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GH Frameworks- Social Sciences
Economic Determinants (T Pierce)
19
Health Care
Graduate
10/26/2010

Additional Health Care Flashcards

 


 

Cards

Term
What can economics add to the study of health
Definition
  • behavioral science
  • develop models that can
    • predict/explain behavioral patterns
    • can be tested with data or experimentation
  • underlying assumptions- actors are rational
    • firms seek to maximize profit
    • people want to maximize utility
Term
define economics
Definition
  • study of decisions in the face of constraints
    • how do firms make decisions given market conditions
    • how do people make decisions given limited resources
  • has predictive nature- given change in constraints, how will people respond
Term
opportunity costs
Definition
  • value of forgone benefit which could be obtained from a resource in its next best alternative use
    • must take into account direct and indirect costs (ex: time)
Term
marginal analysis
Definition
  • economics is about making the most efficient use of resources
  • efficiency is achieved only by producing/consuming somethin to the poin where the cost of the last unit is no greater than the benefit derived from that unit
  • need to access the relative costs and benefits of each marginal addition or reduction in production/ consumption
Term
describe discount rate
Definition
  • assumption- we value our future differently from our past
  • a parameter individuals use in estimating the present value of a commodity compared to its value at some point in the future
  • value of health gains today compared to value attached to health gains in the future
Term
Why is understanding discount rate important
Definition
  • important to understand that people value their future differently and often this changes with age, income, and education
  • particularly important in understanding risky behaviors and developing policies that take this concept into account
  • we tend to like immediate gratification and so need to take that into account
Term
describe externalities
Definition
  • definition- action of one party makes another worse/better off, yet the first party does not bear the costs or receive the benefits
    • spill over effect- when a person or group external to the transaction derives benefit or harm from the transaction
  • examples
    • positive- using a condom, deworming, school feedin program, vaccination
    • negative- second hand smoke, spread contagious disease by riding public bus, DWI and injuring another, Greenhouse gas
Term
major results of externalities
Definition
  • as costs/benefits are born by another person, there is no incentive for the individual indulging in behavior to stop
  • understanding of externalities and ability to develop models to show the impact of negative or positive externalities is a major contribution of economists
  • how can policy makers use this info to develop appropriate policies?
Term
public goods
Definition
  • defined as good that is non-rivalrous and non excludable
    • consumption by one person does not reduce the availability for consumption by others
    • theoretical construct
    • commodities such as air, environment can be considered as public goods
Term
describe elasticity
Definition
  • definition- measure of sensitivity/responsiveness
    • ex: change in demand due to change in price or income
    • income elasticity of demand
    • price elasticity of demand
  • when change in deman is greater than change in price = ELASTIC
  • when change in demand is less than change in price = INELASTIC
Term
asymmetric info
Definition
  • one party has better access to info than the other
    • esp. true in health care
    • doctor knows how to treat condition although patient may not
    • patients know their health state beater than insurance company (ex: adverse selection, moral hazard are implications of asymmetric info)
Term
define adverse selection
Definition
subpopulation taking out insurance is likely to have less favorable characteristics than population in general
Term
moral hazards
Definition

situation where consumers do not bear the direct costs of services and so are encouraged to behave in a way which increases those services

Term
supply induced demand
Definition

amount of demand created by doctors, which exists beyond what would have occurred in the market in which consumers are fully informed

Term
economic growth effect on health
Definition
  • improve capacity to purchase food
  • adequate sanitation, housing
  • increase access to education
  • better access to health care info
  • increase access to health care and health technology
Term
effect of poverty on health systems
Definition
  • high health expenditures can preclude treatment or pose a major financial burden
    • especially if individuals have to bear total burden of the costs
  • social risk management schemes mostly target the better off leaving poor most vulnerable
  • imperfect market and thus role of governments to intervene and provide health
Term
how does health contribute to greater income
Definition
  • directly- higher productivity of workers
  • indirectly
    • increase learning, education
    • spillover effects of greater savings and investment
    • demographic shift
    • health financing policies have an impact on economic performance
Term
GDP
Definition
sum of consumption, investement, government spendin, and net exports
Term
Describe what is ment by welfare gains through risk pooling
Definition
  • uncertainty exists in terms of adverse health shocks and when they occur- how do you prepare
    • people shed risk by purchasing insurance
    • much of the structure of health care sector driven by the nature of insurance
    • insurance also alters peoples behavior
  • risk pooling reduces impact of an adverse health shock
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