CH.13 TECHNOLOGY AND THE PRICE OF HEALTH CARE
CH. 13 TECHNOLOGY AND THE PRICE OF HEALTH CARE
Health care costs are rising Health care costs have increased faster than inflation for decades ▣1960： the typical American spent 1/20 of her income on medical care ▣2010： 1 in every 6 dollars of the American economy is spent on medical care This amounts to a total of $2.6 trillion and $8,402 per person Bhattacharya,Hyde and Tu-HealthEconomics
Bhattacharya, Hyde and Tu – Health Economics Health care costs are rising Health care costs have increased faster than inflation for decades 1960: ◼ the typical American spent 1/20 of her income on medical care 2010: ◼ 1 in every 6 dollars of the American economy is spent on medical care ◼ This amounts to a total of $2.6 trillion and $8,402 per person
Health care expenditures over time 6 14.000 13.000 54821 12.000 11.000 10.000 9.000 8.000 7.000 098 6.000 5.000 4.000 3.000 7 2.000 1.000 0 1960196419681972197619801984198819921996200020042008 Year ---Health exp.as GDP -GDP (billion$周 Figure 13.1.Health care expenditures as a proportion ofUS GDP 1960 to the present Source:Data from OECD Health Data 2012-Frequently Requested Data.OECD(2012)URL:http://www.oecdong/ Bhattacharya,Hyde and Tu-HealthEconomics
Bhattacharya, Hyde and Tu – Health Economics Health care expenditures over time
What are health care costs? When we speak of "health care costs,"we really mean total health expenditures Equation for medical expenditures E: E=P·Q E is expenditures on medical care P is the price of medical care Q is the quantity of medical care Bhattacharya,Hyde and Tu-HealthEconomics
Bhattacharya, Hyde and Tu – Health Economics What are health care costs? When we speak of “health care costs,” we really mean total health expenditures Equation for medical expenditures E: E = P · Q ◼ E is expenditures on medical care ◼ P is the price of medical care ◼ Q is the quantity of medical care
E=PXQ Hypotheses to explain rising expenditures: Prices have increased Quantity demanded has increased Technological innovations and technological overuse Rest of this chapter explores each one of these hypotheses Bhattacharya,Hyde and Tu-HealthEconomics
Bhattacharya, Hyde and Tu – Health Economics E = P x Q Hypotheses to explain rising expenditures: Prices have increased Quantity demanded has increased Technological innovations and technological overuse Rest of this chapter explores each one of these hypotheses