ANT 373 Lecture Notes - Lecture 7: Health Maintenance Organization, Vehicle Insurance, Moral Hazard
Document Summary
Based on the concepts of random hazards. Predictions can be calculated to determine avg rates that hazards. Add % for profit and admin expense. Divide by total # of people to be insured. Particularly subject to the problem of moral hazard . Once a person is insured, a person is more likely to define a problem as an illness and is more likely to seek care. 1930s - baylor u hospital created bcbs. In attempt to prevent inflation, fed govt placed price ctrl on consumer goods, incl salaries. Fringe benefits (health insurance and retirement benefits) were excluded from price controls. Employees and unions couldn"t bargain for increased wages, but could bargain for increased fringe benefits. 54 - govt ruled that fringe benefits did not count as taxable income. If employer wanted to raise employees pay they could: Traditional means of paying for health care, under which patients sought their own source of care and were reimbursed for their costs care.
