Article 2
Getzen’s Health Economics & Financing, 5th Edition
Copyright © John Wiley & Sons, Inc.
Chapter 13: Macroeconomics of Medical Care
QUESTIONS
Does inflation affect health care spending? If so, does it affect health care spending permanently or temporarily?
How does a person decide what is the right amount to spend each year on health care?
How does a nation decide the right amount to spend on health care?
Is community health the same as individual health?
Why do general tax revenues pay for so much personal health care? Who will pay if (when?) the Medicare trust fund runs out of money?
QUESTIONS
Which is more important in determining how much to spend on medical care: how sick people are or how much money is available?
Do price controls work? If not, why might people think that they do?
Do professional licensure, third-party reimbursement, and nonprofit organization make it easier or harder to adjust health care spending to changes in prices?
What determines wage levels in the health care industry?
Is it easier to adjust to growth or to a recession?
13.1 WHAT IS MACRO?
- Micro and Macro Perspectives on Spending
13.2 THE CONSUMPTION FUNCTION
- Consumption + Savings = Income
Total Consumption Total Production +
of all people globally = +amount saved for next year -
- amount taken from storage
- For services and perishables:
Total Production = Consumption + Investment .
13.2 THE CONSUMPTION FUNCTION cont.
Income Elasticity =
% change in Expenditure
% change in Income
13.2 THE CONSUMPTION FUNCTION (cont.)
- The Permanent Income Hypothesis
- Shared Income
- Public and Private Decisions
- Budget Constraints: Borders that Matter
13.3 ADJUSTING TO CHANGE: DYNAMICS
- Permanent Income and Adjustment of Health Spending to GDP
- Adjustment to Inflation
- Adjustment to GDP: Rates of Change and Time Series Analysis
13.4 FORECASTING FUTURE HEALTH EXPENDITURES
13.5 COST CONTROLS: SPENDING GAPS AND THE PUSH TO REGULATE
- Capacity Constraints and Budget Constraints
13.6 WORKFORCE DYNAMICS: “SPENDING” IS MOSTLY LABOR
- Employment
- Wages
Copyright 2013 John Wiley & Sons, Inc.