It would be extremely easy to point our fingers at the smokers, alcoholics and obese for the increasing strain on resources and finances regarding healthcare, however, there are numerous economic and moral implications of this belief that this essay will explore. In 2015/16, NHS expenditure surged to £117,229 bn with a rising prediction of £120,611bn in 2016/17 (NHS Confederation, 2016). A major proportion of the expenditure is designated for tackling poor health problems - a consequence of drinking, smoking and poor diet costing the NHS more than £11bn a year (BBC News, 2016). Rising demand for healthcare accompanied by a lack of supply and under-funding has drained the finite resources to ‘breaking point’ as warned by the British …show more content…
The free-market environment provides the ability for people to exercise their preferences for different goods and services. It helps to motivate firms to adjust their supply dependent on the consumer preferences through allocative efficiency and firms to become as efficient as possible to survive the competitive market. Firms are encouraged to compete for the highest quality of care creating incentives into research and development for better and new treatments. Therefore, greater investment into capital goods to help boost the productive proficiencies in supplying high- quality healthcare for consumers. However, there are also noticeable flaws with a free-market system through the existence of imperfect information that consumers could choose decisions dependent on the authority of a person and not the appropriate choices. Healthcare is a personal choice and does not rely on the experience of others, therefore there is a risk of asymmetric information that consumers cannot judge the quality of their purchases and select undesirable choices. Some may argue that price signals could be implemented in a way to encourage consumers to evaluate their purchases and weigh up the benefits versus costs, but we must remember healthcare is neither a commodity or a luxury service. Over-consumption of healthcare is unwanted but under-consumption is a negative risk too that if individuals become solely focused on their needs; the positive
There is a move from a noncompetitive insurance environment to a competitive one because the competition was not by hospitals to provide the best and cheapest care, but rather among the insurers to get the healthiest patients. Consumer driven plans are central to the process because they are ideal for risk selecting the young and fit who have been driven to new plans. Healthy people could watch their account balances grow which leaves the truly sick behind in traditional plans. This particular type of competition is being used to attract the healthy and in turn lead to price increases because insurers have little incentive to control the prices medical providers are charged. It is the responsibility of the patients to worry about the cost and the patient does not have the same power as the insurance competitors do. According to a key South African regulator, Alex van den Heever of the Council for Medical Schemes, “Competition based on the shifting of risk
The economics of healthcare is not at all simple. What you put in is certainly not necessarily indicative of what you get out, as shown by the striking discrepancy between what we pay and what we get out of our healthcare system. This is demonstrated further by comparing our system to those of France and Italy, who come in first and second, respectively, in WHO’s international ranking of healthcare systems (“World Health Organization’s Ranking of the World’s Health Systems”). Counter to what many Americans may believe, a number of European nations do not have completely socialized medicine.
Having access to quality healthcare is major part of one’s life however the cost of care has been on the rise over the past decades and continue to rise every day due to many situation such
The National health services (NHS) provides a comprehensive healthcare services across the entire nation. It is considered to be UK’s proudest institution, and is envied by many other countries because of its free of cost health delivery to its population. Nevertheless, it is often seen as a ‘political football’ as it affects all of us in some way and hence everyone carry an opinion about it (Cass, 2006). Factors such as government policies, funding, number of service users, taxation etc all make up small parts of this large complex organisation. Therefore, any imbalances within one sector can pose a substantial risk on the overall NHS (Wheeler & Grice, 2000). This essay will discuss whether the NHS aim of reducing the nations need
Do you smoke, drink or have diabetes? All self inflicted have a massive drain on the NHS. They spend £750m a year on drugs to treat lifestyle diseases and from 2006 the percentage has increased, also treating and all of its complications, diabetes costs £14 billion a year to treat. It is hard to draw the line at what is self inflicted and what isn’t. People need to become more aware at what there doing and how it effects others.
The National Health Service founded in 1948 is based on three principles which issue the key aspects of providing healthcare to all no matter how rich or poor they are and providing a service designed to diagnose, improve and treat both physical and mental health. Should the NHS go against its main principles and values of promoting equality through the services it provides and possibly denying treatment for tobacco users. “ It is estimated that around 460,000 adult admissions to NHS hospitals in England every year are due to smoking. Treating diseases caused by smoking costs the NHS more than £5 billion per year, about 5 per cent of its annual budget, despite the fact that smoking is preventable and treatable” This issue with the scarcity
Supply and demand forms the most fundamental concept of economics. Whether you are a teacher, farmer, medical supply manufacturer, doctor or simply a consumer the fundamental foundation of supply and demand equilibrium is incorporated into the daily behaviors of our society. Consumers naturally look for the lowest price, while producer are influenced to expand outputs at greater cost. This is the same phenomenon in healthcare. With congress enacting the Affordable Care Act, many are seeking out the cheapest form of insurance, while at the same time wanting the greatest benefits.
Additionally, scarcity affects how people view health care in a general sense. Many critics of the Affordable Care Act maintain that it creates a new increase in overall healthcare expenditures (Barr, 2011). Yet while addressing this issue of access, it also raised new questions about costs in the short term (Barr, 2011). It is very difficult to convince consumers that a rise in price in the short term will be beneficial in the long term. The ACA tampered with the set health ‘square’ by increasing access for all Americans. It
One of the top major issues in this 2016 presidential election between the Democratic Nominee Hillary Clinton against, the Republican nominee Donald Trump is, how make The USA Healthcare system more effective and efficient while reducing cost. Both Presidential candidates have suggested distinctly different proposals to reform current US healthcare system known as The Patient Protection and Affordable Care Act which is, a comprehensive health care reform law enacted in March 2010 by President Obama. Mrs. Clinton agenda is to work within the existing ACA framework, furthermore she proposed additional policies intended to expand coverage, and reduce consumer out-of-pocket costs for individuals. Contrary to Hillary’s proposal, Mr. Trump’s agenda is to completely repeal Obamacare Act, and replace it with Market-Driven Health Care System also known free Market approach, as well as inclusion of patient-centered health care system principles. Numerous economist that analyzed Trump’s proposals come to conclusion, that healthcare market is fundamentally different from other industries, and cannot function efficiently and effetely in a traditional marketplace, because the differences factors which effects the demand and the supply side in economics of healthcare industry. This market have Unique Feature, such as, uncertainty and information asymmetries, furthermore adverse selection and moral hazard issue will get worse, also the spending for individuals as well as government in
Some major reasons that a free, unregulated market in medical care might night be optimal are: Imperfect information, asymmetric information, barriers to entry, and third-party payers.
In the case of Australian healthcare, subsidization results in less competition in the market since ‘artificially’ low prices act as a barrier to entry of new more efficient firms. Lack of competition leads to firms not improving their systems and practices, making them inefficient. Consequently, subsidized Medicare also fails to achieve social interests-explain what medicare is more properly. Recently, there have been complaints regarding the poor quality of care in hospitals. Further, the waiting periods for patients waiting to undergo Knee Replacement Surgery is a median of 216 days thus decreasing their living standards. Similarly, the Pharmaceutical Benefits Scheme is failing to provide cost-effective medications. For example, Atorvastatin, highly prescribed drug, costs $2.01 in New Zealand compared to $38.69 in Australia causing a loss of 1.3 billion dollars every year. Therefore, government intervention has led to inefficiency in the workings and resource allocation.
Lifestyle choices such as smoking, drinking alcohol, poor diet and lack of physical exercise have many diseases associated with them. In 2006-07, patients with these diseases cost the NHS a combined total of £18.4bn (Scarborough et al. 2011). If the NHS limited treatment to these groups of people, it would be able to invest this money into other areas of need. This could lead to improved facilities for people who become ill through no fault of their own.
A free market alternative offers individuals the opportunity to have a say in their healthcare coverage. Insurance companies have certain needs and interests that will never line up with consumer needs and interests. Insurance companies are rapidly increasing the cost of healthcare. At the same time they are lowering the coverage of healthcare. There is nothing worse than becoming seriously ill and then receiving an unexpected bill from your provider. The current health system that we now have continues to leave millions of Americans uninsured or underinsured. Free market health care would reduce the costs based on competition and could potentially lead to an improvement in the efficiency of the health care system. Although there are many debates in regards to a free market alternative, it would drive costs down. A free market will only work when the consumer can use buying power to influence the price and quality of goods. There will never be a perfect health system that will please each and every person. However, with such a huge debate regarding today’s healthcare system, consumers deserve to have a say in the type of healthcare coverage that they are being forced to have or risk being
Economics affected the healthcare industry both national and international due to the cost of healthcare not being simplistic due to the difficulty that it entails to itemize the services that is provided (Scott, Solomon, and McGowan, 2011). In addition Scott et al (2011), reported that the effective use of resources are the determinant factor for the allocation of funds, whether it is diverted towards infection control or antibiotics effectiveness. Economics is determined by Scott et al (2011) as behavioral science which is divided into two humanistic behavior, the first purposeful and goal oriented and the second is human desires and demands. The problem arise when the demand is greater than the resources allocated, which at times are beyond
Changing factors such as aging populations and new technologies becoming available are increasing expectations from people throughout the world, and decision makers must make rational choices to maximise benefits to population health whilst working with limited resources. Yothasamut et al (2009) summarise this by observing that "health care resources in every setting are always constrained, while unlimited demand is observed". The 'best' choices in the context of economics are the ones which maximise utility (individual satisfaction through consumption of goods) and welfare, the sum utility experienced by all individuals in society. Decision makers often have to seek satisfactory rather than optimal solutions, also known as working with 'bounded rationality' (Simon 1957 in Williams et al 2008), as it is important to pursue both efficiency and equity in the funding of health care. Therefore, it may be unsuitable to fund the most cost effective option if it sacrifices the equal distribution of benefits. Research in health economics can take a normative or positive approach and this reflects the balance needed between cost control and equity when making economic decisions. Positive economic research and analysis is concerned with 'how things are' and seeks to explain economic phenomena, whilst normative economic research and analysis is concerned with 'how things ought to be' and relies on value