Summary: Economics And Financing Of Health Care Systems

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• 1 Lecture 1: is health care really different?

• 1.1.4 Baumol's 'cost disease'

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• What is Baumol's 'cost disease'?

  Health care becomes increasingly more expensive relative to products of other sectors of the economy

• Baumol's 'cost disease' makes healthcare expensive, why? (2x)

  1. The increase in wages cannot be earned back because the productivity of workers can hardly increase. This makes it incredibly expensive.
  2. Demand for healthcare is unlikely to decline.

• Policy makers have to make difficult choices between two evils. Which two evils?

  1. Unwise government intervention / interference.
  2. Full transfer to the market of private sector with all of its pitfalls.

• 1.1.5 Is health spending growth sustainable?

• How can increased health spending harm the economy?

  Taxes and / or premiums go up --> increasing labour costs --> a decrease in the competitiveness on the healthcare market.

• What are the effects of increased healthcare spending?

  It may crowd out other public services.
  

  • E.g. Education, police, infrastructure and transportation. 

• What is financial sustainability and how can we pay for the growth?

  Financial sustainability is about how to 'pay' for the spending growth. This is possible through higher cross-subsidies to guarantee universal access.

• What is economic sustainability?

  The importance of 'value for money'.

• 1.2.1 Right or Privilege?

• What are the three main aspects of the WHO constitution of 1948?

  1. All people can use the services they need
     
  2. The services need to be of sufficient quality
  3. The services may not expose the user to financial hardship

• Is Healthcare a right or a privilege?

  Healtcare has been declared a fundamentel human right by the WHO in 1948. The right to healthcare is emobied in many countries institutions

• 1.3.1 Healthcare: not a regular economic good!

• Why is healthcare not a regular economic good?

  1. We trust our health to the physicians. So, they have a job that requires a lot of trust. 
  2. We shouldn't give physicians an incentive to provide unneeded / irresponsible care
  3. it tries to overcome the non-marketability of information