Costs and New Technologies in Healthcare Delivery

Costs and New Technologies in Healthcare Delivery

Marie-Christine Thaize Challier (University of Grenoble, France)
Copyright: © 2008 |Pages: 7
DOI: 10.4018/978-1-59904-889-5.ch039
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Reducing medical costs is one of the major policy questions. A well understanding of this issue requires specific insight into some domains. The three main points which must be clarified relate to: (1) the nature of the costs (production costs and transaction costs), (2) the nature of new healthcare technologies (the biotechnology and biomedical engineering vs. the e-healthcare system, the face-to-face communications between the primary care physicians or other providers and the patients vs. the non face-to-face communications), and (3) the nature of information (which can be asymmetric, incomplete, or imperfect). This article studies what differences there are when considerations about informational issues and types of medicine are taken into account in the modern health economy characterized by the generation and the implementation of new healthcare technologies. To do this, this article first clarifies and presents some concepts in the framework of the health economy. Then, from these issues, it discusses the cost containment in the current case of the development and adoption of new technologies, and contrasts the opinions and perspectives.

Key Terms in this Chapter

Transaction Costs: Costs incurred in making an transaction. They include costs of coordinating (search, communication, decision, enforcement costs) and costs of motivating (opportunity costs).

Curative Medicine: Actions and treatments correcting a harmful or troublesome situation.

Diagnostic Medicine: Act or process of identifying the cause and nature of the illness by its signs and symptoms.

Agency Relationship: Situation in which one party relies on another party to make decisions.

Preventive Medicine: Act of protecting, promoting, maintaining health, and preventing disease.

Moral Hazard: In economic theory, moral hazard refers to the postcontractual opportunism that results from an asymmetric information. It occurs when the actions contractually required are not freely observable; for example, a party takes an inappropriate action or decision that can affect the outcomes of the contract. In insurance, moral hazard refers to the tendency of people to change their behavior when they are insured; it does not induce the insured to protect him/herself from the risk.

Copayment: The fixed partial payment that a subscriber to a medical insurance must pay for the use of a medical service covered by his/her insurance company.

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