TAILIEUCHUNG - Lecture Principles of economics (Asia Global Edition) - Chapter 13

After completing this chapter, students will be able to: Describe how the Scarcity Principle applies to choices involving health, use the incentive principle to explain why health care costs have been rising so rapidly, discuss pollution taxes and effluent permits as a means to reduce the cost of improved air quality,. | Chapter 13 The Environment, Health, and Safety McGraw-Hill/Irwin Copyright © 2015 by McGraw-Hill Education (Asia). All rights reserved. Learning Objectives Use economic analysis to show how . health care system can be improved Compare and contrast the ways in which taxes and tradable permits can be used to reduce pollution Apply the Cost-Benefit Principle to improve workplace safety Show how economic analysis contributes to debates regarding public health and domestic security spending Introduction In the United States, Carter Administration proposed response to oil shocks (1979) Add 50 cents/gallon to gas tax and rebate proceeds by reducing Social Security taxes Policy would Reduce gas consumption and dependence on foreign oil Reduce air pollution Reduce traffic congestion Opponents won by arguing that consumers would buy the same amount of gas due to rebates Sound policies depend on a solid understanding of economics by politicians and voters This chapter looks at policies that increase efficiency, making it possible for each of us to have more goods and services Focus sharply on scacity and how the Cost-Benefit Principle can help to resolve the resulting trade-offs 3 Health Care Delivery In the United States, health care spending has grown faster than income Up from 4% of national income in 1940 to 17% in 2010 Part of the increase is due to improved quality of tests, procedures, drugs, etc. Part is due to the third-party payment system Growth in use of insurance for payments Employer-provided and government-provided Health Care Delivery Cost-benefit test assures efficient allocation of health care Perform a service only if the benefit exceeds the cost Costs are easy to measure Benefits are complicated Usual measure is willingness to pay marginal cost Some patients are unable to pay for basic services Society assumes some responsibility via government-provided insurance Confused by third-party payment system Health Care for the Employed Employer pays .

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