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Health Economics Fundamentals and Flow of Funds

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ISBN-10: 047158648X

ISBN-13: 9780471586487

Edition: 1st 1998

Authors: Thomas E. Getzen

List price: $79.95
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The practical primer to one of the most dynamic fields in economics! Thomas Getzen, a leading academic and practitioner, has authored a complete primer for the economic analysis of medical markets and the production of health. Accessible to those with little or no economic background, this book includes a foreword by Nobel Laureate Kenneth J. Arrow and will interest anyone who wants to understand the issues and economic questions associated with allocating resources to medical care. Recognizing that the exchange of care for money is complex and not easily summarized, Getzen traces the economic rationale and development of medical care organizations as well as the economic and political factors that have influenced them. The book begins with a "flow of funds" approach to describing the incentives and organizational structure of the health care system. It then outlines the continuing evolution of Managed Care in the United States. The last section of the book uses a macroeconomics perspective to explore the dynamics of change within the health care system and to explicitly consider determinants of national health spending. From the Foreword by Kenneth J. Arrow...; The economic problems of allocating resources to medical care have long been a major part of government economic policy, more in other countries than in the United States. The steady rise in the expenditures on medical care, out-stripping the rise in national income by a considerable margin, has brought these issues to the fore of public attention. Equally important has been the increase of explicit consideration of costs within the medical profession; the historically unwelcome trade-off between costs and treatment has come forcibly to the fore. The need for good education and good texts has become acute, and Professor Getzen's book is a welcome attempt to meet this strongly felt need.
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Book details

List price: $79.95
Edition: 1st
Copyright year: 1998
Publisher: John Wiley & Sons, Incorporated
Publication date: 9/22/1998
Binding: Hardcover
Pages: 480
Size: 7.20" wide x 10.08" long x 0.99" tall
Weight: 2.046
Language: English

About the Author
Terms of Trade: The Flow of Funds Through the Health Care System
What is Economics?
Terms of Trade
The Flow of Funds
Health Care Spending in the United States
Sources of Funds
Health Care Providers: The Uses of Funds
Public or Private Choices
The Structure of the Economy: Contracts
Economic Principles as Conceptual Tools
Choice: Are Benefits Greater Than Costs?
Opportunity Cost
Scarcity (Budget Constraints)
Money Flows in a Circle
Contracts and Organization
Health Principles
Health Is Priceless
And Yet, Money Still Determines Health
Health Risks Are More Public Than Private
Individual Choices: Lifestyle Is More Than Medicine
Measurable Differences in Quality Over Time, or Regions, Are Greater Than Most Differences in Choices Faced by Patients
Health and the Economy
Suggestions for Further Reading
Need Versus Demand
The Demand Curve
The Diamonds-Water Paradox: An Example of Marginal Analysis
Ceteris Paribus
Derived Demand
Individual, Firm, and Market Demand Curves
Marginal Revenue
Price Sensitivity
Price Elasticity and Marginal Revenue
Price Discrimination
Is Price the Only Thing That Matters?
Profit-Maximizing Firms, Supply, and Markets
Suggestions for Further Reading
Cost-Benefit and Cost-Effectiveness Analysis
Cost-Benefit Analysis is About Making Choices
An Everyday Example: Knee Injury
Opportunity Cost: Looking at Alternatives
Expected Value
Maximization: Finding the Optimum
Average, Total, and Marginal Costs
An Example of Marginal Analysis: Costs and Benefits of a Sixth Stool Guaiac
Measuring Benefits
Reductions in Future Medical Costs
Measuring Costs
Medical Care and Administration: Charges Versus Costs
Follow-up and Treatment
Time and Pain of Patient and Family
Provider Time and Inconvenience
The Value of Life
Quality-Adjusted Life Years (QALYs)
Discounting Over Time
QALY League Tables
Perspectives: Patient, Payer, Government, Provider, Society
Distribution: Whose Costs and Whose Benefits?
CBA Is a Limited Perspective
CBA and Public Policy Decision Making
Suggestions for Further Reading
Methods for Covering Risks
Family and Friends
Private Market Insurance Contracts
Social Insurance
Strengths and Weaknesses of Different Forms of Risk Spreading
Why Third-Party Payment?
Risk Aversion
Adverse Selection
Moral Hazard
Welfare Losses Due to Moral Hazard
Open or Closed Funding?
Suggestions for Further Reading
Insurance Contracts and Managed Care
Third-Party Transactions
Tax Benefits
Who Pays? How Much?
Managed Care Plans
How are Benefits Determined?
Types of Insurance Plans
Employer-Based Group Health Insurance
Self-Paid Private Insurance
Other Government Programs and Charity
The Uninsured
State Children's Health Insurance Program
Medical Savings Accounts (MSAs) and Defined Contribution "Voucher" Plans
A Range of Risk Bearing: Fixed Premiums, Administered Services Only, and Self-Insurance
The Underwriting Cycle
Erisa, Taxes, and Mandated Benefits
History of Health Insurance
Incentives--To Patients, to Payers, and to Providers
Suggestions for Further Reading
Physician Payment: How Funds Flow in
Co-pays, Assignment, and Balance Billing
Physician Payment in Managed Care Plans
Incentives: Why Differences in the Type of Payment Matter
A Progression: From Prices to Reimbursement Mechanisms
Physician Incomes
Physician Costs: How Funds Flow Out
Physician Practice Expenses
The Labor-Leisure Choice
The Doctor's Workshop and Unpaid Hospital Inputs
The Transaction Between Doctor and Patient
Asymmetric Information
Licensure: Quality or Profits?
How Does Licensure Increase Physician Profits?
Supply and Demand Response in Licensed Versus Unlicensed Professions
How Does Licensure Improve Quality?
A Test of the Quality Hypothesis: Strong Versus Weak Licensure
Suggestions for Further Reading
Medical Education, Organization, and Business Practices
Medical Education
Human Capital: Medical Education as Investment
The Origins of Licensure and Linkage to Medical Education
AMA Controls Over Physician Supply, 1930-1965
Breaking the Contract: The Great Medical Student Expansion of 1970-1980
Building Pressure: Fixed Domestic Graduation Rates 1980-2002
Adjusting Physician Supply
The Flow of New Entrants and the Stock of Physicians
Immigration of International Medical Graduates
Growth in Non-M.D. Physicians
Balancing Supply and Incomes: Tracing the Past and Projecting the Future
Group Practice: How Organization and Technology Affect Transactions
Kickbacks, Self-Dealing, and Side Payments
Price Discrimination
Practice Variations
Insurance, Price Competition, and the Structure of Medical Markets
Suggestions for Further Reading
From Charitable Institutions to Corporate Chains: Development of the Modern Hospital
Revenues: The Flow of Funds into the Hospital
Sources of Revenues
Costs: The Flow of Funds Out of the Hospital
Financial Management and cost Shifting
Capital Financing
Organization: Who Controls the Hospital and for What Ends?
Suggestions for Further Reading
Management and Regulation of Hospital Costs
Why do Some Hospitals Cost More Than Others?
How Management Controls Costs
Short-Run Versus Long-Run Cost Functions
Uncertainty and Budgeting
Conflict Between Economic Theory and Accounting Measures of Per Unit Cost
Whose Costs?
Economies of Scale
The Hospital is a Multiproduct Firm
Contracting Out
Quality and Cost
Technology: Cutting Costs or Enhancing Quality?
Improved Efficiency May Raise Total Spending
How do Hospitals Compete?
Competing for Patients
Competing for Physicians
Competing for Contracts
Measuring Competitive Success
Measuring the Competitiveness of Markets
Controlling Hospital Costs Through Regulation
Suggestions for Further Reading
Managed Care
Why Managed Care?
Costs and Quality
Management: The Distinctive Feature of Managed Care
Contractual Reforms to Reduce Costs
Reforming the Organization to Reduce Cost
Sources and Uses of Funds
The Range of Managed Care Plans
Provider Networks
Utilization Review
How Care is Managed: A Mental Health Example
Individual and System Risks in Health Care
Kaiser: The Evolution of an HMO
Ownership and Capital Markets: Signs of Failure
GHA: A Consumer Co-op Gets Bought Out by a Franchise Chain
Corporate Advantage
U.S. Healthcare: A Profitable Growth Company
The Enthoven "Managed Competition" Plan
Is Managed Care the Solution to Rising Costs?
Evidence on Cost Reductions
Risk Selection
Quality of Care
Costs Reductions in IPA HMOs, PPOs, and POS Plans
Administrative Costs and Profits
One-Time Savings?
Backlash: Are There Losers as well as Winners?
Suggestions for Further Reading
Long-Term Care
Development of the Long-Term Care Market
Defining Ltc: Types of Care
Medicaid: Nursing Homes as a Two-Part Market
Certificate of Need: Whose Needs?
Money and Quality
Competing for Certificates of Need, Not for Patients
Evidence on the Effects of CON
Case-Mix Reimbursement
Financial Reimbursement Cycles
Continuing Care Retirement Communities and the Wealthy Elderly
Medicare Catastrophic Coverage Act of 1988 and the Taxpayer Revolt
The Effects of Aging on Cost and Utilization
Defining Boundaries: Is Long-Term Care "Medical"?
LTC Insurance
The Effects of Aging
Suggestions for Further Reading
How Funds Flow in
Medicare and Medicaid
Inpatient Pharmaceuticals
Uses of Funds
Retail Pharmacies
Insurance Companies and PBMs
Pharmaceutical Firms
Cost Structure
History and Regulation of Pharmaceuticals
Research and Development
Pharmacoeconomics and Outcomes Research
Industry Structure and Competition
Market Segmentation: Types of Buyers
Contractual Responses to Pharmacy Benefits Management
Value and Cost
The Role of Middlemen: Distribution Versus Marketing
Research Productivity
Trends: Form Follows Function (and Money)
Suggestions for Further Reading
Introduction to the Macroeconomics of Health
What is Macro Health Economics?
Properties of the Individual Versus Properties of the System
Dynamics: Change Over Time
Abstractions and Complications
The Role of Government (Overview of Chapters 14-18)
Suggestions for Further Reading
The Role of Government
The Flow of Government Health Funds
The Roles of Government
Government is Necessary, Even for Private Exchange
Efficiency of Markets Under Conditions of Perfect Competition
Government in a Mixed Economy
Law and Order
Public Goods and Externalities
The Coase Theorem: Transaction Costs and Property Rights
Politicians: Entrepreneurs Who Try to Get Votes
Market Failure
Income Redistribution and Care of the Poor
Medicaid and Medicare: Dependency or Rights?
How Government Works
The Voluntary Sector
Government as the Citizen's Agent
Winners and Losers
Pros and Cons of Regulation and Competition
Suggestions for Further Reading
Public Goods and Public Health
Characteristics of Public Goods
Privatizing Public Goods
Social Costs Depend on the Number of People
Insurance Makes Any Good More Public
Rational Consumer Ignorance
Milk or Bread: Which is More Public?
The Theory of Pure Public Goods
Public Goods Make Most People Better Off, But Few Happy
Infectious Disease Externalities
The Sanitary Revolution: A Moral Campaign for Public Health
Formation of the U.S. Public Health Service
Sex, Drugs, and War: Public Health in Action
Who Counts as a Citizen? Abortion and Other Dilemmas
War and Public Health
Suggestions for Further Reading
Economic History, Population Growth, and Medical Care
Economic Growth has Determined the Shape of Health Care
Birth Rates, Death Rates, and Population Growth
The Stone Age
The Agricultural Age
Investment and Trade
Civilization, War, and Government
The Decline of Civilizations Leads to Population Declines
The Plague
Food Supply Determines Population
The Rise of Economics
The Malthusian Hypothesis
The Industrial Age
Why Malthus Was Wrong
Demographic Transition
Demographic Change, Income Distribution, and the Rise of the Middle Classes
The Information Age
Income and Health
Income and the Value of Medical Care
Reducing Uncertainty: The Value of Life and Economic Security
The Value of Risk Reduction
Social Security and Health Insurance
Preconditions for Changing Medical Organization
The Rise of Medical Technology
Suggestions for Further Reading
International Comparisons of Health and Health Expenditures
Wide Differences Among Nations
Size of the Market
Micro Versus Macro Allocation: Health as a National Luxury Good
Causality: Does More Spending Improve Health?
Low-Income Countries
Health Care in Kenya
Middle-Income Countries
The Health Care System of Mexico
High-Income Countries
Costs and Cost Control
The German Health System
International Trade in Health Care
People and Ideas
Suggestions for Further Reading
Dynamics of National Health Spending
Micro and Macro Perspectives on Spending
The Consumption Function
The Permanent Income Hypothesis
Income Elasticity and Shared Income
Permanent Income and Adjustment of Health Spending to GDP
Adjustment to Inflation
A Dynamic Model of U.S. Health Expenditures
Government Cost Controls: Spending Gaps and the Push to Regulate
Price Controls: The "ESP" Program
The Voluntary Effort
Prospective Payment System with Diagnosis-Related Groups
Why Do People Believe Cost Controls Work?
"Spending" is Mostly Labor
Suggestions for Further Reading
Value for Money in the Future of Health Care
Forcing the Question: Who Gets Healthy and Who Gets Paid?
Spending Money or Producing Health?
Allocation, Allocation, Allocation
Dynamic Efficiency
The Future
Suggestions for Further Reading