America's Free-Market Analysis

In the real world, health care markets rarely if ever achieve Pareto efficiency. The term market failure is used to cover all circumstances in which Pareto efficiency is not achieved by the market. Four causes of market failure that arise in health care are externalities, market power, public goods and information imperfections (Op. cit,

The healthcare industry in the United States has largely been a fee-for-service (FFS) mode. The healthcare industry would earn revenue by the amount of procedures, test, or visits. The downside to running a healthcare system like is that hospitals are encouraged to run unnecessary procedures or test. In economics this can be known as supplier-induced demand. However, the ACA seeks to change all of this by implementing a new model of value-based reimbursement. The value-based model is more concerned about quality outcomes verses the amount of procedures. If hospitals and healthcare providers cannot provider the better care at lower cost, there are financial penalties and lower reimbursements (Brown, n.d.). This will force hospitals and insurances companies to work together in order to ensure and ultimately create competition for Kaiser in their markets. In some recent the are been several insurance companies that trying to buy smaller

Where there is transparency, there is good accountability thereby reducing government deficit. “Its past time to require transparency of cost and outcomes, so consumers can make informed choices about their care. As patient – consumers increasingly transition to high-deductible plans and other models that increase their cost exposure, they will demand more transparency and information for the choices they need to make. However, simply having some awareness that not every hospital is performing equally well and consumers should be making informed choices is an important first step towards a true market-based healthcare system”(Rita Numerof

First is that in pay-for-performance programs like value-based purchasing, healthcare facilities pick to serve the healthiest patients, while transferring sicker patients to other hospitals so they can more easily meet quality outcomes (Chen, Chung, Lin & Lia, 2010). This could make it harder for many of the sickest patients to find care. To address of this, quality measures should be created that keep the initial risk of the patient in mind so that the hospital isn’t punished for treating sicker patients. Another unintended consequence is physician frustration for the program due to noncompliant patients. It’s been shown that when instituting a pay-for-performance payment model, physicians become increasing agitated when noncompliant patients prevent them from reaching quality measure goals (McDonald & Roland, 2009). Again, to remedy this situation the quality measures should be made to not punish providers for outcome results that are out of their control. For example, non compliant patients could be noted and their health outcome could count less towards the overall quality score. Finally, an interesting result from the implementation of this provision is that there are mixed reviews on its effectiveness in increasing quality of care (Spaulding, Zhao & Haley, 2014). My response to this result is that it takes time for hospitals to change focus from quantity to

The need to improve both the quality and the safety of health care in the United States is well documented. Traditional strategies to stimulate improvement include regulation, measurement of performance and subsequent feedback, and marketplace competition. Despite limited evidence, public reporting of hospital quality data and pay for performance have emerged as two of the most widely advocated strategies for accelerating quality improvement (Lindenauer, 2007). Quality health care is very important to both physicians and patients because in essence everyone wants to be in good health in order to live a long quality life. The United States has a lot of work to do on providing its citizens with quality health care and one such innovation,

People choose to pay a penalty rather than purchase coverage, according to Harry A. Sultz and Kristina M. Young (2014). Also Sultz and Young et al’s (2014) say the primary goal of the market is to contain costs and realize profits. The effective way of the US Health Care System is that some people are fully covered by the health care and have no problems with the cost and have the health benefits that are needed. As well as the referral the physicians may sagest for further evaluation. The strength of the US Health Care System is the benefits they can offer to the public like providing full coverage for a procedure or medication. As well as allowing the public to have health care through their employers. Sultz and Young et al’s (2014) state important advances have been made in medical science. This is beneficial to the terminal patients but for the rest of the patients they don’t receive the benefits of the medical advances. This is the weakness of the US Health Care System. The quality of care is compromise either because of the physician’s own conflict of interest or because of the medical errors that are made. Sultz and Young et al’s (2014) state the leading cause of preventable death in the US is health care errors. Also Physician who have financial connection to other health care business perform more test per patient at a higher charge than physician who have no financial

Everyday individuals who are lucky enough can go to a hospital and receive help. However in some places help is limited if finances are. Money is power and without money individuals are left to face health care with what they have in their pocket. Insurance companies may help customers with financial coverage for things such as health care. However this is only to a certain degree. Once individuals come to realization that their insurance companies cannot help them come up with sufficient funding for their treatments or procedures the hospital will only obligately stabilize the individual until money is included in the process. Hospitals are frequent offenders for fraud. Hospital professionals may choose to work together with insurance companies or they may commit fraud by upscaling coding costs. In John Q (2002). the truth is revealed to John. By the doctors purposely neglecting to disclose or propose information about extra testing to along side HMO. The hospital also gains a surplus of revenue by failing to mention low cost preventable procedures in exchange for a annual bonus and later more profitable surgeries that insurance companies will not cover. In conclusion hospitals are frequently perceived as a helping hand in society but are truly driven by power and money and are committing white collar crimes

There are several business elements of health care that are unique or perhaps define health care as a market place. One of those being the healthcare industry has never been in need of new business, the demand is already high for health care and medication. As a result of this reality, greedy pharmaceutical executives and their drug companies will practice price gouging (pricing above the market price when no alternative retailer is available), in this practice sellers spikes the prices of product and or services, in most cases, to benefit shareholders. Such action will fundamentally contribute to the drastic increase of health care expenditures, and creates inequality in resource distribution. According to Penner (2004), Market Economist defines a market as a mechanism that facilitates the efficient allocation of resources. Compared to the health care industry, traditional marketplace will not benefit from price gouging and other self-centered practice due to other competitors looking to gain consumer business: Consumers are able to find other competitors to conduct business with.

Health care competition is zero-sum in U.S due to the reason that contributors of this system are distributing the value rather than increasing it. Its focus is to reduce cost or, in few cases, avoid cost but the focus is not to improve the value intended for patients. Its competition is only to shift cost, to have more influence on trading, to steal patients and to confine choices by limiting the information provided to patients. It also restricts services and medical innovations so that hospital cost can be reduced. These types of competition reduce value through added administrative costs and lawsuit cost to settle

Free market activity legitimate point of view clarifies how costs are set for the offer of products (Principles of Microeconomics , 2000). The procedure begins with shoppers requesting merchandise. At the point when interest is high, makers can charge high costs for products.

I have tweaked my proposal a bit. I’d like to focus on the strong competition hospitals are facing from freestanding health facilities such as imaging centers, retail centers, and urgent care centers. With health care moving toward a value-based care system and payment method, independent care center have emerged. These centers promote patient consumer power within the health care system (Grube, Cohen, & Clarin, 2014). Thus, making major retail companies, imaging and surgical centers, and urgent care centers viable competitors in the health care market (Grube, Cohen, & Clarin, 2014). All of the entities compete with hospitals to offer service such as well-care services. Hospitals may find it difficult to compete with the care centers’ affordable pricing by matching more appealing prices. As patients learn more about healthcare they are empowered to decide where to go for services and how much to pay for services (Grube, Cohen, & Clarin, 2014).

For several decades, economists, policymakers, and healthcare experts have argued on the inefficiency of the healthcare industry has been insulated from the competitive market forces operating in the midst of the economy. On the contrary, the healthcare receivers continued to be uninformed of the quality of healthcare they deserve and the government policies and programs that are responsible for the maintaining the quality. In fact, there are multiple ways of improving the quality of the healthcare and decrease the cost. The competition in the market is one of the important force responsible for improving the quality of the healthcare services while reducing its cost. On the other hand, competition is unhealthy for hospital economy

Another group often blocked is complementary or alternative health care practitioners. These restrictions and the insurance industry unwillingness to pay for these services, gives the physicians an almost monopolist control over health care. Providers must be able to enter the market for competition to work and there must be many providers vying for the patient. To get the most out of health insurance plans Consolidation of hospitals and multispecialty group practices increases the negotiating leverage of the group but in certain areas of the US a single large medical system has become the sole provider of major health service thereby restricting competition (Shi & Singh, 2008). This consolidation while giving the hospitals and group practice leverage when negotiating prices of supplies and services tends to increase the price of health care to the patient because there is no longer any competition (Shi & Singh, 2008). For these reason “competition will remain less effective in most health care markets, because the prerequisite for fully competitive markets are not fully met” (Federal Trade, 2004, p. 20).

There are many different forms of competition among health care organizations. Some of them are the prices of services, different co-pays someone will have to pay out of pocket, lower premiums, they have to be competitive in the quality of the service in which they perform daily. The health care competition is being advertised every day. The competitive nature of business cause them to reach out to the community. The health care industry has to fight for the approval of the community, the government, the insurance companies, the pharmaceutical companies and of course the stake holders as well as future investors.

“Hitherto, every form of society has been based on the antagonism of oppressing and oppressed classes.” Karl Marx. The irony around the term “free market” is blatant but constantly overlooked. As inflation grows to dangerous sizes, our currency system is inevitably bound to devalue the dollar steadily until its abolishment and replacement. “Modern Money Mechanics” is an eventually failing process of loans, debt and intrest that will never balance, only worsen and decay. The most recent turning point into this economic slavery, the real estate bubble, bursted due too numerous small variables that are simply fragments of a larger equation. The monopolizing of our monetary system by the FED has thrown us uncontrollably into a downward