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| QUICK REVIEW 35-1 |
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- Health care spending in the United States has
been increasing absolutely
as a percentage of domestic output
and per capita.
- Rising health care costs have caused (a) more
people to find health insurance unaffordable; (b) adverse labor market effects
including
slower real wage growth and increased use of part-time and temporary workers; and (c)
restriction of nonhealth spending by governments.
- The basic problem with rising health care
spending is that it may reflect an overal location of resources to the health care
industry.
- Approximately one-sixth of all Americans have no
health insurance and
hence
no (or limited) access to health care.
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| QUICK REVIEW 35-2 |
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- Characteristics of the health care market are (a)
the widespread view of health care as a "right
" (b) asymmetric information
between consumers and suppliers
(c) the presence of spillover benefits
and (d) payment
mostly by insurance.
- The demand for health care has increased for many
reasons
including rising incomes
an aging population
unhealthy lifestyles
the role of
doctors as advisers to patients
the practice of defensive medicine
and a fee-for-service
payment system via health insurance.
- The supply of health care has grown slowly
primarily because of (a) relatively slow productivity growth in the health care industry
(b) rising costs of medical education and training
and (c) greater use of very high cost
health care technologies.
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