<< Chapter < Page Chapter >> Page >

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

how to find shut down
Sowmya Reply
what are the alternatives various of economic system
olaleye Reply
what is microeconomics
Ayedun
Micro-economics refers to the branch of economics which deals with smaller unit or element of the economy.
Amadu
or Is the study of individual economic unit in a economy..
Neriel
micro economis is the studay of how Households and firms make decision and they interecr it.
mahad
what is financial intermediaries?
Imran Reply
financial intermediaries are those who are link between borrowers and lenders for.eg bank... Bank is a financial intermediary
Ajit
tnx a lot of u
Imran
most welcome
Ajit
why do you here ? why do you want to learn economics
Ajit
والله العظيم انا ماعاوز اتعلمها
انا باخدها غصب عني في الكليه حضرتك
لس كدااا
I am student of ecnomics ,
Imran
Imran
Abdi
yes Abdi temam
Imran
am good too see you
Abdi
tnx why not
Imran
b/c im student
Abdi
great, now I am sleeping see u nex time ok
Imran
ok
Abdi
OK
Ajit
what is the law of dimis
Toyin Reply
what is the feature of public ownership of production factors
Toyin
what is the demand for commodity that posses identical utilities called
Toyin
law of diminishing utility...as the quantity consumed of a commodity increases,the utility derived from each successive unit goes on decreasing... condition___ consumption of other commodities remaining the same.
Malik
sorry it's...Law of diminishing marginal utility
Malik
demand for commodities that posses identical utilities? The commodities having identical utilities are perfect substitutes...and the demand for such type of commodities is called "Competitive Demand".
Malik
thanks
Toyin
Why many people can't differentiate Economists and financial analysts
Hatimu
what is the function of the central bank in an economic?
Toyin
the central bank may lend some money to banks if necessary
konglan
what economics
Toyin Reply
Is this a question?
Tala
is the study of how societies allocate and manage their scare resources
Neriel
What is populatiin
Azer Reply
Population is a number of people living in a particular area within a particular time
Rabby
Population is the number of people living in a particular geographical area within a particular time
Rabby
how does this chat work
Dalaya
ya the ideas are good thanks friends
South
so what's the next question?
South
what is demand schedule
Toyin Reply
is a tabular representation of the quantity demanded of a particular product at a particular price over a given period of time
Loveth
thanks
Toyin
you are welcome
Loveth
ok
Hassan
What is Monetary Mass
Acha Reply
who is product of traditional economy
jamal Reply
what is elasticity
Suqlain Reply
change in quantity due to change in its price
sj
degree of responsiveness of quantity demanded or supplied due to price.change
Loveth
The law of demand and supply
RICHARD Reply
Law of demand...keep other things constant when price of commodity increases demand is decreases n price decreases demand increases.
sj
law of supply.. keep other things constant when commodity prices increase supply is also increased n price decreases supply is also decreased.
sj
Wow
RICHARD
Thank you
RICHARD
when prices increases causing demand curve to shift to left holding other variables constant.
Amos
what is the difference between quantity demanded nd price
Survival Reply
what is the difference between quantity demand and price
Md
There is an inverse relation between price and the quantity demanded...with the increase in price of a commodity, the demand for the commodity decreases and vice versa..
Malik
professor lionel Robbins define economics as a
ISAAC Reply
as the science that studies human behavior as the relationship between earn and scarce means which has alternative uses
Akon
study of wealth
Suqlain
explain the help of a production possibility diagram how the opprtunity cost of producing different combinations of goods
Leethwinna Reply
what is the measurements of elasticity
Nessa Reply
?
Ateh

Get the best Principles of economics course in your pocket!





Source:  OpenStax, Principles of economics. OpenStax CNX. Sep 19, 2014 Download for free at http://legacy.cnx.org/content/col11613/1.11
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'Principles of economics' conversation and receive update notifications?

Ask