Willingness-to-Pay in Healthcare - Essay Example

Healthcare services include the sale of drugs in treating patients for specific types of diseases. In general, the available supply of drugs about the demand for the said drug significantly affects the market price of a particular drug. For example, chloroquine and sulfadoxine-pyrimethamine which are used to treat malaria costs around US$ 0.15 for a single dose (Wiseman, Onwujekwe, and Matovu). Given that there is an outbreak of malaria within a geographic region, the demand for the said drug is expected to increase. In case there is a scarcity in the supply of the said drug, prices of chloroquine and sulfadoxine-pyrimethamine would likely increase until it reaches a point of equilibrium.

When the economic condition of a country is good, the employment rate is higher. On the contrary, the rate of unemployment rate increases when the economy is bad. Given that more people are employed, there is a higher chance that more people will be able to earn extra money to avail the high cost of health care services offered by the local hospitals and vice versa.

When the employment rate is high, competitive employees can bargain their expected salary from their prospective employers. Even though the market price of health care services is high, more people are willing to pay for a higher cost of competitive health care services. In times of serious financial and economic crisis, most large-scale companies are downsizing the number of their employees. For this reason, talented individuals do not have much choice but to accept work opportunities even though the pay is less than what they deserve. In line with the limited pay, some people are receiving when the economy is bad, people, in general, are unable or unwilling to pay for the high cost of healthcare services (Lang and Lai).

Either by choice, adoption, or divorce, the number of single-parent families is growing fast in the United States (Miller). To enable single mothers to cope with financial expenses, the only way to increase their income is to increase their hours of work.  It means that a single mother usually ends up sacrificing her leisure time with her children in exchange for the income she would earn while working.

For example: Jack is earning $5,000 a month working 8 hours a day as a manager in a five-star hotel whereas Cindy earns only around $500 a week working 8 hours on a part-time job as a waitress because she is taking care of her child as a single mother in the morning. For Cindy to be able to earn $5,000 a month, she will have to work longer hours so she financially supports her child. For Cindy to earn the same earnings as Jack, she will have to work for a total of 80 hours a month. [($500 / 8hours) = $62.50 / hour; $5,000 a month / $62.50 per hour = 80 hours a month] (Jones). Therefore, Jack is more willing than Cindy to spend large sums of money on expensive healthcare services.

The willingness-to-pay of consumers for high prices of health care services highly depends on the economic condition of a country. More people are employed and are earning more money in case of a good economic condition. For this reason, more people are 'willing-to-pay' the high cost of medical services.