There are 10 key economic concepts of health care. Each of the economic concepts is important when evaluating the different issues related to health care such as the increasing cost of health care. Henderson (2015), list the 10 concepts as follows: scarcity and choice, opportunity cost, marginal analysis, self-interest, markets and pricing, supply and demand, competition, efficiency, market failure, and comparative, advantage. The concept scarcity and choice address the issues related to the limited supply resources and the need to economize (Henderson, 2015). An illustration of the importance of the scarcity and choice concept is when there is a low quantity of available resources to meet the demand of individuals and rationing occurs. Opportunity cost emphasizes
As it is generally assumed, health care is a social component that is mandatory in any developed society. Opponents argue that patients benefit from privatisation as they will have better choices because of the competition spawned as a result. They also suggest that patients will be subject to affordable and quality services (safeguarding free services) since competition will provide different clinical groups the opportunity to solicit valuable contracts that will protect pricing and quality services (El-Gingihy,
Through the history of health care, the standard of care changed from protecting our patient from injury and illness to a systemic entity to make money for insurance companies. Access to services and clinical outcomes are dependent on what health insurance providers will “pay” for in a clinical or community setting; as a result, patient safety, care and satisfaction has been negatively impacted.
Looking back at our former healthcare system, we see that it was far from flawless, some say it is due to the government, while others claim the health insurance and the healthcare system in general is to blame. So it 's no wonder that the healthcare system is constantly fluctuating. These fluctuations have let us to a system that was very flawed and in dire need of rectification. Furthermore, the health insurance market wasn’t readily accessible to the middle and lower class, due to high costs, bizarre prerequisites, and complicated terminology.
The increase of expenses - As politicians continue their dissension amongst each other, the situation is worsening in our healthcare system. According to the World Health Organization, to achieve universal health coverage, countries need a financial system that enables people access to all types of health services without incurring financial hardship (Carrin, Mathauer, Xu, & Evans, 2011). This idea would be the foundation of innovative ideas that the U.S. could reform its healthcare system, but too many ideas are sabotaging any valid efforts. In the mean time, the U.S. healthcare system continues to deal with issues such as the increasing uninsured Americans (over 49 million), expensive administrative procedures and the inability to measure the accuracy of quality of care, access of care, and the increasing healthcare spending and financing that limit our ability to efficient utilize resources.
Assess the value of healthcare professionals and decision makers understanding the discipline of health economics.
In healthcare system the highest quality medical care means” the greatest benefit to patients at the lowest possible cost” (Burke & Ryan, 2014, p. 3). “The Agency for Healthcare Research and Quality (AHRQ) defines quality health care as doing the right thing for the right patient, at the right time, in the right way to achieve the best possible results” (NCQA, p. 3) According to American college of physicians, the single most reason for the health care cost is higher healthcare spending. There are several factors involved in the high health care cost such as inappropriate use of technologies, lack of patient centered care, overuse of the reimbursement, excessive price for health care facilities, increased organizational cost, and health accountability are some of the reasons for increased health care cost. In order to decrease the cost, the available health resources be used judiciously and equitably. Understanding these factors and identifying the potential factors of health care costs assists in providing quality and effective services and thus improves the health outcomes (ACP, 2009).
Cost-benefit, cost-effectiveness and cost-utility analyses are forms of economic evaluation which are useful in health economics for comparing costs and allocating resources. Health economics is widely relevant to governments and the health sector in implementation of new policy, as it concerns the allocation of resources in the context of a limited budget, or 'scarcity'. Economic evaluation is a potential tool for setting priorities in health, though it is only one of many potential criteria, including overall budget and public attitudes and wants. Economic evaluation is already in use in some settings, such as in pharmaceutical company proposals for government subsidisation, but there is room for expansion across the field of
In the current U.S. system the free market prevails and companies, in this case, major insurance providers “compete” for business. This competitive business approach should in theory drive costs down. For some reason, however, an argument can be made that it has produced the opposite result in profiteering. The nation’s largest insurer, UnitedHealth, boasted over a 10 percent revenue increase in 2013 according to Forbes (2013). Health insurance affordability contributes to the disparity in access to health care, as evidenced by the fact that there are millions that are still uncovered. A greater majority of certain minorities lack both health insurance and the financial resource to seek out either health care or insurance. While insurance companies reap huge profits the percent of private sector companies offering health insurance has dropped to less than 50 percent (Kaiser, 2013). There is decidedly a lack of coordination of care for this at risk population as well, since treatment is rendered sporadically and with continuously changing providers. The last major challenge is that of improving the quality of health care. According to a 2010 report by the U.S. Department of Health and Human Services, Office of Inspector General (OIG), an estimated 13.5 percent of Medicare beneficiaries experienced adverse events during their hospital stay and an additional 13.5 percent experienced a temporary
The healthcare system in the United States is a system composed of many private insurance companies who act independently from one another. These companies make their money through premiums which are paid by the insured; therefore a major part of the healthcare system is privately funded. This type of market is considered to be an imperfect market because it does not meet the true requirements of a free market where there is unrestrained competition between providers. In our healthcare system there is an absence of a central agency to govern healthcare. There are multiple payers and third party insurers serving as intermediaries between financing and the delivery of healthcare. The United States has a multi-payer, heavily private system in which thousands of private insurance companies are responsible for paying some claims, while federal and state
In theory these alternative models lower costs and improve access to care, However, investigation of private health-care performance in Canada and the U.S., indicates that these alternative models are not
1A. Market failure is a situation in which the allocation of goods and services is not efficient. In any given market, the quantity of a product demanded by consumers does not equate to the quantity supplied by suppliers. This is a direct result of a lack of certain economically ideal factors, which prevents equilibrium.
A competitive market is one that allows easy entry and exit: a market in which companies are generally free to enter or to leave at will. This does not describe the health care market in the US. There are certain assumptions that the competitive market model operates under some assumptions, first is the consumer/patient has full information about the nature of the services required, the anticipated results of their decision and the benefits obtain from the service. This is not true in health care often time the patient is operating at a distinct information disadvantage when they require health care services such as insurance. If a patient purchases health insurance often they don’t know enough information to ascertain if they have
I am writing to express my interest in the PhD scholarship in Health Economics at Monash University which was advertised in seek career website on 14th September 2017.