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29 Jul 2019

1. Discuss the link between equality, economic growth, and stability

2. In the health care market there is the problem of adverse selection. Explain the concept of adverse selection and how it is at the core of lack of coverage for the least healthy and the poor by unregulated private market for individual insurance. Then discuss how government can solve this problem by looking at European experience and the Affordable Care Act in U.S

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Nestor RutherfordLv2

30 Jul 2019

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Related questions

True of False

Bill is an aging snowboard instructor at a local ski resort. All winter, he takes over the counter pain medication to deal with his aching joints. Each summer, he moves home with his parents and takes a part time job making minimum wage. This summer, he got qualified for and enrolled into state government subsidized health insurance. Now he plans to undergo arthroscopic surgery by the end of the summer to repair his knee. Though this is an economically rational decision for Bill, it represents a welfare loss to society as a whole.

Catastrophic medical expenses are large, infrequent and unpredictable. Risk aversion explains why people buy insurance which covers such catastrophic events.

The primary funding source for the expenses of current Medicare beneficiaries is the fund current beneficiaries contributed to throughout their lifetime.

Many useful medical technologies become wasteful when they are expanded to include low-risk individuals.

A problem with Cost-Benefit Analysis is that

a) scientists observe peopleâs behavior to calculate how much individuals are willing to pay for a particular treatment.

b) opportunity cost is measured as the value of the next best alternative foregone.

c) the perspective of the one benefitting from the medical service must be included.

d) sometimes subtle distinctions in the alternatives considered as opportunity costs may overstate the benefits of a treatment.

e) the use of expected values employs the statistical law of large numbers and this is not acceptable for individual decision making analysis.

Which of the following is an example of adverse selection in the private health insurance market?

a) Consumers regularly engaging in bungee jumping but being able to hide it from their insurer, who developed premiums based on the average utilization rates of that large group in the past.

b) Consumers anticipating regular (twice a year) visits to the dentist for preventive care but being able to hide it from their insurer, who developed premiums based on the average utilization rates of that large group in the past.

c) Young and healthy consumers having access to multiple plans offered by the employer (from low-priced HMO and high-deductible plans to higher-priced PPO) and ultimately choosing the most comprehensive PPO plan.

d) Elderly people enrolling in Medicare.

e) Poor family enrolling their chronically ill children in Medicaid.


(Please Summerize the work down below, thank you)

Political	Economic
Growing political influences on healthcare advances	Cost of living increases
Global government influence on healthcare cost	Cost of insurance prices
Government control of Medicaid, Medicare funding	Rise of forecasted interest rates
Social/Cultural	Technical or Technology
Increase average age of population	Demand on new medical treatments
Patient expectations increase	Customize treatments
Demographics are in constant change	More advance service facilities
Environmental	Legal
Growing need for green business	Constant change of government drug Regulations
Environmental agenda and community awareness	Consumer laws
	Health and safety regulations



Porters 5 forces of business model

Competitive Rivalry
Growth opportunity for healthcare companies are expected to growing the next few years
Increase in new revolutionary drugs both in and outside of the US

Threat if New Entrants
Strict government regulations
Difficult to keep up due to constant change
Huge startup cost

Substitute Products
Threat of other substituting product and service at lower cost



Bargaining Power of Customers
Generic drugs offered at large discount to consumer
Larger less customized healthcare facility with lower housing costs
Several facilities offering similar services.

Bargaining power of supplier
Medical suppliers have a large pricing power
Bargaining power of physicians and nurses is huge because of large hospital benefits

Swot Analysis

Strengths

Highly trained and capable employees

Market experience

Strong leadership

High level of organizational efficiency

Excellent facilities

Strong commitment to bettering the community

Weaknesses

Increased cost of healthcare could lower our clientele

Limited staff resources

Limited cash flow to hire and train new employees

Lack of resources

Opportunities

Fast growing technology opens new doors for using state of the art equipment to better serve the patients.

Nursing and residential care is one of the fastest growing industries

Aging population

Threats

Uncertainty in political and economic climate causes hesitation for receiving new patients.

Funding constraints

Highly competitive market

Product or Service Analysis

Our services will be used by patients who cannot afford experimental treatments and patients who have been abandoned by the system because hospitals can no longer provide medical assistance. At our facility, we will be able to work with the families and provide them with different payments options, such as low monthly payment plans. Our main goal is to be able to treat the patient at a very affordable cost; however, if any patient does not possess the means to pay for treatment, he or she would not be turned away; our facility will tap into government and private funding to cover treatment cost.

The beauty of this service is that there isnât a charge of any kind to take part in our program because it is completely funded by government grants. Individuals that would take part would more than likely not have the means to pay a monthly deductible. Due to the nature of the business listed as a non-profit agency, there is no way to make a profit of any kind, as it would jeopardize the business in its entirety.

Some of the market factors that create a demand for our services include the need of medical care after having maximized all resources, the number of low income families, and the number of patients facing health issues needed extended medical care.

Opportunities that may derive from this business is the opportunity to expand and open multiple facilities, while extending a helping hand to many more in need. The risk, however, is the unstable funds deriving from grants. This can pose a huge treat to the business, as grants often times come and go and cannot be counted on as a constant income.

After studying the healthcare system and current policies in place, data shows many individuals facing severe health issues usually go untreated and uncared for due to the outrageous cost of medical care. It is devastating to see how often people, especially the elderly, are sent home and forgotten for the mere reason that hospitals and doctors are not willing to care for patients without financial means. In fact, in 2009 Harvard news reported 45,000 annual deaths due to lack of health coverage in the U.S. alone, which is significantly higher than the 18,000 reported by USA Today in 2002.

Financial Analysis

Clermont will be a nonprofit organization, dedicated to help the most needed. To open the facility fully operational we must take in consideration some fixed expenses like the land acquisition, permits, interest, brokers, administration fees, professionals (facility setup), staff, reports (environmental, occupational, fire, FDA), electricity, water, phone, water & sewer , connections, taxes, insurance, management, security, advertising, accountants, food, lawn mowers, bank fees, etc.

The facility will need have a total value of approximately three million dollars, but if we break the price of the land acquisition in to a thirty (30) year mortgage we can star up the business with an investment of approximately $ 233,944.61 USD to cover the first month of operation including all the startup permits and connections. After the first month the fixed expenses will be $184,444.00 USD with the exception of the months were taxes are due; taxes are around $ 43,000.00 USD paid quarterly will increase the tax month (depending on the facility fiscal year) for $ 10,750.00 USD approximately. We will fund all the costs with private and public funding, fundraiser, events, raffles, and most important with the help of the community.

As we mentioned before, Clermont is a nonprofit organization and we will do everything in our power to give the relief to the families in need. No one will be rejected because they do not have the money or the insurance cannot help. No money will be required from patient and every single dollar received will be spent in the patients, and in improving our facility and our service every day.

We believe our financial even breaking point will be a year after we begin operations, and be profitable soon after. There are many patients in need, and with the government and public grants each person will receive the treatment they need, and we will become the hope of many.

Health Economics and Financing

True or False

16. Of the 1,750 students expected to graduate with an M.D. from U.S. medical schools this year, the average debt per student will exceed $100,000.

18. The idea that hospital competition has led to a medical arms race can help explain why the U.S. has more than twice the OECD average number of MRI machines per 1,000,000 population.

Multiple Choice

29. patient cost-sharing is now a permanent feature in almost all health insurance contracts. The insurers introduce patient cost-sharing to

reduce adverse selection.

reduce risk aversion.

reduce consumer demand.

increase consumers' medication compliance.

use those funds to guarantee full coverage of catastrophic events.

36.One of the best ways to learn how the complicated healthcare system in the U.S. works is to

examine the legal basis of the provision of healthcare in the U.S.

follow the trail of money and trace the self-interest of all the parties involved.

understand how the goal of serving public interests drives the actions of all the parties involved.

carefully read and analyze healthcare-related reports and arguments in news media.

stay up-to-date with the latest medical research findings.

40.Since the implementation of hospital payment by the DRG system

cost-shifting no longer occurs in hospitals.

use of RCCAC serves no purpose to the hospital's management.

payment for hospital stays is based on a patient's diagnosis at discharge.

payment for hospital stays is based on a patient's diagnosis upon admittance to the hospital.

payment for hospital stays is less profitable for hospitals.

41.Over half of all hospital revenues are from

federal and state government programs.

private insurance.

Medicare.

Medicaid.

philanthropy.

42. If it is shown that a newly formed large hospital, which was formed by the merger of two competing hospitals, charges more to uninsured patients than do smaller hospitals in the same market, for providing the same services,

a) the large hospital may have the market power to do so.

b) the two small hospitals must be taking advantage of the economies of scale.

c) it is an example of price discrimination.

d) consumersâ welfare would not be affected.

e) the large hospital must be violating the antitrust laws.

43. A proposal to eliminate the tax deduction for charitable contributions would harm

a) physicians' salaries.

b) the number of patients paying out of pocket for cosmetic surgery.

c) the number of self-pay hospital patients.

d) hospitals budget for philanthropic donations.

e) a nurse's duties.