Key Economic Concepts Of Health Care Essay

Every developed country around the globe is going through a lot of difficulties in providing better healthcare to its citizens. As stated by Norris (2002) the causes are universal and the increase in the percentage of elderly people which require better healthcare, the increasing cost of medical technology, patients' expectations of services and quality, and economic and social changes that reduce the state's ability to fund healthcare while increasing its involvement. All of these factors drive up costs and reduce equity of access (Norris, 2002).

Grossman’s model states that a person utility is based on health (H) and other non-health related goods (Z) that the person consumes. The production possibility frontier for Grossman model shows the tradeoff between home good production (Z) and health (H). Unlike usual production possibility frontiers, an individual needs an optimal level of H to maximize consumption of Z goods.

Alzheimer’s disease affects an astounding number of people in the U.S and majority of those are senior citizens, which has a significant impact on the economics of the health care system. Many people over 65 use Medicare insurance to pay for their Alzheimer’s expenses, and some use Medicaid, which puts the cost on the health care economy even higher. In 2015, the direct costs to American society of caring for those with Alzheimer 's specifically, will total an estimated 226 billion dollars, with half of the costs paid by Medicare (Alzheimer’s Association, 2015). Included in these costs are expensive diagnostic testing, psychological evaluations, treatment and maintenance, nursing care, medications and long-term care facilities. In addition to the necessary cost involved in caring for the patients, millions of dollars are put forth for research of this disease, because Scientists are still working on a cure. By 2050, the number of people age 65 and older with Alzheimer 's disease may nearly triple, from 5.1 million to a projected 13.8 million, without the development of medical breakthroughs to prevent or cure the disease (Alzheimer’s Association, 2015).

The opening statement of the presentation accurately summarizes the United States’ healthcare system as it relates to everything that Dr. Roper said in his speaking. I found it shocking that America spends more money on healthcare than any other country in the world, yet everyone does not have proper health insurance, meaning they are underinsured or simply uninsured. Most of the problem, in my opinion, lies in the cost driven system for healthcare in this country. As a matter of fact everything about this country is money driven; everything is about how it will affect the economy. From the hospital companies down to the patients who receive services, the major concerns are rooted in cost. When doctors are paid based on how many patients they serve and not how well they serve the patient's, everything is more about numbers where it should be about the welfare of the patients. The system is rigged to being more about quantity than

Health economics is a new subfield of economics that analyzes various health care related topics. For example, some health economists evaluate the long term effects of lifestyle choices on health. Others examine the estimated costs and benefits of new or proposed health care policies. One health economist may propose more efficient ways to provide certain health care services, while another may seek to increase the cost effectiveness

As a result there seems to be the growth of commercialization in health care where it seems that a competitive profitable market will bring on a more efficient and effective health care system. The opposing thoughts argue that injustice is being done on the poor patients, and nothing should keep them from getting the care they deserve (Andre, C. & Velasquez, M., n.d.).

Principals to the workings of any economy are the laws of supply and demand. When the supply, price, quality and demand for a service are in line with the market it can potentially work to its optimum. The laws of supply and demand trigger’s the nation’s economy which also applies to the delivery of health care services. The health care market is notably full of distortion. One reason for this distortion is a separation between the supply and demand of services. This, in turn or in part by the fact that consumers are not aggressively involved and appropriately educated as partners in the consumption of health care services. “Demand” strategies are fixated on just that issue: shifting how health care services and products are used by consumers,

Health care is a significant part to society, people have accidents, get ill and emergencies do occur therefore, hospitals are needed to treat, diagnose and manage various types of diseases and ailments. The industry of health care is allocated into numerous areas to meet the needs of the population at large and individuals. Across the world, the health care industry continues to grow and thrive forming a vast part of the economy in any country (Holtz, 2008:527). Health care is classified as a merit good, meaning that when it is consumed it delivers benefits not only to the individual consumer but also to others (Daniels and VanHoose, 2004:434).

Health Care Economics can be defined as a way to research +and analyze information pertaining to the healthcare industry. Conducting research and analyzing information in hopes to create a better health care system by utilizing resources in order to be cost effective and affordable. Over the past several decades the healthcare industry/system has been a major concern for the Americans; facing several factors, but one of the biggest concerns is the rising cost of healthcare coverage and treatment(s). Simply Americans cannot barrier the cost of affording health care coverage, nor being able to pay for physician visits and/or prescriptions that are prescribed to treat their current condition.

To fully analyze the economic standpoint of healthcare, the concept of scarcity is necessary to understand. A resource is scarce when there is a limited amount of it, and it is not able to satisfy everyone’s needs and wants. In relation to healthcare, there is a scarcity of health

One out of every seven dollars spent in the United States is spent for health care services. This is a greater percentage than in any other industrialized country. The topic of health care arouses deep emotions and generates intense media coverage. How can we understand many of the important health care issues? One approach is to listen to the statements made by politicians and other concerned citizens. Another approach is to use supply and demand theory to analyze the issue. There are two articles that I have found that uses supply and demand theory to analyze this issue.

The economy is tied into everything that is put into it. Economics certainly apply to health care and the way that health care is administered in our country during this time. To ignore such a vital part of our economy would be disingenuous and dishonest. The purpose of this essay is to examine the relationship between the economy and the health care system. The essay will also investigate this issue by examining the statistical methods that contribute to the measurements of the economic factors that affect the health care system.

As a graduate student offering healthcare administration, one of the key issues relevant to this field is managed care and quality care. Most of the concern for the last several decades was focused on the cost of increase in healthcare delivery. Focus during this age was on physician patient relationship dependence; where services provided were based on ‘fee for services’ or what is called unmanaged or traditional form of healthcare delivery. With this system, patients were charged base on the nature of sickness including hours spent. Because the system was a source of income to physicians, they inclined to spend quality time giving quality care to achieve a positive result if not negative using effective evidence based system (where patients were allowed to bring to counter their own personal preference and unique concerns as well as expectations which includes values). But the question still remains that, how many people were able to afford this kind of health cost? Obviously the average and the unemployed couldn’t afford and this became a burden for the public, because the structure was favoring only the rich in terms of cost and quality of care. The continuity of this issue (unmanaged care) made America one of the highest healthcare costs in the world with about 60% to 100% higher than most other countries because only few people could purchase it (health cost). And as those cost approached, it then exceeded to 14% overall economic output, thus increasing pressure

The problem with this condition, which lacks external objectives, values, and norms, is that an individual deciding their healthcare service is impacted by those objectives, values, and norms. Therefore, the economy of healthcare should be concerned about their objectives, values, and norms or become

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