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U.s. health care in an international context

The United States is the only high-income country in the world where most health insurance is paid for and provided by private firms. Greater government involvement in the provision of health insurance is one possible way of addressing moral hazard and adverse selection problems.

The moral hazard problem with health insurance is that when people have insurance, they will demand higher quantities of health care. In the United States, private healthcare insurance tends to encourage an ever-greater demand for healthcare services, which healthcare providers are happy to fulfill. [link] shows that on a per-person basis, U.S. healthcare spending towers above other countries. It should be noted that while healthcare expenditures in the United States are far higher than healthcare expenditures in other countries, the health outcomes in the United States, as measured by life expectancy and lower rates of childhood mortality, tend to be lower. Health outcomes, however, may not be significantly affected by healthcare expenditures. Many studies have shown that a country’s health is more closely related to diet, exercise, and genetic factors than to healthcare expenditure. This fact further emphasizes that the United States is spending very large amounts on medical care with little obvious health gain.

In the U.S. health insurance market, the main way of solving this adverse selection problem is that health insurance is often sold through groups based on place of employment, or, under The Affordable Care Act, from a state government sponsored health exchange market. From an insurance company’s point of view, selling insurance through an employer mixes together a group of people—some with high risks of future health problems and some with lower risks—and thus reduces the insurance firm’s fear of attracting only those who have high risks. However, many small companies do not provide health insurance to their employees, and many lower-paying jobs do not include health insurance. Even after all U.S. government programs that provide health insurance for the elderly and the poor are taken into account, approximately 32 million Americans were without health insurance in 2015. While a government-controlled system can avoid the adverse selection problem entirely by providing at least basic health insurance for all, another option is to mandate that all Americans buy health insurance from some provider by preventing providers from denying individuals based on preexisting conditions. Indeed, this approach was adopted in the Patient Protection and Affordable Care Act, which is discussed later on in this chapter.

(Source: 2010 OECD study and World Fact Book)
A comparison of healthcare spending across select countries
Country Health Care Spending per Person (in 2008) Male Life Expectancy at Birth, in Years (in 2012) Female Life Expectancy at Birth, in Years (in 2012) Male Chance of Dying before Age 5, per 1,000 (in 2012) Female Chance of Dying before Age 5, per 1,000 (in 2012)
United States $7,538 76 81 8 7
Germany $3,737 78 83 4 4
France $3,696 78 85 4 4
Canada $4,079 79 84 6 5
United Kingdom $3,129 78 83 5 4

Questions & Answers

a mixed economic system
Ngong Reply
What are the types of price elasticity of demand
Juliana Reply
what are massures to promote geographical mobility of labor?
Ngong
Is to make sure that a labourer to know more about his salary to earn before going to the direction
shehu
what is trade
PHILIPPE Reply
Trade is a basic economic concept involving the buying and selling of goods and services, with compensation paid by a buyer to a seller, or the exchange of goods or services between parties. Trade can take place within an economy between producers and consumers.
Miss
what is fisical policy?
ha Reply
fisical policy or fiscal policy?
Miss
what are.the characteristics of economic goods
Hamis
what are the importance of labour market?
Rachael
how discrib the rural development and their four stages
Sheikh Reply
ye economics se related ha
Sheikh
1..traditional stage..no science and technology is applied hence poor productionuu.2..the take off stage..some development strategies are initiated eg transport system is improved but the traditional cultural belief still remain .3..the prematurely stage..technological methods of production are appl
President
applied leading to higher GDP..4..stage of mass consumption..
President
What is Easiest Formula For National Income?
Tenzin Reply
national income/ agrrigate net value
Sheikh
what do you mean by the supply of goods
sachin Reply
supply of good refer to the total unit of production which is ready to sell at a given price
Tenzin
what is implicit cost
fuseini Reply
Yeah
MOHAMED
any cost that has already occurred but not necessarily shown or reported as a separate expense.
President
The links don't seem to be working
Scorch Reply
what is taxonomy
wise Reply
how to interprets elasticity
Joseph Reply
what is demand curve
Joseph
It is the graphical representation of quantity demand of a commodity?
Kofi
it is the graphical representation of price and quantity demanded of a commodity
Obaa
what is the difference between positive economics and normative economics.
pauline Reply
It said that positive economics studies the facts, but normative one focus on ought to be.
Mohammad
in another words normative economics focuses on what the fair situation is.
Mohammad
positive economics: wages are 10$ per hour. normative economics: wages should be 25$ per hour.
Mohammad
what is choice
Hamis Reply
what is indifference curve
Misba Reply
It is an alternative combination of consumption of two goods which gives equal level of satisfaction.
Shujjat
good morning guys.. I am Lawrence from Nigeria.. trust am welcome here..
Lawrence Reply
mashallah
Tanveer
are you ecnomist?
Noor
I am a researcher
jackie
you all are ecnomost
Noor
ohh nice
Noor
re search on economy
Noor

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Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
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