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| Preface | |
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| Acknowledgments | |
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| About the Author | |
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| Foreword | |
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| Choices: Money, Medicine and Health | |
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| Questions | |
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| What Is Economics? | |
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| Terms of Trade | |
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| Value | |
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| Can We Pay Somebody to Care? | |
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| Financing Health Care | |
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| Full Cost: Paying For Medical Care | |
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| The Flow of Funds | |
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| Health Care Spending in the United States | |
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| Sources of Financing | |
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| Health Care Providers: The Uses of Funds | |
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| Economic Principles As Conceptual Tools | |
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| Scarcity (Budget Constraints) | |
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| Opportunity Cost | |
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| Willingness to Pay | |
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| Trade | |
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| Money Flows in a Circle | |
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| The Margin: What Matters? | |
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| Maximization: Marginal Costs and Marginal Benefits | |
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| Choice: Are Benefits Greater Than Costs? | |
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| Investment | |
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| Contracts: Complex Exchanges to Deal with Timing and Risk | |
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| Organizations Adapt and Evolve | |
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| Distribution: Who Gets What | |
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| Health Disparities | |
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| Whose Choices:� Personal, Group or Public? | |
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| Social Science and Rational Choice Theory | |
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| Suggestions for Further Reading | |
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| Summary | |
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| Problems | |
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| Endnotes | |
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| Demand and Supply | |
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| Questions | |
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| The Demand Curve | |
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| The Diamonds?Water Paradox: An Example of Marginal Analysis | |
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| Consumer Surplus: Marginal versus Average Value of Medicine | |
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| Ceteris Paribus | |
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| Individual, Firm, and Market Demand Curves | |
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| The Supply Curve | |
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| Marginal Revenue | |
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| Price Sensitivity | |
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| Price Elasticity and Marginal Revenue | |
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| Price Discrimination | |
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| Is Money the Only Price? | |
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| Inputs and Production Functions | |
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| Production Functions | |
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| Marginal Productivity | |
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| Markets: The Intersection of Demand and Supply | |
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| Need versus Demand | |
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| How Much is a Doctor Visit Worth? | |
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| The Demand for Medical Care is Derived Demand | |
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| The Demand for Health: What Makes Medical Care Different | |
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| The Determinants of Health | |
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| Efficiency | |
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| Suggestions for Further Reading | |
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| Summary�������������������������������� | |
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| Problems��� | |
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| Endnotes | |
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| Cost?benefit And Cost-Effectiveness Analysis | |
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| Questions | |
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| Cost?Benefit Analysis is About Making Choices | |
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| An Everyday Example: Knee Injury | |
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| Stepwise Choices:� Yes or No? How Much? | |
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| Calculating Marginal and Average Costs | |
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| Defining Marginal: What is the Decision? | |
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| Maximization: Finding the Optimum | |
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| Declining Marginal Benefits | |
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| Optimization: Maximum Net Benefits Expected Value | |
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| The Value of Life | |
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| Quality-Adjusted Life Years | |
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| Discounting Over Time | |
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| QALY League Tables | |
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| Perspectives: Patient, Payer, Government, Provider, Society | |
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| Distribution: Whose Costs and Whose Benefits? | |
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| CBA Is a Limited Perspective | |
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| CBA and Public Policy Decision Making | |
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| CBA Is a Limited Perspective/ | |
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| Suggestions for Further Reading | |
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| Summary | |
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| Problems | |
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| Endnotes | |
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| Health Insurance: Financing Medical Care | |
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| Questions | |
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| Methods for Covering Risks | |
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| Savings | |
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| Family and Friends | |
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| Charity | |
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| Private Market Insurance Contracts | |
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| Social Insurance | |
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| Strengths and Weaknesses of Different Forms of Risk Spreading | |
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| Insurance: Third-Party Payment | |
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| Why Third-Party Payment? | |
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| Variability | |
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| Third-Party Transactions | |
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| Who Pays? How Much? | |
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| How Are Benefits Determined? | |
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| Risk Aversion | |
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| Adverse Selection | |
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| Moral Hazard | |
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| Welfare Losses Due to Moral Hazard | |
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| Ex Ante Moral Hazard | |
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| Tax Benefits | |
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| Effects of Health Insurance on Labor Markets | |
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| History of Health Insurance | |
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| Suggestions for Further Reading | |
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| Summary | |
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| Problems | |
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| Endnotes | |
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| Insurance Contracts And Managed Care | |
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| Questions | |
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| Sources of Insurance | |
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| Employer-Based Group Health Insurance | |
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| Medicare | |
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| Medicaid | |
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| State Children?s Health Insurance Program | |
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| Other Government Programs and Charity | |
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| The Uninsured | |
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| Contracting and Payments | |
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| Risk Bearing: From Fixed Premiums to Self-Insurance | |
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| Purchasing Medical Care for Groups | |
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| Medical Loss Ratios | |
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| Claim Processing | |
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| The Underwriting Cycle | |
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| ERISA, Taxes, and Mandated Benefits | |
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| Other People?s Money: Rising Costs and Mediocre Benefits | |
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| Consumer-Driven Health Plans: High Deductibles and Health Savings Accounts | |
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| Defined Contribution Health Plans | |
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| Managed Care | |
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| Closed-Panel Group Practice HMOs | |
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| IPA-HMOs and Open Contracts | |
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| Managed Care Contract Provisions | |
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| The Range of Managed Care Contracts: POS, PPO, HMO | |
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| Provider Networks and Legal Structure | |
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| Management: The Distinctive Feature of Managed Care | |
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| Contractual Reforms to Control Costs | |
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| Unresolved Issues: Split Incentives, Divided Loyalties | |
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| Suggestions for Further Reading | |
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| Summary | |
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| Problems | |
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| Endnotes | |
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| Physicians | |
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| Questions | |
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| Financing Physician Services: Revenues | |
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| Copayments, Assignment, and Balance Billing | |
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| Physician Payment in Managed Care Plans | |
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| Incentives: Why Differences in the Type of Payment Matter | |
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| A Progression: From Prices to Reimbursement Mechanisms | |
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| Physician Incomes | |
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| Physician Financing: Expenses | |
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| Physician Practice Expenses | |
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| The Labor versus Leisure Choice | |
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| The Doctor's Workshop and Unpaid Hospital Inputs | |
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| Malpractice | |
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| The Medical Transaction | |
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| Asymmetric Information | |
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| Agency: Whose Choices? | |
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| Uncertainty | |
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| Licensure: Quality or Profits? | |
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| How Does Licensure Increase Physician Profits? | |
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| Supply and Demand Response in Licensed versus Unlicensed Professions | |
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| How Does Licensure Improve Quality? | |
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| A Test of the Quality Hypothesis: Strong Versus Weak Licensure | |
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| Suggestions for Further Reading | |
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| Summary | |
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| Problems | |
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| Endnotes | |
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| Medical Education, Organization, and Business Practices | |
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| Questions | |
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| Medical Education | |
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| The Origins of Licensure and Linkage to Medical Education | |
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| AMA Controls Over Physician Supply, 1930?1965 | |
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| Breaking the Contract: The Great Medical Student Expansion of 1970 to | |
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| Building Pressure: Fixed Domestic Graduation Rates 1980 to | |
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| Adjusting Physician Supply | |
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| The Flow of New Entrants and the Stock of Physicians | |
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| Immigration of International Medical Graduates | |
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| Growth in Non-MD Physicians | |
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| Balancing Supply and Incomes: Tracing the Past and Projecting the Future | |
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| Group Practice: How Organization and Technology Affect Transactions | |
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| Kickbacks, Self-Dealing, and Side Payments | |
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| Price Discrimination | |
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| Practice Variations | |
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| Insurance, Price Competition, and the Structure of Medical Markets | |
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| Choices by and for Physicians | |
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| Suggestions for Further Reading | |
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| Summary | |
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| Problems | |
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| Endnotes | |
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| Hospitals | |
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| Questions | |
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| From Charitable Institutions to Corporate Chains: Development of the Modern Hospital | |
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| Hospital Financing: Revenues | |
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| Sources of Revenues | |
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| Hospital Financing: Expenses | |
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| Financial Management and Cost Shifting | |
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| How Do Hospitals Compete? | |
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| Competing for Patients | |
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| Competing for Physicians | |
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| Competing for Contracts | |
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| Measuring Competitive Success | |
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| Measuring the Competitiveness of Markets | |
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| Organization: Who Controls the Hospital and for What Ends? | |
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| Suggestions for Further Reading | |
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| Summary | |
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| Problems | |
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| Endnotes | |
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| Management And Regulation Of Hospital Costs | |
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| Questions | |
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| Why Do Some Hospitals Cost More than Others? | |
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| How Management Controls Costs | |
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| Short-Run versus Long-Run Cost Functions | |
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| Uncertainty and Budgeting | |
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| Conflict Between Economic Theory and Accounting Measures of Per Unit Cost | |
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| Timing | |
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| Whose Costs? | |
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| Economies of Scale | |
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| The Hospital is a Multiproduct Firm | |
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| Contracting Out | |
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| Quality and Cost | |
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| Technology: Cutting Costs or Enhancing Quality? | |
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| Improved Efficiency Can Raise Total Spending | |
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| Hospital Charges, Costs, and Prices: Confusion and Chaos | |
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| Chargemaster and Negotiated Fees | |
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| Cost Finding: Gross Revenues and the RCCAC | |
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| Medicare as a Standard for Pricing | |
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| Controlling Hospital Costs through Regulation | |
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| Suggestions for Further Reading | |
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| Summary | |
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| Problems | |
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| Endnotes | |
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| Long-Term Care | |
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| Questions | |
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| Development of the Long-Term Care Market | |
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| Age and Health Care Spending | |
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| Defining LTC: Types of Care | |
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| Medicaid: Nursing Homes as a Two-Part Market | |
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| Certificate of Need: Whose Needs? | |
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| Money and Quality | |
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| Competing for Certificates of Need, Not for Patients | |
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| Evidence on the Effects of Certificates of Need | |
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| Cost Control by Substitution | |
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| Case-Mix Reimbursement | |
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| Long-term Care Insurance | |
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| Is Long-Term Care ?Medical?? | |
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| Retirement, Assisted Living, and the Wealthy Elderly | |
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| Financial Reimbursement Cycles | |
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| Suggestions for Further Reading | |