Question

1 Describe how the health insurance market has been inefficient, historically how they can be efficient when coverage is lacking.

2 Include information on alternative measures of equity, How will health care reform address these inefficiencies?

3 Take on the extra-welfarist approach and comment on the information from that perspective.

Answer 1

Answer1 )

Although countries around the world are grappling with the problem of rising health expenditures, the United States has reason for particular concern. Americans are dissatisfied with their healthcare system ) but also spend more than the citizens of other nations: 15 percent of GDP on health care in 2006, compared to 11 percent in France and Germany, 10 percent in Canada, and 8 percent in the United Kingdom and Japan

There is no question that the United States spends the most, but some observers view this money as well spent and forecast that future healthcare expenditures could optimally account for nearly one-third of GDP . Improvements in cardiovascular health and in the survival of premature infants in the United States have been estimated to be worth their high expendit but the efficiency cost of the U.S. health system has also been estimated at 20–30 percent of healthcare spending, or 3–5 percent of GDP , and according to some studies, avoidable deaths and medical errors are much more common in the United States than in European countrie

In this paper, we address two distinct questions about the efficiency of U.S. healthcare expenditures. First, does U.S. health care display inferior productive efficiency—that is, given a bundle of factor inputs like physicians, nurses, hospital beds, and capital, is the aggregate impact of health care in the United States less than in other countries? This question is surprisingly difficult to answer. Cross-country comparisons of expenditures and health outcomes are common but are also of limited value because of our inability to control adequately for underlying health differences across countries—for example, that Americans are more likely to have diabetes or to be obese compared to the English (Banks, Marmot, Oldfield, and Smith, 2006). Micro-level analyses of specific treatments for comparable patients across countries are free of some of the defects of more aggregated comparisons, and they suggest that while nearly all countries fall well short of ideal on measures of productive efficiency, the United States healthcare system sometimes (but not always) lags behind. Common explanations have included fragmentation of care (as Cebul, Rebitzer, Taylor, and Votruba argue in this issue), higher administrative costs, and patterns of care that vary inappropriately with race, geography, and financial barriers.

Second, is U.S. healthcare spending allocatively efficient compared to other countries—that is, do health benefits from the marginal dollar spent on health care consistently exceed the opportunity cost of other goods that might be provided—raising teachers’ salaries, improved insurance coverage for Iraq war veterans, or even upgrading to a BMW 5 Series? Some degree of allocative inefficiency is inevitable in any healthcare system because insurance for medical care causes overutilization due to moral hazard. But both the very high level and rate of growth of U.S. health spending suggests that it experiences a unique degree of allocative inefficiency, even when compared to other high-income countries. The fundamental cause is a combination of high prices for inputs, poorly restrained incentives for overutilization, and a tendency to adopt expensive medical innovations rapidly, even when evidence of effectiveness is weak or absent. As we argue below, the distinction between allocative and productive efficiency can make it easier to understand the consequences of different healthcare reforms, which often address one type of inefficiency but have limited or unintentional effects on the other.

Healthcare Productivity and Efficiency

Rising health expenditures, whether expressed as a share of GDP or on a per capita basis, are not unique to the United States, as Figure 1 shows. Countries around the world are grappling with the question of whether they are spending too much—or not enough—on health care and whether their citizens are receiving benefits commensurate with the increased budgetary burdens. However, no country has experienced either a level or rate of growth of health expenditures as large as in the

Answer2 :

Healthcare is a complex investment which requires a number

of stakeholders (direct and indirect) contribution to produce

the desired health outcomes. In addition to its complex nature

imperfect market in the field and limited/scarce resources for

providing healthcare for population poses a number of questions

for policy makers. Among these multitudes of questions,

Efficiency, Equity and Effectiveness have complex interplay and

require balanced tradeoff between them .

Efficiency is a measure of the quality and/or quantity of output

for a given level of input. It could be technical or allocative.

Allocative Efficiency is use of limited resources towards producing

the correct mix of health care outputs. Technical Efficiency is the

extent to which the system is minimizing its inputs in producing

its chosen outputs, regardless of the value placed on

Wastage For example, $760 billion to $935 billion, accounting  

for approximately 25% of total health care spending in US health

system is wastage In Namibia 52% Public Hospitals were

technically inefficient In Ghana only 24% district hospitals

were technically efficient In Eretria about 68% of hospitals

were technically efficient and only 42% were scale efficient

Similar study conducted in 2016 among primary health centers

in Ethiopia showed that 54% of sampled health centers were

technically inefficient

Major reasons for inefficiency in health sector include: in

appropriate Medicine use; over or under supply health services;

inappropriate Health task force mix, medical errors, suboptimal

quality of care, corruption and poor integration of health facilities

Today almost all countries in the world are focusing on

efficiency of their health care system to ensure universal health coverage

In addition to inefficiency problem, health system is also suffering from equity problem. This is because health economic evaluations  

continue to focus on maximizing health gain and health equity

considerations are rarely mentioned

Health care system should ensure access to: good quality care

for patients who need them at a reasonable price. There is always debate on three important terms, efficiency, equity, and  

Effectiveness. They usually go together and right approach to ddress them will improve welfare of society Despite  

the presence evidence about effectiveness is healthcare

interventions, translating evidences into practice requires tradeoff

between effectiveness, efficiency and equity due to scarcity of

available health resources. However, Policy makers and managers in the health care system face difficulty in addressing  

them together. This explanatory review was conducted with

intension to describe the role of addressing efficiency on equity,

effectiveness and access to healthcare.

Methods

Search strategy

query. Effectiveness, Efficiency, Equity, Delivery of healthcare,

Health care decision making.

Inclusion exclusion criteria

• Studies described Efficiency, equity, effectiveness and

healthcare decision making were included

• Studies conducted in English Language are included

• Short communications, and conference proceedings are

excluded Study selection and Evidence synthesis

From total of 152 articles identified

potentially relevant articles were selected, after applying the

inclusion exclusion criteria listed above only 65 articles were

found to be relevant two investigators) independently reviewed each study’s abstract against pre- specified inclusion and exclusion criteria. In case of disagreement

on quality of the article two authors discussed In front of table in presence of the third author

Evidence synthesis

We qualitatively synthesized the evidence. Firstly we defined efficiency how to measure efficiency in Healthcare system.