Hcs/440 Individual Essay

755 Words Mar 20th, 2012 4 Pages
Economic Terms and Health Care History
Amber Rainwater
HCS/440 Economics: The History of Health Care
February 26, 2012

Health Care History
Throughout the history of the United States, the economics of the health care system has experienced many changes. There are many factors to consider that has been the drive behind many of the changes within the health care system. Medical and surgical technologies are some factors that relate to the changes in health care. Besides these factors, allocating sources to fund health care services has always been the most critical factor. One might consider the economic term supply and demand when looking at the history of health care economics and the primary funding source. Health care funding
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Funding health care is continuously changing. It involves payments going and receiving. Allocating resources that impact funding plays a big factor in how economists view health care funding. This includes the rising demand for quality and accessible health care.
Economists use certain concepts to help better understand health care services and the determining factor in health care funding.
One of the basic tools that economists use is elasticity and how the concept relates to health care funding. Generally elasticity can show the similarities and differences in a demand for a good or service. Elasticity provides a way to measure how sensitive supply and demand are the change in price. Economists can use this tool to predict what will happen to health care spending when prices shift.
Also, economist use inelasticity to determine how the demands for health care services. Most medical care is relatively inelastic. Pain, critical needs, fear of uncertainty, and insurance tend to reduce the role of price in patient decision making. Most hospital face inelastic demand, especially for emergency services, yet they charge less than profit-maximizing prices
Economists also look at the microeconomic market within the United States and how the market affects the overall funding of health care. Economists also use macroeconomics to how the changes in the economy as a whole affect the price and funding of health care and how the trends of the economy

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