ONE COURSE SUE BARTON NEVER TOOK: HEALTH CARE ECONOMICS

We examine in this article a frequently overlooked, if not ignored, premise underlying the canonical assurance game model: Hunters could potentially bag more than a single hare (or two) in place of the prized stag. Whether a risk-dominant equilibrium is necessarily inefficient or inferior to one that is assumed to be payoff-dominant is the question we seek to address. In doing so, we suggest plausible variations of the model with different game-theoretic realizations. Single-play illustrations drawn from robotic surgery underscore their practical implications for health care economics and management. The robotic technology revolution amplifies the rational and interactive choices available to players under conditions of risk and uncertainty. Like the canonical model, our illustrations involve insulated, self-interested actions arising from the presence or absence of trust and coordination among players. They differ from the canonical model by allowing for multiple, potentially cooperative equilibrium payoffs. Any cooperative action can be considered optimal if players coordinated on it, taking fully into account the quantifiable and multiplicable value of their second best strategies. Nonetheless, we suggest that any dominant solution/s should accommodate best evidence in health care to provide patients with the most suitable treatments and services. There lies the challenge in reconciling theory and practice in health economics. JEL Classifications: C70, C71, I11, I12

Download Full-text

Economic theory meets clinical practice: moral hazard

International Journal of Integrative Pediatrics and Environmental Medicine ◽

10.36013/ijipem.v4i1.63 ◽

2019 ◽

Vol 4 ◽

Author(s):

Olga Vasylyeva

Keyword(s):

Health Care ◽

Economic Theory ◽

Clinical Practice ◽

Moral Hazard ◽

Real Life ◽

Medical Services ◽

Health Care Economics ◽

Services Utilization ◽

Field Of Vision ◽

Concept Of Health

Economic theory must be tested by reality to prove that the goal is achievable and reproducible. However, health care economics do not always theorize based on modern-day medical practice, which results in detachment of some economic recommendations from real-life medicine. The theory of “moral hazard” assumes that patients will utilize more medical services if they transfer the risk of cost to insurances. In this article, we will revisit the understanding of appropriate avoidance of medical services and incorporate no-show rate, avoidance of care, and nonadherence into the concept of health services utilization. The primary goal of this interdisciplinary commentary is to bridge economic theory with clinical practice. It is written from the perspective of a clinical practitioner, who applies realities of everyday medicine to economic reasoning. The author hopes that this abstract will extend the field of vision of health care economics.

Download Full-text

Health Economics: Select Concepts of the Health Production Function, Risk, and Insurance

10.2310/7ccsp.2405 ◽

2018 ◽

Author(s):

Bruce L Hall

Keyword(s):

Health Care ◽

Health Economics ◽

Health Care Policy ◽

Insurance Contract ◽

Health Care Economics ◽

Health Production ◽

Health Production Function ◽

Concept Of Health ◽

The Individual ◽

Entire Theory

The production of health as an output of various inputs is a key concept of health care economics and a key influence on health care policy. Similarly, the notion of risk—that an outcome might not turn out as expected or hoped—underpins the entire theory of insurance. Insurance, and the benefits it can provide, cannot be understood without understanding risk, or without understanding how the features of an insurance contract transform risk for the individual, the payer, or society. The health economist, policy maker, leader, expert operator, financier, insurer, clinician of any stripe, patient or family or advocate, or other interested stakeholder must always consider the structural, clinical, and economic anatomy of health care in the context of the underlying physiology of these economic concepts. This review contains 2 figures, 1 table, and 14 references. Key Words: health economics, health policy, health production, marginal return (diminishing), utility, inputs, QALY, risk (aversion or tolerance), insurance (contract features)

Download Full-text