Economics of Health Care Financing, Second

This new edition examines the economics of health care systems in a non-technical manner, highly accessible for economists and non-economists alike. It is very timely and includes the latest evidence of health care reforms and their implications from a number of countries with different systems.

Cam Donalson is Health Foundation Chair in Health Economics and ESRC Advanced Institute of Management Research (AIM) Public Service Fellow, Centre for Health Services Research, School of Population & Health Sciences and Business School (Economics), University of Newcastle upon Tyne.

Karen Gerard is Senior Lecturer University of Southampton and Senior Visiting Fellow, Health Economics Research Centre, Institute of Health Sciences, University of Oxford.

Craig Mitton is a Research Scientist in the Centre for Healthcare Innovation and Improvement in the British Columbia Research Institute for Children's and Women's Health and Assistant Professor, University of British Columbia.

Stephen Jan is Lecturer, London School of Hygiene and Tropical Medicine.

Virginia Wiseman is Lecturer, London School of Hygiene and Tropical Medicine.

List of figures and tables

vi

Notes on authors

viii

Acknowledgements

x

I MARKETS AND MARKET FAILURE IN HEALTH CARE

1

(52)

1 Health Care Financing Reforms: Moving into the New Millenium

3

(12)

Introduction

3

(1)

The changing world of health care financing

4

(8)

Outline of the book

12

(3)

2 Markets and Health Care: Introducing the Invisible Hand

15

(14)

Introduction

15

(1)

What is a market and how does it work?

16

(7)

Markets: the panacea for health care ills?

23

(1)

The crucial assumptions

24

(3)

Consumer is sovereign?

27

(1)

Conclusions

28

(1)

3 Market Failure In Health Care: Justifying the Visible Hand

29

(24)

Introduction

29

(2)

Market failure and the UK NHS: Williams' tale of the duck-billed platypus

31

(1)

Risk, uncertainty and the failure of voluntary health care insurance

32

(9)

Externalities

41

(2)

Licensure and asymmetry of information

43

(4)

Relevance of economics to government intervention

47

(3)

Conclusions

50

(3)

II HEALTH CARE SYSTEMS AND THEIR OBJECTIVES

53

(36)

4 Methods of Funding Health Care

55

(18)

Introduction

55

(2)

Public/private mix in finance and provision

57

(1)

Rewarding the providers

58

(2)

Private health care insurance

60

(4)

Direct tax system

64

(3)

Public health care insurance

67

(2)

Other financing mechanisms

69

(1)

Conclusions

70

(3)

5 ECONOMIC OBJECTIVES OF HEALTH CARE

73

(16)

Introduction

73

(1)

Efficiency

73

(3)

Equity

76

(1)

Confronting the confusion: what do we mean by equity?

77

(8)

The economics and philosophy interface - theories of equity

85

(1)

Towards some operational equity goals

86

(1)

Interaction between equity and efficiency

87

(1)

Conclusions

88

(1)

III A REVIEW OF EMPIRICAL FINDINGS

89

(110)

6 Countering Consumer Moral Hazard

91

(25)

Introduction

91

(1)

Policy responses to consumer moral hazard

92

(1)

Evidence on countering consumer moral hazard

93

(21)

Conclusions

114

(2)

7 Countering Doctor Moral Hazard

116

(27)

Introduction

116

(1)

Methods of paying doctors

117

(1)

Fee for service: does supplier inducement really exist?

118

(7)

Alternatives to fee for service

125

(16)

Conclusions

141

(2)

8 Countering Moral Hazard in the Hospital Sector

143

(28)

Introduction

143

(1)

Theoretical perspectives

144

(3)

Methods of reimbursing hospitals: a case of minding our Ps and Qs?

147

(5)

Empirical evidence on reimbursing hospitals

152

(13)

Does ownership make a difference?

165

(2)

Towards a solution: back to budgeting?

167

(2)

Conclusions

169

(2)

9 Achieving Equity

171

(28)

Introduction

171

(1)

The role of government in health care financing

172

Evidence on vertical equity

171

(9)

Evidence on equity as access

180

(15)

Conclusions

195

(4)

IV FUTURE CHALLENGES

199

(29)

10 Future Considerations: Setting the Health Care Budget

201

(18)

Introduction

201

(1)

What are the determinants of total health care spending?

202

(6)

What is the appropriate level of spending?

208

(3)

Moving forward: from QALY league tables to programme budgeting and marginal analysis

211

(3)

Social determinants of health

214

(4)

Conclusions

218

(1)

11 Health Care Financing Reforms: Where Now for the Visible Hand?

219

(9)

Introduction

219

(1)

The contribution of economic theory

220

(1)

Empirical findings - how health services should be financed

221

(5)

Determining the size of the budget

226

(1)

Conclusions

226

(2)

Notes

228

(4)

References

232

(40)

Index

272

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Economics of Health Care Financing, Second Edition The Visible Hand

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Author Biography

Table of Contents

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