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健康保险市场中的逆向选择与道德风险

时间:2016-09-02 19:44来源:www.ukassignment.org 作者:cinq 点击:
健康保险市场中的逆向选择与道德风险
Adverse selection and moral hazard in the health insurance market
 
在自由竞争的情况下,大多数商品在市场上可以有效地分配资源。然而,这种在医疗市场的竞争机制,可能会导致伦理问题和效率低下。通过我们的研究,市场失灵可以归因于以下原因。
当某个经济体的福利(效用或利润)被另一个经济体的作用所影响时,外部性是存在的。在一定的卫生保健中,人们可以从其他人的消费中受益,这会导致医疗保健的社会边际效益高于个人。随后,减产问题就会出现。
保健是显着不同于普通商品,如食品和衣服,因为我们不知道我们需要什么,我们需要多少钱。随着对不确定性的反应,市场倾向于发展保险,这使人们更好地通过减少不确定性。
 
In the circumstance of free competition, the resources can be allocated efficiently in the market for most commodities. However, such competition mechanism in health care market can lead to ethic issues and inefficiency. Through our research, market failure can be attributed to the following reasons.
 
Externalities is present whenever some economic agent's welfare (utility or profit) is 'directly' affected by the action of another agent in the economy (176,H,D). In certain health care, people can benefit from others' consumption, which will result that the social marginal benefit of health care is higher than the individual. Subsequently, the problem of underproduction will arise.
 
Adverse selection and moral hazard in the health insurance market
Health care is significantly different from common commodities such as food and clothes, since we don't know when we need and how much we need pay. With response to the uncertainties, the market tends to develop insurance, which makes people better off via reducing the uncertainties.
 
Problems specifically adverse selection and moral hazard inevitably exit in the market. Adverse selection is caused by the asymmetric information between the insurance company and the consumers, inducing high insurance fees. Nonetheless, people in low risk will be driven out of the market.
 
Another problem is the moral hazard. When people have insurance, they tend to be less careful about their health status increasing their demands of health care service.
 
The patients with insurance will demand more health care resources than they actually need, which will cause a welfare loss.
 
Assume that marginal cost is constant. The amount of health care that should be provided is Q1, where marginal cost equal to marginal benefit. However, because of the excess demand of patients, Q2 will be provided. And the shaded area represents welfare loss.
 
The information asymmetry between patient and doctor: agent problem
In health care market, the relationship between the doctor and patient is much different from the normal buyers and sellers. The patient is there to give the doctor all the information t doctor needs in order that the doctor can make a decision, and the patient should then implement that decision once the doctor has made it (CD, 45 Williams). As a result, patients' consumption largely depends on the doctor. Therefore doctors have an incentive to make patient consume more in order to make more profit. Hence overproduction occurs.
 
Monopoly
With respect to two reasons, the certain hospitals in some areas can easily achieve local monopoly. Firstly, People in one community may have only one choice of the hospital or doctor for others far away from their living areas. Secondly it is the natural monopoly. Because of the contradictory between the high fixed cost and the confined demands, only one hospital can make profit.
 
Part 2: Perception from the U.K. market
For the health care, the resource cannot be allocated efficiently in the free market. Government interventions play an essential role in providing the health care. In order to cope with such flaws, the UK government established NHS providing the civil with the health care.
 
Monopoly power of hospital: Before making the purchasing decisions, buyers always want to compare between goods and service provider with different calibrations. Since free market will induce the complicated management, which had little relationship with the opportunity cost, government will pull the free-market price, with the mandatory power, to the more preferable price where price equals average cost, at which point, the pricing behaviour finally strikes to more consumer surplus.
 
If the health service market is in the state of monopoly, where there is only one provider in the whole facet, in order to realize maximization of the profit, the monopolist will choose the point M() to produce the product in the market, in which consumer surplus is . However, since the NHS is such product that has the properties of public goods, the government itself would ensure that the NHS covers all the groups in need. In consequence, government intervention would drag the production point from M() to C(), where the consumer surplus becomes larger than the previous one, by doing so more public groups will enjoy the benefits of the National Health Service.
 
As mentioned above, in the free market, the health care will be underprovided because of the externality. However, in UK, if the authorisers know the exact amount of health care maximizing the social benefit, they would constrain adequate health care within budget of NHS to provide. Budget constrain determines the quantity of resources available for the NHS and thus explicitly setting the maximum amount of health care available to NHS patients as a whole. As showed in the graph, we assume the marginal cost is constant. L2 represents the individual marginal benefit, L1 the marginal benefit of the others people, and L3 the social marginal benefit, namely the sum of L1 and L2. People will consume at point A. However, the social optimal point is B where social marginal benefit equals to marginal cost. As a result, only if the authorisers have the enough information at point B, they would provide proportional budgets for the health care NHS could offer.
 
Excess demand due to moral hazard:
In insurance-based health care systems, the problem of potential 'excess' demand exists because of what has become known as 'moral hazard', which has consumer side and supply side. From the consumer aspect, moral hazard in health service comes on the unbalance between the benefit and cost for treatment.
 
In Britain, NHS is free so that there would be almost zero financial cost but benefit, at the same time, still there. In other words, some would require further and better treatments to make them more healthy though they were not really in bad condition.
 
Although the existing of moral hazard cannot be suspended immediately, the NHS still does try to reduce it. The famous one is a system solution: doctors decide who needs treatment. As mentioned, NHS is a system classified and the ground floor is GP. Particularly, GPs act as both a guide( to the appropriate specialist) and as a filter. In other words, patient would not be able to have further treatment without the permission of his GP. The exist of GP reducing the risk of moral hazard for information asymmetry. This helps overcome the problems of consumer ignorance and provides a means of controlling the level of demand.ï‚­
 
Agent problem:
In NHS system, all the GPs and doctors are employed by the government. The aims of the hospital are not to make a profit. Doctors will either be under the contract to the NHS or be salaried, they have no financial incentive to induce patients to consume more health care. Additionally, the separation between the doctors' payment and endowment would increasingly overcome the agency problems.
 
Problems of the NHS:
Firstly, low efficiency:
If the government intervenes much more than it should in the situation, undoubtedly, the authorities are running the risk of dragging effective motivations down. Because of the mechanism that the doctors will either be under the contract to the NHS, doctors in such government-owned institutions needn't worry to make a profit. In consequence, hospitals tend to have long waiting queues. Inadequate to cope with the booming amount of the patients long for free and partially non-urgent treatment, market will remain in low efficiency. The richer group in society will choose the "private" wards. On the other hand, those who had no enough money had to wait in a long queue for their wards at NHS. Indispensably, low efficiency would influence the quality of the system rendered towards the NHS.
 
Underproduction or overproduction of health care:
Because that the central planner controls the supply health care through the budget of the NHS, the health care has a risk of underproduction or overproduction. If the central planners were well-informed with the consumers' demand, they will provide as much health care as what can maximize the social optimal. In effect between central planner and patients the asymmetric information makes it unlikely to provide the health care at the exact amount.


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