ECON101 Lecture Notes - Lecture 13: Normal Good, Community Rating, Adverse Selection
16 Feb 2017
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Document Summary
Some key micro concepts in health: scarcity- limited amounts of resources, economic perspective- having to make choices, rationing, how to determine who gets health care services. Rationing: various aspects of supply demand, changes in demand. Efficiency (inefficiency: price elasticity of demand, market structure: pure competition, monopoly, potential anti trust situations, etc. Fundamental facts of health economics: the distribution of spending is extremely skewed, top 1% of the population spends 21, top 5% of the population spends 50, bottom 50% of the population spends 2. 8% Keep in mind that health care can be expensive! Variations may occur by age, sex, and other risk factors. These are often considered prior to the use of medical services: community rating: basing health insurance premiums on the health care utilization experience of the entire population of a specific geographical area. Premiums are the same for all individuals regardless of ag, sex, risk, or prior use of health care services.
