The Economics of Healthcare: Crash Course Economics #29

CrashCourse

6 Apr 201610:26

EducationalLearning

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TLDRAdriene Hill and Jacob Clifford discuss economics related to healthcare. They explain how healthcare differs from other markets since urgency fluctuates and providers can't wait for payments. The majority of Americans have private or public health insurance to help cover costs. The US spends much more per-person on healthcare than other developed nations due to more tests/treatments performed, higher prices charged by providers, and substantial administrative expenditures. Quality care metrics in the US are mixed. The 2010 Affordable Care Act (Obamacare) aimed to expand access and reduce costs but its effects remain debated.

Takeaways

😀 Healthcare markets differ from other markets due to unpredictable need for care, role of insurance, and inability of patients to shop around.
😕 Americans spend far more on healthcare than other developed nations but do not have better health outcomes.
😞 High healthcare prices and administrative inefficiency are major drivers of high US healthcare costs.
🤔 The US system attempts to balance private markets and public regulation.
😯 10.4% of Americans lacked health insurance in 2014, down from 13.3% in 2013.
😊 The Affordable Care Act (Obamacare) aims to increase access mainly by regulating private insurers.
😥 Challenges in US healthcare reflect difficulties balancing capitalism, public good, and special interests.
😢 The US system consumes high quantity of care but prices are much higher than elsewhere.
🤨 Government-funded insurance covered about a third of Americans in 2014.
😉 Other nations achieve equal or better outcomes while spending far less through unified public systems.

Q & A

What are the three main criteria economists use to evaluate a healthcare system?
-The three main criteria are: Access - the percentage of people with health insurance coverage; Cost - how much a country spends on healthcare per person; and Quality - metrics like preventable hospital admissions and medical errors.
What percentage of Americans did not have health insurance in 2014?
-In 2014, 10.4% of Americans did not have health insurance coverage, down from 13.3% in 2013.
Why does the US spend so much more on healthcare than other developed countries?
-Reasons include: higher quantity of care per person; higher prices for treatments and procedures (often 3-5 times more); lack of ability to negotiate prices; and high administrative costs from billing paperwork.
What is Medicare in the US healthcare system?
-Medicare is a taxpayer-funded public health insurer that pays healthcare providers to care for Americans over 65 years old. It is an example of a single-payer system in the US.
What is the Iron Triangle in relation to healthcare reform?
-The Iron Triangle refers to the mutually beneficial relationship between Congress, government bureaucrats, and lobbyists that maintains the status quo and resists major reforms.
What are the main provisions of the Affordable Care Act (Obamacare)?
-Key provisions include: requiring insurers to cover everyone regardless of pre-existing conditions; mandating that individuals obtain insurance; subsidizing premiums for lower-income people; rewarding doctors for cutting costs.
Did Obamacare establish a single-payer universal healthcare system?
-No, Obamacare did not establish a single-payer or universal public health insurance system. It relies on private health insurers but regulates them more heavily.
How has Obamacare affected health insurance access and costs?
-It has reduced the number of uninsured Americans, so access has improved. Assessing its impact on costs is more complex, though it introduced some cost-cutting measures.
What is the role of private health insurance companies in Canada's system?
-In Canada's single-payer system, private health insurance plays a smaller role, mainly covering areas not included under the public system like prescription drugs and dental care.
What are the tradeoffs involved in more or less government intervention in healthcare?
-More government intervention can increase access and affordability but reduces consumer choice and innovation. Less intervention relies more on market mechanisms but leaves more people uninsured.

Outlines

00:00

😃 Introducing Healthcare Economics

Adriene and Jacob introduce the topic of healthcare economics. They explain how healthcare is different from other markets, since you can't shop around when having a medical emergency. They note that every country pays for healthcare through some combination of private insurance, public insurance, or taxes. They preview analyzing healthcare in terms of access, cost, and quality.

05:02

😮 Comparing Healthcare Systems

Jacob compares the healthcare systems of Canada, France, the UK, and the US. Canada has a single-payer public system funded through taxes. France has mandatory private non-profit insurance. The UK has a socialized system controlled by the government. The US has a mix of private and public insurance.

10:04

🤔 Evaluating the US Healthcare System

Adriene examines healthcare access, cost, and quality in the US. In 2014, 10.4% of Americans were uninsured. Insurance is a mix of private (66%) and public (33%). Those without insurance tend to be younger, earn less, and be more diverse. The US spends far more per person than other countries, mainly due to higher prices. Quality metrics are mixed.

😕 The Challenges of Healthcare Reform

Jacob explains that reforming healthcare is difficult due to the Iron Triangle relationship between Congress, bureaucrats, and lobbyists. He summarizes the major provisions of the Affordable Care Act (Obamacare) which aimed to increase access, control costs, and improve quality with mixed results so far.

🤗 Thank You and Wrap Up

Adriene and Jacob thank the viewers and crew. They reiterate that healthcare reform reflects Americans' unease with both government and capitalism. Adriene says goodbye as this is the end of their textbook economics episodes.

Mindmap

Keywords

💡Healthcare

Healthcare refers to the system that provides medical services to treat illnesses and injuries. The video discusses how healthcare economics is different from other markets, given the unpredictability of need and inability to 'shop around' in emergencies. It states that this is why health insurance, whether private or public, is important.

💡Insurance

Insurance is a system where individuals pay premiums to a company or government program, which then pays all or part of their medical expenses if they get sick or injured. The video compares different models - Canada has government-funded healthcare for all through taxes, while the US has a mix of private insurance and public programs like Medicare.

💡Medicare

Medicare is a US public health insurance program funded by taxpayers that covers healthcare expenses for seniors over 65 and some low income groups. The video states Medicare is an example of a 'single payer' system where government pays healthcare providers directly.

💡Medicaid

Medicaid is a US public health insurance program, similar to Medicare, that covers healthcare expenses for low-income individuals and families who meet certain eligibility criteria. The video categorizes both as 'single payer' systems.

💡Uninsured

The uninsured refers to individuals without any health insurance coverage, public or private. The video provides data on the demographics and income levels of the uninsured in the US, and states they can incur extremely high medical bills, further increasing costs.

💡Obamacare

Obamacare refers to the 2010 US Affordable Care Act that enacted reforms intended to expand access, lower costs, and improve quality in the American healthcare system. Specific provisions aimed at these goals are covered in the video.

💡Premiums

Premiums are periodic payment amounts that individuals or employers pay to health insurance companies for coverage. The video states insurance collects premiums from individuals to pay for future healthcare expenses.

💡Taxes

Taxes refer to money collected by government rather than private insurance premiums, which is then used to fund public health insurance programs. The video states that even countries with 'free' healthcare pay for it through taxes.

💡Iron Triangle

The Iron Triangle refers to the mutually beneficial relationship between Congress, bureaucrats, and industry lobbyists that impedes healthcare reform in favor of maintaining status quo and benefits.

💡Cost Sharing

Cost sharing refers to provisions like co-pays and deductibles that require patients to pay a portion of their own healthcare expenses not covered by insurance. The video states this can deter overuse.

Highlights

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Transcripts

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