Lecture: Role of Government Chapter 19 Outline

Lecture: Role of Government

• Chapter 19

Outline

• Types of Government Intervention
• Types of Goods
• Reasons for Public Intervention
• Government Failure

Recap

• Last time talked about market failure
• Markets are problematic in health care because
• Don’t provide goods efficiently
• Don’t provide good equitably

Types of Government Intervention

• Inform: or persuade consumers/providers/suppliers to act in a certain way.
• Publicize health risks (smoking)
• Disseminate information on disease patterns (swine flu), or risks of medical procedures.

Types of Government Intervention

• Regulation: determines how a private activity may be undertaken.
• At extreme gov’t can prohibit goods or activities.
• Setting standards for doctors and drug trails
• Regulate insurers to provide certain interventions.
• Includes mandates: obliges someone to do something, and (usually, though not always) pay for it.
• E.g. employers of a certain size must provide health insurance, children must be immunized at schools

Types of Government Intervention

• Regulation and mandates appeals to legislators
• b/c tackles problems without incurring government spending.
• Affects spending of those that are regulated e.g. two day hospital days after delivery.
• Finance: health care with public funds.
• Delivery can still be public.

Types of Government Intervention

• Provide: or deliver health services using publicly-owned facilities and civil service staff.
• Usually publicly financed and provided
• More typical of developing countries
• Developed countries usually provide a lot of autonomy if publicly provided (crown corporations).
• Taxes/subsides on goods e.g. cigarettes
• With diabetes increasing so quickly should certain foods be taxed more?