Table of Contents
1. CO-INSURANCE:
- Coinsurance is usually a percentage, and represents the percentage of medical cost that an individual will need to pay on the total cost.
- If a person has 80/20 coinsurance on the insurance plan, it means that the insurance company will cover 80% of the medical cost and he/she is responsible for paying the other 20%.
- Coinsurance is the sum, usually stated as a fixed percentage.
- Coinsurance also relates to the level of insurance that an owner needs to buy for the coverage of claims.
2. CO-PAYMENT:
- A co-payment is a fixed sum paid by a patient for getting a specific health care facility.
- Co-payments are similar to deductibles; in that it is usually a fixed amount of money clients/patients have to pay each time they need to use their insurance plan.
- Unlike deductibles, co-payments tend to be smaller dollar amounts and usually are applied on a per visit basis.
- A co-payment is a fixed amount a health care receiver pays, normally after having waged a deductible. In some cases, there is certainly no deductible an individual has to pay first, just a co-payment.
3. DEDUCTIBLE:
- A deductible is usually a fix dollar amount that an individual has to pay out of his/her own pocket before the insurance will cover the remaining eligible expenses.
- Depending on the insurance plan, the deductible can range from $0 all the way up to thousands of dollars.
- As a rule of thumb, the higher the deductible the lower the premium (price to buy the plan), and vice versa.
4. DEMAND:
- Demand refers to need to buy or devour something.
- In Economics, demand not only refers to the wish of a person but also incorporates the capability and enthusiasm to buy certain things or facilities.
- It means a consumer must have a desire, capacity to pay for an artifact or service and willingness to pay for it.
- How much of a good a consumer is ready to buy at a certain price, holding other things constant?
5. ECONOMIC EVALUATION:
- Economic evaluation is the comparative analysis/evaluation of two or more interventions in terms of their cost and consequences.
- For more details, please refer to: https://publichealthnotes.com/economic-evaluation-types/
6. HEALTH INSURANCE:
- Health insurance is a form of insurance coverage that covers the cost of an insured person’s health, medical and clinical/surgical expenditures.
7. INDEMNITY PAYMENT:
- Indemnity refers to creating compensation payments to one concern person by the other for the damage arose.
- Indemnity is centered on a common contract among two parties (one insured and the other insurer) where one assures the other to pay costs for the loss in contrast to expense of premiums.
8. LAW OF DEMAND:
- The law of demand states that; the higher the price of a good the lower the quantity demanded
- The law can be described in the following manner. “Keeping other things constant, a fall in price leads to an expansion in demand and a rise in price leads to a contraction in demand”.
- If price increases, quantity demanded decreases.
- If price decreases, quantity demanded increases.
9. LAW OF SUPPLY:
- The law of supply can be stated as “by keeping other factors constant supply expands with a rising in price and contracts with fall in price”.
- Keeping everything constant; as the price of a good increases, the quantity of the good offered by a supplier increases and vice versa.
- Price increases, quantity supplied increases
- Price decreases, quantity supplied decreases
- The law of supply reflects the general trend of the manufacturers in proposing their stock of a product for sale in relation to the changing prices.
- It has been perceived that normally sellers are willing to supply more with a rising in prices. The supply differs directly with the changes in price.
10. MORAL HAZARD:
- Moral hazard refers to the additional health care sought/taken by the person once he/she gets insured.
- It includes the cost spent by the person on health care that he/she would not have spent if he/she was not insured. For e.g.: spending additional day in the hospital or taking extra tests than recommended
- It ascends when both parties have inadequate evidence and trust on each other.
- Moral hazard is habitually misjudged or altered in the health insurance business.
- Some people also claim that health insurance itself is a moral hazard as it lessens the risks of following an unhealthy daily life or extra hazardous behavior.
- There are basically two different types of moral hazard:
a) Ex post moral hazard
- Over utilization of services as third party is paying for healthcare.
b) Ex ante moral hazard
- Change in behavior- Increase in probability of illness and consequently increase in utilization
11. SUPPLY:
- The amount of a good, a producer/seller is ready to sell at a given price, holding other things constant.
12. UTILITIES:
12.1 Total Utility
- Total utility (TU) is the total satisfaction derived from the consumption of goods and services.
12.2 Marginal Utility
- Marginal Utility (MU) is the additional utility arising from the consumption of an additional unit of the goods or services.
12.3 Expected Utility
- Expected utility is a predicted utility value for one of several options, calculated as the sum of the utility of every possible outcome each multiplied by the probability of its occurrence.
References and For More Information:
https://www.healthaffairs.org/doi/full/10.1377/hlthaff.23.5.194
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6128379/
https://www.medicalnewstoday.com/articles/323367.php
http://www.sgrrits.org/pdf/e-content/management/DEMAND-AND-SUPPLY-IN-HEALTH-CARE.pdf
https://economictimes.indiatimes.com/definition/moral-hazard
https://www.investopedia.com/ask/answers/051415/what-difference-between-copay-and-deductible.asp
https://www.investopedia.com/terms/c/coinsurance.asp
https://economictimes.indiatimes.com/definition/indemnity
