01:920:210 Lecture Notes - Lecture 21: Capitation Fee, Health Maintenance Organization, Betting In Poker
Document Summary
Implicit rationing- docs make decisions about who gets the care: explicit rationing- third-party namely insurance companies make the decisions about who gets care. **assumes free market automatically regulates supply and demand. Free market does not work in medical care though. Those with most need have the money is also assumed but is not true. Tend to be the poorest, who have the biggest need for medical care. Ffs escalates costs: docs are reimbursed for each separate procedure in an incentive to send in more bills (more profit), encourages unnecessary diagnostics and therefore more costs, no controls over costs, treatments, and claims. Ffs has broken down: middle-class and lower class people cannot pay their own medical bills, doc-patient interaction, docs is an entrepreneur who has to keep patients happy, develop bed-side manners. Solicitors of their patients, spend time with them, and they like that (satisfied), but they are billed for their time- win win situation.