Solution for the Asymmetry of Healthcare Information

“Physicians (consumers have imperfect knowledge; physicians largely determine the quantity and quality of health care services)

Health care has gone through a huge change since the advent of technology. This resulted in a corresponding high health cost. A third party, the insurer stepped in to help customers; patients overcome the high cost of health care. This meant measuring cost against service, demanding the details of services rendered to the patient. This in a way a patient’s information is given out to the insurer as per legal contracts signed in the agreement. This poses deep ethical challenges because even beyond management, other workers access the information when making inputs. Patients strictly have rights to keep secrete their medical problems between them and their health providers. The necessity to get help to buy health care however has made it impossible for patients to have their autonomy in that regard.

Transparency in Healthcare is one of the many debatable changes in the recent healthcare reform. Consenting for pricing, outcomes reports, and standardized performance metrics to be easily accessible to all patients is causing a debate among physicians and insurance not let alone the public. Transparency will bring light into healthcare cost and pricing while enlightening the availability of information needed by consumers to make informed healthcare choices based on their selected physicians. The aspired goal is to implement transparency in healthcare to be recognized, as an important role in which the rendering physician’s contracts will be value based and not quantity driven. The consumer or also know as the patient will have fundamental information on the insurance plan product purchased by him or her, allowing them to understand their patient responsibility towards the rendered cost with

In assessing the current pitfalls of society that have resulted in an unjust health care system, income and medical knowledge are at the forefront. In an attempt to hypothesize a just system for health care, fair income and equal state-of-the-art medical knowledge seem

Part of the cost-driving factor seen here is in the gluttony of physicians who provide care to a patient. In areas which are high in physicians supply, competition might promote utilizing more expensive procedures and treatments in the care of patients. The amount spent on health care is also not beneficial to the outcomes that come out of such care (Emanuel,

Economics can relate to competition as well as choice in the world of healthcare. A great example is market concentration, which is when a small number of companies control a relatively large percentage of the market. In other words, it is an economic tool that is useful because it reflects the degree of competition within the market. According to Riley (2011), “If concentration is low, then the industry is considered to be competitive and if the concentration is high, then the industry will be viewed as oligopolistic or monopolistic.” For instance, an oligopoly market has a small number of large companies that produce similar but slightly different products and in a monopoly the vendor charges high prices for the goods because there is no competition.

For example, if the patient has active insurance than the physician understands that they will get compensated if the patient is seen. If the patient does not have insurance, most likely the patient will not been seen because the doctor will not be getting reimbursed or paid for that visit. Some hospitals have free-care programs where patients without insurance can receive free healthcare, but the hospitals and providers are not getting paid, which can hinder the stakeholders (physician). Therefore, if a patient has insurance, the doctor or healthcare provider is being benefitted. On the other hand, a factor that burdens stakeholders is the fact that U.S. health insurance plans are highly variable, and even the best plans do not cover all necessary care or provide first-dollar coverage (Scheetz, 2015). Therefore, either the patients are not receiving good quality of care or the doctors can perform the care, but they will not get reimbursed. Also since the Affordable Care Act (ACA) was enacted, more patients are being seen, which causes the physicians to receive a lot less money due to a lower fee

Another bad result of medical insurance is that it has turned the entire field of medicine in to a financial playground of human life. Doctors are supposed to treat all patients equally, as opposed to treating only those with insurance first, no matter what the circumstance. Before, medical information flowed only between the patient and his or her medical practitioner. The physicians

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.

Access to health care is a significant problem. There are many stakeholders involved in the health care system and this paper will outline how the problems with health care access affect them. In general, the major stakeholders of the health care system are the patients, the physicians, nurses, other staff, management, shareholders, politicians and regulators. The families of patients, insurance companies, suppliers, medical schools and others are all key stakeholders worthy of consideration as well. The problem with access to health care is that health care access is uneven, so that many people have no access.

The demand for medical care is derived from our demand for good health. Michael Grossman was the first to do econometric research on this topic. "Grossman 's work established two approaches for consideration. In the first, medical care is viewed as an input in the production function for health, and in the second, as an output produced by medical care providers (Henderson, p.142)." There are two main factors that determine the demand for medical care. The first is the patient factor. This includes a patient 's health status, demographic characteristics and economic status. The second is the physician factor. This is an interesting topic because it introduces the principal (patient)-agent (physician)

In this case the principle is the government, which has an objective of maximizing the health care of Ontario while also efficiently utilizing resources to keep costs low. However the government (principle) cannot achieve this on its own and need physicians (the agent) to carry out the task related to health improvement. The government aims to motivate physician through financial incentives to improve health, nonetheless physicians are always striving to increase their own utility via higher income, which occurs as a direct result of patients visits to the physician which is higher when the population is unhealthy. This represents an endless cycle of repetition, where the government wishes to improve health status but the intrinsic value of physician remuneration is a direct result of the lack of health in the population. This results in the fee-for-service model being both technically inefficient and costly since physicians have a financial incentive to over utilize resources such as conducting exams that may not necessarily be needed. Furthermore due to the nature of Universal health care patients also have also a tendency to over utilize health services, as individuals do not personally incur costs for accessing health services. This leads to the expressed demand curve of health care being higher than it should if it were solely based on necessity (Figure 1). Each extra unnecessary access of healthcare provides diminishing marginal benefit in large part due to opportunity cost. If a patient did not access said health care their time could have gone towards a different activity that has a higher marginal benefit. As a result true marginal social benefit is lower than modeled and utility decreases overall as the public healthcare model and fee-for-service model for physicians results in over utilization regardless of the

The US healthcare system has recently undergone major shift from an indemnity plan to a managed care system. This has accompanied the rise in health care cost, along with increase in our population and increase in numbers of people without health insurance. There are important situational and economic factors, in addition to cultural beliefs that contribute to the change. In the traditional US health care system, patient received complex care from non-profit independent hospitals. The insurance reimbursed hospitals, physicians, and other providers on a fee-for-service basis and did not intervene in medical decision making. Physicians acted as patient’s agents. Whereas, the managed care focuses on reducing overutilizing and unnecessary utilization,

One possible consequence of asymmetric information is that a market will not exist or that a general reduction may occur in the quality of goods available even if it existed. (FGS) Fortunately, these information gaps can be prevented through licensure, certification, accreditation, threat of malpractice suits, the physician-patient relationship, ethical constraints, and the presence of informed consumers. Ostensibly to make sure that all practicing doctors are competent to provide medical care, governments require them to graduate from an accredited medical school and to be licensed to practice by a state board. Having licensed, certified, and accredited physicians will ensure that they have the minimum required skills to practice and incentivize good care with threat of taking away licenses. Although these requirements may weed out the most unqualified—at the cost of excluding others who are or could be qualified—there are two serious defects. First, the patients still have no guarantee that competent, licensed doctors will not use their informational advantage for personal gain such as money. Second, the licensing may lull the patients into a false sense of security that leaves them more susceptible to exploitation. Another possible way to reduce asymmetric information is by having more informed

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