Actuarial Notes

Health Economics and Financing

By Thomas E. Getzen and Michael S. Kobernick · Wiley · 2022 · GH201-103-25

Study guides: Exam GH-201C, Exam GH-201U

A textbook on the economics and financing of health care, in its sixth edition (Wiley, February 2022). Wiley describes it as covering cost-benefit and cost-effectiveness analyses and the economic considerations driving the choices of physicians, hospitals and pharmaceutical companies, and the influence of public and private financial considerations on health care decision makers. The SOA lists selected sections of it as study note GH201-103-25.

On the syllabus

  • Exam GH-201C — Getzen and Kobernick, 6th Edition, 2022: Sections 5.4-5.6, 6.2-6.3, 7.4-7.5, 8.4-8.5, 13.2-13.3; Outcomes 5a, 5b, 5c.
  • Exam GH-201U — Getzen and Kobernick, 6th Edition, 2022: Sections 5.4-5.6, 6.2-6.3, 7.4-7.5, 8.4-8.5, 13.2-13.3; Outcomes 5a, 5c.

1 Choices: Money, Medicine, and Health

  • 1.1 What Is Economics?
  • 1.2 The Flow of Funds
  • 1.3 Economic Principles as Conceptual Tools
  • 1.4 Health Disparities
  • 1.5 Whose Choices: Personal, Group, or Public?
  • 1.6 Social Science and Rational Choice Theory

2 Demand and Supply

  • 2.1 The Demand Curve
  • 2.2 The Supply Curve
  • 2.3 Price Sensitivity
  • 2.4 Is Money the Only Price?
  • 2.5 Inputs and Production Functions
  • 2.6 Markets: The Intersection of Demand and Supply
  • 2.7 Need versus Demand
  • 2.8 Social Determinants of Health (SDoH)
  • 2.9 Efficiency

3 Cost-Benefit and Cost-Effectiveness Analysis

  • 3.1 Cost-Benefit Analysis Is about Making Choices
  • 3.2 Maximization: Finding the Optimum
  • 3.3 The Value of Life
  • 3.4 Quality-Adjusted Life Years (QALYs)
  • 3.5 CBA and Public Policy Decision Making

4 Financing Medical Care: Health Insurance Contracts: Managed Care

  • 4.1 Methods for Covering Risks
  • 4.2 Insurance Definitions
  • 4.3 Insurance: Third-Party Payment
  • 4.4 Sources of Insurance
  • 4.5 Contracting and Payments
  • 4.6 Managed Care

5 Physicians

  • 5.1 Financing Physician Services: Revenues
  • 5.2 Physician Incomes
  • 5.3 Physician Financing: Expenses
  • 5.4 The Medical Transaction
  • 5.5 Uncertainty
  • 5.6 Licensure: Quality or Profits?

6 Medical Education, Organization, and Business Practices

  • 6.1 Medical Education
  • 6.2 Licensure and Healthcare Provider Supply
  • 6.3 Group Practice: How Organization and Technology Affect Transactions
  • 6.4 Kickbacks, Self-Dealing, and Side Payments
  • 6.5 Price Discrimination
  • 6.6 Practice Variations
  • 6.7 Choices by and for Physicians

7 Hospitals

  • 7.1 From Charitable Institutions to Corporate Chains: Development of the Modern Hospital
  • 7.2 Hospital Financing: Revenues
  • 7.3 Hospital Financing: Expenses
  • 7.4 Financial Management and Cost Shifting
  • 7.5 How Do Hospitals Compete?
  • 7.6 Organization: Who Controls the Hospital and for What Ends?

8 Management and Regulation of Hospital Costs

  • 8.1 Why Do Some Hospitals Cost More than Others?
  • 8.2 How Management Controls Costs
  • 8.3 Conflict between Economic Theory and Accounting Measures of per Unit Cost
  • 8.4 Economies of Scale
  • 8.5 Hospital Charges, Costs, and Prices: Confusion and Chaos
  • 8.6 Controlling Hospital Costs through Regulation

9 Long-Term Care

  • 9.1 Development of the Long-Term Care Market
  • 9.2 Age and Health Care Spending
  • 9.3 Defining LTC: Types of Care
  • 9.4 Medicaid: Nursing Homes as a Two-Part Market
  • 9.5 Cost Control by Substitution
  • 9.6 Case-Mix Reimbursement
  • 9.7 LTC Insurance
  • 9.8 Retirement, Assisted Living, and the Wealth Elderly
  • 9.9 Financial Reimbursement Cycles

10 Pharmaceuticals

  • 10.1 Pharmaceutical Revenues: Sources of Financing
  • 10.2 Uses of Funds
  • 10.3 Research and Development
  • 10.4 Pharmacoeconomics and Technology Assessment
  • 10.5 Value, Cost, and Marketing

11 Financing and Ownership of Health Care Providers

  • 11.1 What Is Financing?
  • 11.2 Value and Rate of Return
  • 11.3 Ownership and Agency
  • 11.4 Capital Financing: Hospitals
  • 11.5 HMO Ownership and Capital Markets: Success and Failure
  • 11.6 Entrepreneurship and Profits

12 History, Demography, and the Growth of Modern Medicine

  • 12.1 Economic Growth Has Determined the Shape of Health Care
  • 12.2 Birth Rates, Death Rates, and Population Growth
  • 12.3 The Stone Age
  • 12.4 The Agricultural Age
  • 12.5 The Industrial Age
  • 12.6 The Information Age
  • 12.7 The Rise of Modern Medicine
  • 12.8 The Growth of Medical Expenditures and National Health Systems
  • 12.9 Income and Health
  • 12.10 Reducing Uncertainty: The Value of Life and Economic Security
  • 12.11 Did Better Medical Care Increase Life Expectancy?

13 Macroeconomics of Medical Care

  • 13.1 What Is Macro?
  • 13.2 The Consumption Function
  • 13.3 Adjusting to Change: Dynamics
  • 13.4 Forecasting Future Health Expenditures
  • 13.5 Cost Controls: Spending Gaps and the Push to Regulate
  • 13.6 Workforce Dynamics: “Spending” Is Mostly Labor

14 The Role of Government and Public Goods

  • 14.1 The Roles of Government
  • 14.2 Government Health Financing
  • 14.3 Law and Order
  • 14.4 Public Goods and Externalities
  • 14.5 Monopoly and Market Failure
  • 14.6 Information
  • 14.7 Drugs, Sex, and War: Public Health in Action
  • 14.8 Politics, Regulation and Competition
  • 14.9 Trust, Care, and Distribution

15 International Comparisons of Health and Health Expenditures

  • 15.1 Wide Differences among Nations
  • 15.2 Micro versus Macro Allocation: Health as a National Luxury Good
  • 15.3 Causality: Does More Spending Improve Health?
  • 15.4 Low-Income Countries
  • 15.5 Middle-Income Countries
  • 15.6 High-Income Countries
  • 15.7 The Expensive Exception: The United States
  • 15.8 International Trade in Health Care

16 Value for Money in the Future of Health Care

  • 16.1 Who Gets Healthy and Who Gets Paid?
  • 16.2 What Needs to Be Fixed?
  • 16.3 Distribution, Distribution, Distribution
  • 16.4 Spending Money or Producing Health?
  • 16.5 The Path Toward Full Coverage
  • 16.6 The Future: Population Health and the Reorganization of Medicine
  • 16.7 The Long Run: 2050 and Beyond

Glossary

Index

Sources