Q Module Five assignment 09232023
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Purdue University *
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Course
N678
Subject
Health Science
Date
Dec 6, 2023
Type
docx
Pages
3
Uploaded by chang541
Running head: MARKET FOR HEALTH INSURNACE
1
a.
Moral Hazard: This term denotes increased risk-taking or service overuse when individuals
are insured, as they bear only a fraction of the costs. In healthcare, it results in excessive
consumption of services, raising costs for insurers and potentially limiting care availability.
b.
Adverse Selection: Adverse selection happens when higher-risk individuals are more likely
to buy insurance, leading to an imbalanced risk pool. It's vital in medical markets, potentially
causing higher premiums, limited coverage, and market instability.
c.
Asymmetric Information: This concept involves one party having more information than the
other, often seen in healthcare where individuals know more about their health than insurers. It
can lead to adverse selection and moral hazard, affecting market efficiency.
d.
Third-Party Payers: Insurance companies, managed care organizations or government
programs
cover the costs of healthcare services for patients. They play a key role in facilitating
access to healthcare; but may also contribute to moral hazard by reducing patients' direct
financial responsibility, possibly resulting in service overuse.
8/2
Health insurance can lead to the overuse of healthcare services through the phenomenon of
moral hazard. When individuals have health insurance, they often pay only a fraction of the total
cost of medical care, either through premiums or copayments. This reduced financial burden can
lead to several behaviors that contribute to increased healthcare utilization, reduced consideration
of costs, and a preference for higher-cost treatments (Henderson, 2023).
Regarding poor diets and little exercise, health and prescription drug insurance may
indirectly contribute to such behaviors. If individuals know that they can receive medical
interventions to manage the health consequences of an unhealthy lifestyle, they may be less
motivated to maintain a healthy lifestyle. This can result in higher healthcare costs and poorer
health outcomes.
Measuring the inefficiency resulting from these behaviors can be challenging but not
impossible. Researchers can examine healthcare costs, health outcomes, and preventive care
utilization to better understand the impact of health insurance on healthcare utilization and
lifestyle choices. An analysis of healthcare spending patterns among insured individuals
compared to uninsured individuals can provide insights into overutilization. Studies assess
whether insured individuals with certain conditions (e.g., diabetes) are more likely to engage in
unhealthy behaviors due to the perception of medical intervention as a safety net; moreover,
research investigate whether insured individuals are less likely to engage in preventive behaviors
(e.g., exercise, healthy diet) due to reliance on medical interventions (Pera et al., 2021).
8/3
Dealing with the conflict between genetic predisposition and insurability is a complex
ethical and policy issue. One major consideration is genetic discrimination, where individuals
may avoid genetic testing due to fears of insurance coverage loss. Denying insurance to those
with genetic predispositions can limit their access to essential healthcare services and disrupt risk
pools, potentially leading to adverse selection and market instability (Tiller et al., 2023).
Ethically, many argue that it's unjust to deny coverage based on unchangeable genetic factors.
Potential solutions are proposed as anti-discrimination policies, risk pooling mechanisms,
investments in public health, and providing genetic counseling to inform individuals about
genetic testing and insurance implications.
Ultimately, striking a balance between individual insurability and genetic information is a
matter of public policy and ethical consideration, with the aim of promoting equitable access to
healthcare while managing the sustainability of insurance markets.
Running head: MARKET FOR HEALTH INSURNACE
2
References
Henderson, James W. (2023).
Health Economics and Policy
. Cengage Learning.
Pera, M. F., Cain, M. M., Emerick, A., Katz, S., Hirsch, N. A., Sherman, B.W., Bravata, D. M.
(2021). Social determinants of health challenges are prevalent among commercially
insured populations.
Journal Primary Care Community Health, 12
, 1-10. DOI:
10.1177/21501327211025162.
Tiller, J., Bakshi, A., Dowling, G., Keogh, L., McInerney-Leo, A., Barlow-Stewart, K.
Boughtwood, T.,
Gleeson, P., Delatycki, M. B.,
Winship, I., Otlowski, M., & Lacaze, P.
(2023). Community concerns about genetic discrimination in life insurance persist in
Australia: A survey of consumers offered genetic testing.
European Journal of Human
Genetics
,1-9.
https://doi.org/10.1038/s41431-023-01373-1
References
Galvani, A. P., Parpia,
A. S., Foster,
E. M., Singer,
B. H., & Fitzpatrick, M. C.(2020).
Improving the prognosis of health care in the USA.
Lancet, 395
(10223), 524-533. DOI:
10.1016/S0140-6736(19)33019-3.
Getzen, T. E. (2000). Health care is an individual necessity and a national luxury: Applying
multilevel decision models to the analysis of health care expenditures. Journal of Health
Economics, 19(2), 259-270. https://doi.org/10.1016/S0167-6296(99)00032-6.
Running head: MARKET FOR HEALTH INSURNACE
3
Yang, L. H., Wong,
L.Y., Grivel, M.M., & Hasin,
D. S. (2017). Stigma and substance use
disorders: an international phenomenon.
Current Opinion in Psychiatry, 30
(5), 378-388.
DOI: 10.1097/YCO.0000000000000351.
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