Economic Of Health Care





Economic Of Health Care


Provision of affordable health care to the entire nation remains one of the most complicated procedures as concerns the economy of the country and market forces that drive the system. The efficiency, effectiveness, behavior, and value in consumption and production of health care determine the quality of services and financial mechanisms put in place. Understanding the effects of such aspects like the inflation, moral hazard, derived demand among the population, imperatives from technology and burdens of various diseases helps shed light on the broad spectrum of ensuring the costs and prices of health care can be achieved. A bi-partisan, inclusive, and collaborative approach is required in stemming the growth of rising health care costs and making it affordable for the entire population despite economical constraints.


One of the policy benefits realized from movement of people into less comprehensive coverage is not an ideal process. In this category, it is believed that when people face total health spending in regions of higher share and expenses, they will develop into careful health care consumers. The people will tend to avoid any unneeded costs that they have not incurred before since the full cost was not met. In reference to costs, the general populace will opt to avoid the extra costs due to affordability. Such a problem is referred to as moral hazard. A representation of economic inefficiency is brought about by cost sharing in optimal level and purchase of any additional health care (Merino 16). The representation is categorical to note the effect that moral hazard contains towards utilization of resources in health care that are scarce.

            Moral hazard ensures that income is transferred and efficiency is gained through generation of welfare gain. However, there is a serious impact and outlay of employing the tactic. Moral hazard ensures that sick consumers are able to access healthcare and services that in essence they could not afford. For example, the provision of services by insurance is timely. Krugman (11) argues that oral hazard helps in relieving constraints of liquidity stemming from efficient decision-making. Comparatives are derived from overstated costs as regards the price distortion and inefficiencies. In terms of medical care, the welfare loss from the excessive dimensions is outweighed by the gain covered by efficient moral hazard. Such an argument points to high income earners as facing low liquidity constraints given that moral hazard can be applied towards such categories. Therefore, with the recent increase in understanding of the concept, fast tracking the policy coverage appears to be the limiting factor.

            Derived demand is an economical term where demand for intermediate services or goods occurs due to a demand in final good or service. The production of the initial demand helps in facilitating the result of the final good or service and vice versa. The perceived shortage of personnel in the health care system creates a shortage of the efficiency given towards availing of health care at affordable costs to the entire population (Goldsmith 17). Derived demand does not necessarily point out towards the limited access to health care in substantial numbers of the population. A different explanation is contained in the low utilization of the services. Due to the derived demand, providers will respond to the demand created by the population. The influences can come through factors like sanitation levels, clean water availability, and the nutrition capacities.

            The autonomy of technological imperative towards the delivery of health care and services cannot be avoided. The autonomy is generally assumed that since technology is always in advancement and improvement, it is irreversible, unavoidable and its progressive use in the health care is inevitable. It enhances the need for institutionalizing of technology as an operational requirement since the aim of advancement is in providing better, faster, and technical mechanisms of solving problems. Haugen and Musser (16) state that the economic effects derived from the technological imperatives will require the costs and prices of the services to increase. Availing of the technologies for different procedures and functionalities is expensive especially at the initial stages. With the healthcare spending and behavioral patterns of the population, such services will be surplus to their requirements due to the incomes earned. Hence, delivery of services will be at the lower levels as regards the demand and supply.

            Over the recent years, the rise in costs and prices of health care has been attributed to inflation. Sustained increase of costs and prices has affected the spending ability of the population towards the services (Bertlasky 9). It has become increasingly expensive for the greater part of the population to access any affordable healthcare and services in the country. According to the economists, the affordable care act has had little effect on the inflation rates as it seeks to reduce the number of uninsured citizens while having a control on the rise of medical prices and cost. Inflation serves to caution the economy from reduced growth and expansive effect on the production and respective downturns of market recessions. Due to the inflation, the population will reduce the spending amounts towards health care, as the provisions will be higher than the affordability. The high-income individuals are the only possible targets for sustained periods of health care spending.

            Circumstances that can foster need and demand to coincide will require private ownership. The factors that affect the production of healthcare services can be shifted in the market so that repeatedly, the need and demand can tend to coincide simultaneously. In a health service, system private ownership can be instituted according to the different geographical locations and being in utility of specific target markets (Haugen and Musser 14). For example, if a certain ethnic community is prone to a distinct health concern, the private owners of health facilities can base the services on the identified demand. In order to ensure maximum profitability in the need, the demand will be determined by the target market in return. The expanded provision of the particular service will be unique to the selected demand and in return, gains are ensured. Considerations will be required on the economical wealth and use of technology.

            The impact of a problem of health as measured by financial morbidity, cost and mortality refers to the burden of disease (Goldsmith 13). Ideal health statuses are put in comparison with the status according to the measure of disease burden. The quality-adjusted life is significant in terms of the equated years lost through a disease. Thus, when an individual is free from disease, the expected age in tine of death is pitted against the number of years or gap created by the presence of the disease in a normal human. Burden of disease affects the manner in which health care and its costs are availed to specific populations and conditions. The respective environment and conditions affect the mortality of a people, thereby translating to the financial outlay of availing the necessary health care to curb the problem.   

            Increased calls for payment in terms of value rather than volume have witnessed slow progress in health care. In terms of rewards according to efficiency and quality, changes have been sort in order to determine the extent of healthcare provided. There has been lack of attention and this has led to increase in the cost of health care services provided. There is lack of accountability according to the national scale. Inappropriate and redundant care offered has dealt a negative impact to the health care spending. It is tougher reducing the waste in terms of cost to the population. To the average consumer, there is increased pressure towards considerations of the costs due to plans of a high-deductible standard. It enables increased spending other than the coverage offered to the consumers, thereby increasing the overall costs.   


In order for the high rates of health care costs to be reduced, an inclusive, collaborative, and bi0-partisan approach is required. A simple mechanism to deal with growth in the costs cannot be achieved other than coon ground among stakeholders in a number of issues. Barriers to transparency on how the markets work or fail to operate should be tackled. Planned innovations through local communities and modernization of the benefits should be facilitated. Structural reforms that are bold and firm should be advanced with necessary speed in order to cut down on the costs incurred in the system. Through initiatives of gain sharing, the latter can be achieved. The above precautions can be instituted to help cut down on the rise in health care costs and encourage increased spending despite the economic constraints.

Works Cited

Berlatsky, Noah. Inflation. Detroit, MI: Greenhaven Press, 2013. Print.

Goldsmith, Seth B. Principles of Health Care Management: Foundations for a Changing Health Care System. Sudbury, Mass: Jones and Bartlett Publishers, 2011. Print.

Haugen, David M, and Susan Musser. Health Care. Farmington Hills, MI: Greenhaven Press, 2012. Print.

Krugman, Paul R, and Robin Wells. Economics. New York: Worth Publishers, 2006. Print.

Merino, Noël. Health Care. Detroit: Greenhaven Press, 2010. Print.

Calculate your order
275 words
Total price: $0.00

Top-quality papers guaranteed


100% original papers

We sell only unique pieces of writing completed according to your demands.


Confidential service

We use security encryption to keep your personal data protected.


Money-back guarantee

We can give your money back if something goes wrong with your order.

Enjoy the free features we offer to everyone

  1. Title page

    Get a free title page formatted according to the specifics of your particular style.

  2. Custom formatting

    Request us to use APA, MLA, Harvard, Chicago, or any other style for your essay.

  3. Bibliography page

    Don’t pay extra for a list of references that perfectly fits your academic needs.

  4. 24/7 support assistance

    Ask us a question anytime you need to—we don’t charge extra for supporting you!

Calculate how much your essay costs

Type of paper
Academic level
550 words

How to place an order

  • Choose the number of pages, your academic level, and deadline
  • Push the orange button
  • Give instructions for your paper
  • Pay with PayPal or a credit card
  • Track the progress of your order
  • Approve and enjoy your custom paper

Ask experts to write you a cheap essay of excellent quality

Place an order