Health Service in the UK - Coursework Example

Health Service in the UK Introduction This report describes the health service system in United Kingdom. It analyses on the provision of healthcare as a merit of good and positive externality associated. It explains how market failure results and importance of the government intervention. Health care system provision in the United Kingdom is in a devolved manner. Health care provision is through the public and private sector. Private health is very expensive to achieve. Thus, the public healthcare system is very vital and crucial to achieve. The UK has been divided into four main regions; England, Scotland, Northern Ireland and wales. All of these regions in the United Kingdom have their own health care systems. Each of the systems has different priorities and policies. This has led to a variety of differences existing between the health care delivery systems (Boyle 2011, p. 341). Differences exist between the general taxation that aids in the funding and attainment of health care for the public sector. The private health sector is considerably smaller as too compared to the public health sector. Private healthcare is acquired by means of health insurances and is funded as part of an employer funded healthcare scheme. It is paid directly to the consumer. The world health organisation ranked health care provision in Britain to be the fifteenth in Europe. A current survey that was conducted by the commonwealth fund rated the health care delivery system in the United Kingdom to be the second worldwide taking into consideration the efficiency and effectiveness of the care delivery system (Roe & Liberman 2007, p. 203). In order to fund the public health care system, about 8.4 percent of the total gross domestic product is spent healthcare. A Social desirable good A socially desirable good or service involves the provision of a good and services that provides maximum benefits to a large number of individuals in the most possible way. A socially desirable good is generally much beneficial and generally accepted by a majority of the individual in a country. Some of the examples provided on socially accepted goods and services include provision of clean air, clean water as well as good access and the provision of good and quality healthcare systems to meet the social or common good of the people (Kotler & Lee 2008, p. 67). Most of the companies exist to provide the maximum possible return to shareholders. This is not in parallel to serving the social good to the people through the provision of financial dependence of its citizens. Corporates organisation on hand will focus on corporate sustainability efforts and social responsibility. They expand to produce more socially desired goods as part of their day-to-day strategies. Merit goods and demerit goods Merit goods are under consumed in a free market. The individuals do not understand the benefits of the provision and consumption of those goods and services. These goods are free and subsidized at a point, and the social benefits to the provision of such goods always exceed the private benefits. Consumption of such services and goods will produce positive externalities. Merit goods are normally under consumed due to lack of information on the goods. However, these goods can be provided privately. If provision is solely by the private section, the goods tend to be under consumed, so the government has to take over. Examples of merits goods are health services and education services (Fiorito & Kollintzas 2004, p. 1381). Demerits goods are goods and services that are bad to the consumer. These include a good such as tobacco for which the social cost to the individual and the society of consumption exceeds the private costs that are incurred by the consumer. Consumption of such goods causes negative externalities to the society unlike for the merit goods (Boyle 2011, p. 211). The private costs that are involved include the money that is spent on the goods and on the health implications. The individual and social cost also includes the negative externalities. People over consume demerit goods due to imperfect information as they are unaware of the long-term health effects to follow. Examples of such goods are cigarettes, alcohol consumption and use of various drugs. These goods are over consumed if left in the free market, so the government has to step in to stop the over consumption by imposing heavy taxes and duties on such goods (Boyle 2011, p 217). Externalities Externalities are common in every area of the economic activity. They result from third party effects that arise from production and consumption for certain services and goods for which there is no appropriate compensation that is paid (Merlo & Rojas Briales 2000, p. 207). An effect of a purchase or decision use by a set of parties on others did not have a choice. Their interests were not taken into account. Externalities may result to market failure if the prices mechanization does not take into account the social benefits as well as the social expenses in the production of the good. Negative consumption externalities-consumers can create externalities when they consume and purchase certain goods. Examples include pollution that results from cars and motorbikes, noise pollution from using cars stereos and negative externalities because of alcohol abuse and smoking. Such pollution generated by the cars affects others who have no choice and are not taken into account. Examples of positive externalities include the purchase of a certain model of a car that increases the demand and availability for mechanics who know that kind of vehicle. This helps in the improvement of the situation for others owning that particular type of car model (Netessine & Zhang 2005, p. 62). Government responsibility in health care provision The chosen merit good in the paper is provision of healthcare. The government steps in to provide NHS in the United Kingdom. Many of the families are not able to afford health servers, and this may result in health care problems. The government provides health services to the people free at a point, and the public does not pay through taxation. The government also provides state pensions as the pensions tend to be over consumed. National health services are publicly funded healthcare systems. Funding of these systems is through central taxation (Roe & Liberman 2007, p. 212). The systems of healthcare operate under different management and are entirely independent over the rules and political authority. These systems include national health services in England, national health services in Scotland, health and social care in Northern Ireland and national health services in wales. The government ensures the provision of comprehensive health and rehabilitation services for the prevention and cure of general disease conditions affecting the general population (Bateman et al. 2013, p. 48). Private sector in production of health care The public and private sectors are descriptors of health care system. A public health care system involves government involvement in the care and delivery of services to the people. Private refers to involvement by business charitable organizations and individuals in the delivery of health care systems. The private and public sector supports each other in the delivery of care and serves to the individuals. The private sector helps in the reduction of the government overload in the delivery of the health care systems. It helps in reducing and deflecting the demand of health care in United Kingdom (Boyle 2011, p. 127). Privatization is important in community empowerment. It emphasizes on strengthening of communities by empowering community organizations and other less formal institutions to help in the provision of health care. However, the private sector as the only provider of healthcare may result to various consequences. Health care to the majority of the people in United Kingdom would not be achieved. Majority of the individuals cannot afford the cost of healthcare thus will limit their accessibility. This will result to very expensive health delivery systems as the private sector interest is to maximize their profits. Positive externalities of health care The provision of healthcare as a merit; results to positive externalities. Financial intervention that the government makes through the reduction of the cost of health care delivery as well as allowing for the provision of free healthcare services is important in enhancing access to health care needs. The consumer under consumes health care system (Fiorito & Kollintzas 2004, p. 1380). To solve this, the most effective way of solving this under consumption is through government intervention, to provide subsided and free health care to the people. Thus, more people will end up seeking health care hence a reduction in mobility and mortality rates. This will help reduce the cost of seeking health care by individuals well as reduce time spent in providing health services by the government. A healthy population is important to enhance productivity and countries development. However high government revenue ought to be used (Zerbe & McCurdy 2000, p. 10). Market failure Free market provision of health services would result in failure. Wherein any given market if the quantity of a product demand to its consumers does not equate the quantity that is supplied by the supplier results to market failure. This results from, an imbalance of equilibrium. Selfishness by the producers of health care systems will lead to hiked prices in healthcare for the producers to get profits. Also leads to production of what only the consumer wants to sell what the public are eager to buy. If the consumers do not pay for goods and services, then the producer will not produce. This results to market failure in the health care systems (Zerbe & McCurdy 2000, p. 10). Taxation by the government helps to reduce market failure. Taxes collected are used in to finance health care needs as well as educational needs and other merit needs. The indirect taxation discourages the production of demerits goods and other services producing negative externalities. Subsidies used by the government, to encourage production and consumption that is very relevant in cases of merit goods and products. Reduction of the cost of healthcare services helps to encourage more people to receive the service. The government also prevents instances of market failure by regulations of standards and legal controls in the health sector i.e. restriction of the sale of tobacco and alcohol to the people. Extension of property rights by the government through the allocation of property rights over the ownership of resources (Boyle 2011, p. 412). Conclusion Merit goods are under consumed in a free market. The individuals do not understand the benefits of consumption and provision of services provided. These goods are free and subsidized at a point, and the social benefits to the provision of such goods always exceed the private benefits. Consumption of such services and goods will produce positive externalities. This includes provision of healthcare where the government steps in to reduce prices as well as provide free health services to the people. However, if the private sector is left to provide services it may lead to market failure as the consumers will not be willing to buy expensive health systems. Other ways by which the government can provide other merits by regulation of products, use of the buffer stock schemes to reduce price fluctuation, use of renewable energy certificates, reduction of prices, use of tradable pollution rights, as well as indirect taxation. References Bateman, I.J. et al., 2013. Bringing ecosystem services into economic decision-making: land use in the United Kingdom. Science, 341, pp.45–50. Boyle, S., 2011. United Kingdom (England): Health system review. Health systems in transition, 13, pp.1–483 Fiorito, R. & Kollintzas, T., 2004. Public goods, merit goods, and the relation between private and government consumption. European Economic Review, 48, pp.1367–1398. Kotler, P. & Lee, N.R., 2008. Social Marketing - Influencing Behaviors For Good, Merlo, M. & Rojas Briales, E., 2000. Public goods and externalities linked to Mediterranean forests: Economic nature and policy. In Land Use Policy. pp. 197–208. Netessine, S. & Zhang, F., 2005. Positive vs. Negative Externalities in Inventory Management: Implications for Supply Chain Design. Manufacturing & Service Operations Management, 7, pp.58–73. Roe, A.M. & Liberman, A., 2007. A comparative analysis of the United Kingdom and the United States health care systems. The health care manager, 26, pp.190–212. Zerbe, R.O. & McCurdy, H., 2000. The End of Market Failure. Regulation, 23, p.10.  Read More