Download PDF The Economics of Health and Health Care Seventh Edition by Sherman Folland

Sinopsis

Health care accounts for over one-sixth of the U.S. economy! In 2009, the year before passage of the Patient Protection and Affordable Care Act (PPACA), the Obama reform legislation, about 50 million Americans at any moment in time lacked health insurance. Health, health care costs, and health insurance have dominated the economic and political landscape in the United States and many other countries. Health economics studies the allocation of resources to and within the health economy. Because the health care sector has become the largest sector of the U.S. economy, and its share of gross domestic product (GDP) is expected to grow well into the twenty-first century, we should not be surprised that health economics has emerged as a distinct specialty within economics.

Our table of contents provides an overview of the scope of health economics and the emphasis of this text. Demand and supply of specific health services are prominent. Private health insurance markets critically define the U.S. workplace, so we carefully examine these markets. Government, through its social programs and power to regulate, receives close attention. Because a hospitalization is in many ways different from a trip to a supermarket, we also concentrate on issues such as information, quality of care, and equity of access. Finally, we look to the health care systems of other countries for information on their practices and for potential insights on the policy issues that dominate the political landscape.

In this first chapter, we provide further background information on health economics and health economists. We follow with a broad overview of the magnitude and importance of the health care sector and with an introduction to some major policy concerns. As our final goal, we seek to promote the theme that economics

helps explain how health care markets function. We focus on methods used in economic analyses and address two recurring questions: Is health care different, and does economics apply? Despite stressing the distinctive features of health care services and markets, we answer both in the affirmative. With appropriate modifications to conventional analytical tools, economics is relevant and useful. As we shall see throughout the book, although there is continuing controversy on many major issues, health economists have provided insight and solutions to most problems of academic and policy interest.

WHAT IS HEALTH ECONOMICS?

Health economics is defined by who health economists are, and what they do! Morrisey and Cawley (2008) examine the field of health economics and those who shape the discipline. Their 2005 survey of U.S. health economists describes who they are.

1. Training: Almost all (96 percent) held academic doctorate degrees. Nearly three-quarters of those with doctorates received their degrees in economics.
2. Employment: 64 percent worked in university settings; 15 percent worked for nonprofit organizations; and 12 percent worked in government, mainly the federal government.
3. Academic Unit: Only 24 percent of health economists held their appointments in economics departments. More (26 percent) were found in schools of public health, and another 18 percent were employed in schools of medicine.

Second, and of greater relevance to us, Morrisey and Cawley’s survey gathered information on what health economists actually do. Health economists draw on various sub-disciplines of training within economics, including labor economics, industrial organization, public finance, and costbenefit analyses.

Content

1. Basic Economics Tools
2. Supply and Demand
3. Information and Insurance Markets
4. Key Players in the Health Care Sector
5. Social Insurance
6. Special Topics

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