ECON 440 Lecture Notes - Lecture 25: Health System, Choosing Wisely, Allocative Efficiency
Health care system goals and challenges
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Why do we/should we ration?
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How do we ration? What tools are available?
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Why is it so difficult?
•
What would you do?
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Outline
Universal and equitable access to reasonable health
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Maintain healthcare costs at an affordable level
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Use resources efficiently and effectively
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Health Care System Goals
Ensuring access to health care services
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Providing high-quality, timely care that meets patients' needs
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Improving the health of populations
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Controlling the level of, and growth in, health care costs
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Achieving equity in access, process and outcomes
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Health Care Challenges (Canada, the US, other OECD)
Is health a right?
i.
Is health care a right?
ii.
Is ALL health care a right?
iii.
Normative questions:
a.
Is patient demand for health care "sacred"?
i.
Are physicians acting as good agents?
ii.
Economic incentive questions:
b.
What's the Marginal Benefit of $1 spent on health vs in other sectors?
i.
Allocative efficiency question:
c.
What proportion of total resources will we spend on health care?
1.
Three Fundamental Policy Questions
In the absence of using price to allocate goods and services, administrative rules prevent people
from consuming something they can afford
○
Rationing is the planned and restrictive allocation of scarce resources
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We have to if we're willing or able to spend only some limited amount on health care - effective fiscal
constraint
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If the marginal benefit of a dollar spent on health care is less than the marginal benefit of something
else
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Allocative efficiency may require it
•
Necessary if we think quantity or types of health care consumed is greater/different than socially optimal
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Why Ration?
Attempt to solve informational problem
▪
Campaign to help clinicians and patients learn about unnecessary tests/treatments ---> purpose of
making "smart and effective" choices to ensure high quality care
○
Choosing Wisely Canada (CWC)
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Efforts at Rationing in Canada
Among diseases
○
Among programs
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Among regions
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Is price an appropriate signal to patients?
▪
How: price? Or something else?
○
How, and by whom, will scare health care resources be allocated?
•
Three Fundamental Policy Questions
Lecture 25 - Rationing Care
Monday, April 16, 2018
1:48 PM
ECON 440 Page 1