23 - 1 Copyright McGraw-Hill/Irwin, 2005 The Health Care Ind ustry Quality of Care Limited Access Increasing Demand f or Health Care Role of Health Insu rance Insurance and the O verallocation of Re sources to Health C are Supply Factors in R ising Health Care P rices Cost Containment: A ltering Incentives Recent Laws & Propo sals Key Terms Previo us Slide Next Slid e End End Show Show THE ECONOMICS OF HEALTH CARE 23 C H A P T E R
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23 - 1 Copyright McGraw-Hill/Irwin, 2005 The Health Care Industry Quality of Care Limited Access Increasing Demand for Health Care Role of Health Insurance.
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23 - 1Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care
Supply Factors in Rising Health Care Prices
Cost Containment: Altering Incentives
Recent Laws & Proposals
Key Terms
PreviousSlide
NextSlide
EndEndShowShow
THE ECONOMICS OFHEALTH CARE
23C H A P T E R
23 - 2Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care
Supply Factors in Rising Health Care Prices
Cost Containment: Altering Incentives
Recent Laws & Proposals
Key Terms
PreviousSlide
NextSlide
EndEndShowShow
THE HEALTH CARE INDUSTRY
Twin Problems: Costs and Access
Total Spending on Health Care
Deductibles - Copayments
Medicare - Medicaid
Percentage of GDP
International Comparisons
High & Rising Health Care Costs
23 - 3Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care
Supply Factors in Rising Health Care Prices
Cost Containment: Altering Incentives
Recent Laws & Proposals
Key Terms
PreviousSlide
NextSlide
EndEndShowShow
THE HEALTH CARE INDUSTRY
Health Care Expenses & Finance
Nursing Homes7%
Prescription Drugs6%
ProgramAdministration
6%
Doctors22%Dental, Vision,
Miscellaneous22%
Hospitals33%
23 - 4Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care
Supply Factors in Rising Health Care Prices
Cost Containment: Altering Incentives
Recent Laws & Proposals
Key Terms
PreviousSlide
NextSlide
EndEndShowShow
THE HEALTH CARE INDUSTRY
Health Care Expenses & FinanceMedicaid
15%
Medicare19%
Military andOther Public
Insurance9%Other Private
Expenditures
Copayments,Deductibles, Etc.
22%
Private HealthInsurance
33%
23 - 5Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care
Supply Factors in Rising Health Care Prices
Cost Containment: Altering Incentives
Recent Laws & Proposals
Key Terms
PreviousSlide
NextSlide
EndEndShowShow
0 5 10 15
United StatesSwitzerland
GermanyFrance
CanadaAustralia
ItalyJapan
United KingdomMexico
GLOBAL PERSPECTIVEHealth Care Spending as a Percentage ofGDP, Selected Nations
Source: Organization for Economic Cooperation and Development
23 - 6Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care
Supply Factors in Rising Health Care Prices
Cost Containment: Altering Incentives
Recent Laws & Proposals
Key Terms
PreviousSlide
NextSlide
EndEndShowShow
Economic Implications of Rising Costs
Reduced Access to CareLabor Market Effects
Slower Wage GrowthUse of Part-time & Temporary
WorkersImpact on Government Budgets
The basic problem...
QUALITY OF CAREAre We Healthier?
23 - 7Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care
Supply Factors in Rising Health Care Prices
Cost Containment: Altering Incentives
Recent Laws & Proposals
Key Terms
PreviousSlide
NextSlide
EndEndShowShow
LIMITED ACCESS
Why the Rapid Cost Increases?Peculiarities of the Health Care
MarketEthical and Equity ConsiderationsAsymmetric InformationSpillover BenefitsThird-Party Payments:
Insurance
The Uninsured:15% of Population
23 - 8Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care
Supply Factors in Rising Health Care Prices
Cost Containment: Altering Incentives
Recent Laws & Proposals
Key Terms
PreviousSlide
NextSlide
EndEndShowShow
INCREASING DEMANDFOR HEALTH CARE
Rising Incomes: Role of Elasticities
An Aging PopulationUnhealthy LifestylesThe Role of Doctors
Organizations (HMOs)Medicare and DRGDiagnosis-Related-Group
(DRG)
23 - 15Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care
Supply Factors in Rising Health Care Prices
Cost Containment: Altering Incentives
Recent Laws & Proposals
Key Terms
PreviousSlide
NextSlide
EndEndShowShow
RECENT LAWS & PROPOSALSPortability and
AccountabilityMedical Savings AccountsPatients’ Bill of RightsLimits on Malpractice
AwardsPrescription Drug CoverageMedicare Reform
deductiblescopaymentsfee for servicedefensive medicinetax subsidy“play or pay”national health insurance (NHI)preferred provider organizations (PPOs)health maintenance organizations
(HMOs) diagnosis-related-group (DRG) system
ENDBACKCopyright McGraw-Hill/Irwin, 2005
23 - 17Copyright McGraw-Hill/Irwin, 2005
The Health Care Industry
Quality of Care
Limited Access
Increasing Demand for Health Care
Role of Health Insurance
Insurance and the Overallocation of Resources to Health Care