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University of Toronto Scarborough
International Development Studies
Anne- Emanuelle Birn

Lecture 8- C h 11- Health E conomicsandtheE conomicsof Health November-02-10 1:15PM Whyhealth economics?p. 537 - Spendingissoaring- why? - Needto maximizevaluefor spending(efficiency): better outcome at sameor lower cost - Healtheconomicsisdrivinghealtharepolicyand health system planning - Remember that factorsthat lieoutsideof healthcare serviceand systems,includingincome, education, housing,water and sanitation, social security systems,nutrition andtransports - Low cost interventionsfor developingcountries(neoclasical approaches) - Comprehensive,primarycare- oriented redistributivesystems(social justice approach) - Ideallyhealtheconomicsassessesfairnessand equityin context of local culture, historyand politics Keyquestions: p. 540 - What istherelationshipbtw health andtheeconomy? - What aretheunderlyingassumptionsof markets? - How doeshealth differ fromother goodsservices? - Whyaremarketsincapableof equitablyprovidinghealth services? HealthEconomic101 - Expenditures=priceXquality Neo-classical economicssays: - Pricelinkssupplywith demand - If supplyfixedand demandhigh,pricegoesup - If priceisfree: demand should go down (moral hazard: pplover useservices) - Thehealth carecurve: supplygoesup,demandgoesup, pricegoesup over time Supplyof what?Doctor?Services?Drugs? Healthcarecreateitsown demand Whythedifference?p. 542-3 1. Patientsdont control health spending(unlessall haveMunchausenssyndrome) 2. Physicianoften spending3rd party$$ 3. Somehealth spendinghasno medical benefit (unnecessaryservices, profits, corruption, malpactice premiumsetc) 4. Healthisspecial (beyond$): maybebetter not to need health care: vulnerability 5. Healthcarespendingshaped byvalues, not byrational consumers 6. Most societiesdeemhealth careto beahumanright Keyquestions544 - How aredecisionsmaderegardinghealth financing? - What istheroleof international institutionsin shapinghealthsystem financingpolicies? Meansof financinghealth care p. 545 1. Revenuesgathered by national or local governmentsthrough taxations 2. Taxbased or salarydeducted contributionsto publicinsurancesystem 3. Privatepayment to privateinsuranceschemesor out of pocket expenditureat the point of thehealth careprovision - Ultimatelyhouseholdpaysbut fairness differs: General taxation ismost progressive(fair) Mandatoryhealthinsuranceless fair, especiallyif one premiumfor all
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