insight 14-5: Pharmaceutical Price Differences in the United States and Canada

463

(5)

Output of New Pharmaceutical Products

464

(2)

Profits in the Pharmaceutical Industry

466

(2)

Insight 14-6: Has the United States Remained the World Leader in Pharmaceutical Innovation?

468

(2)

The Performance of the Pharmaceutical Industry: A Summary

469

(1)

Summary

470

(1)

Review Questions and Problems

471

(1)

Online Resources

472

(1)

References

472

(3)

CEES Questions

475

(2)

CHAPTER 15 The Long-Term Care Industry

477

(46)

The Structure of the Long-Term Care Services Industry

478

(2)

The Need for Long-Term Care

479

(1)

Structure of Informal Care Providers

479

(1)

Insight 15-1: A Measurement of the Need for Long-Term Care

480

(7)

Structure of the Nursing Home Care Industry

451

(4)

Structure of the home Health Care and hospice Industry

455

(32)

The Structure of the Long-Term Care Industry: A Summary

487

(1)

The Conduct of the Long-Term Care Industry

487

(4)

The Dual Market Model of Nursing Home Pricing

487

(3)

The Effect of Alternative Payment Methods

490

(1)

Insight 15-2: The RUG III Classification System

491

(10)

Scale Economies with Respect to Quality

493

(1)

Ownership and Conduct

494

(3)

Market Concentration and Nursing Home Conduct

497

(3)

Conduct of the Long-Term Care Industry: A Summary

500

(1)

The Performance of the Long-Term Care Industry

501

(1)

Insight 15-3: Is There an Excess Demand for Nursing Home Care?

502

(13)

Expenditures on Long-Term Care

503

(1)

Formal Expenditures on Long-Tern Care

504

(2)

Private Insurance for Long-Term Care

506

(3)

Prices for Nursing home Services

509

(1)

The Utilization of Long-Term Care Facilities

510

(3)

What Do the Demographics Tell Us About the Future of Long-Term Care?

513

(2)

Insight 15-4: Long-Term Care in Germany

515

(2)

Summary

517

(1)

Review Questions and Problems

518

(1)

Online Resources

519

(1)

References

519

(4)

Part 4 HEALTH CARE REFORM

523

(33)

CHAPTER 16 Health Care Reform

525

(31)

The Performance of the U.S. Health Care System: A Summary and an International Comparison

526

(8)

Summarizing the Structure, Conduct, and Performance of the Various Medical Care Markets

526

(5)

The U.S. health Care Economy: All International Comparison

531

(3)

An Overview of Health Care Reform in the United States

534

(1)

Health Care Reform at the Federal Level

535

(1)

Insight 16-1: The Federal Employees Health Benefits Program

536

(1)

Medical Savings Accounts

537

(6)

Individual inundates

540

(1)

Managed Competition

541

(1)

National health Insurance

542

(1)

Attempts at State Health Care: Successes and Failures

543

(1)

Insight 16-2: Medical Savings Accounts-The Case of Singapore

544

(5)

Hawaii: The Case of Employer Mandates

545

(1)

Maryland: The Case of Regulation

545

(1)

Minnesota: The Case of Regulated Competition

546

(1)

Oregon: The Case of Rationing Medicaid Services

547

(1)

What Can Be Gained from State Attempts at Health Care Reform?

548

(1)

Insight 16-3: How Much Health Care Is Tax-Financed in the United States

549

(1)

An Overview of the Clinton Health Care Plan

550

(2)

The Collapse of the Clinton Health Care Plan

551

(1)

Summary

552

(1)

Review Questions and Problems

553

(1)

Online Resources

554

(1)

References

554

(2)

Glossary

556

(13)

Name Index

569

(7)

Subject Index

576

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Health Economics Theories, Insights, and Industry Studies with Economic Applications Card

Summary

Table of Contents

Supplemental Materials