Demand and Supply of Health Insurance by Mwimba Chewe - Department of health policy and management University of Zambia - Health Economics HSM

Description

This set of university notes provides a detailed analysis of the core economic principles governing health insurance markets, authored by Mwimba Chewe from the Department of Health Policy and Management at the University of Zambia for Health Economics HSM. It serves as essential tertiary revision material for students in health sciences, economics, and public health programs, covering foundational concepts such as the definition and desirable features of insurance, key terminology including premiums, deductibles, coinsurance, and exclusions, and the distinction between public schemes like Zambia's NHIS and private insurance. The material delves into the economics of risk and uncertainty, explaining expected value, actuarially fair insurance, and the critical role of risk aversion driven by the diminishing marginal utility of wealth. It methodically explores the demand side by modeling how individuals determine optimal insurance coverage by equating marginal benefits and costs, and examines the supply side under conditions of perfect competition to derive the competitive premium formula. The notes also address critical market phenomena like moral hazard, which leads to increased service utilization when insurance lowers out-of-pocket costs, and adverse selection. Practical examples and references to Zambian insurance schemes contextualize the theories, making it a vital resource for diploma and degree students preparing for exams on healthcare financing and insurance economics. Review these comprehensive notes to solidify your understanding of health insurance demand and supply dynamics