Models of Health Production - Essay Example

 INTRODUCTION: Healthcare economics encompasses all factors that ensure viable implementation of healthcare services (Getzen 4). The research delves on the suppliers and users of healthcare services. The research delves on the effects of the different healthcare economics factors. Maximization of the healthcare economics factors contributes to the successful serving of needs of the users and suppliers of healthcare services. BODY: Health production or promotion concepts or models incorporate economic principles (Getzen 4). The health economics principles include the supply theory. The healthcare facilities are the providers of healthcare services. Under the supply principle, the health care facilities can increase the quantity of supplies needed to serve the increasing demand for their services. For example, if the patient queue, long line, increases due to lack of nurses and doctors serving the needs of the increasing number of patients, the healthcare facilities has to increase their healthcare capacity. The healthcare facility may have to hire more nurses and doctors. The additional nurses and doctors will reduce the long line of patients seeking medical help. Further, the health economics principles include the demand theory (Getzen 4). The patients are the users who demand for healthcare facilities. The theory states that as the prices of good and services increase, the demand for the products or services increase. Patients would troop to the healthcare center that offers the lowest possible hospital fee. The patients’ economic status gives the patients the significant influence to seek a healthcare facility that caters to his or her economic capacity. To the rich citizens of America, they would seek medical help from the specialists. Medical facilities In terms of medical facilities, the patients can choose their medical facilities by using their own economic status as the yardstick (Dewar 141). To the rich patients, they will choose the costly medical facilities where the daily room rate is very high compared to other medical facilities. In addition, the rich patients can choose medical facilities where the laboratory fees are also very high. Poor Patients. On the other hand, the poor patients have to other recourse but to choose more affordable medical facilities. The poor patients have to visit government hospitals that offer low medical laboratory fees. The poor patients have to visit medical facilities that cater to the indigent patients. However, some of the doctors are not specialists. Some of the doctors are students having their on duty practice. Comparing the rich patient and the poor patient, each has the right to choose which medical facility to approach, using their economic status as a basis for the selections. In addition, the government plays a vital role in the resolution of the health economics issue. In 2008, United States National Conference of State Legislatures, www.ncsl.org, issued timely health care reforms to improve the current loopholes in each state’s healthcare policies (Santerre 563). The government allocates a budget to pay for the medical bills of the poor or indigent patients. The government uses the tax collections to pay for the medical fees of the citizens. The government contributes to the alleviation of the people’s economic plight, especially the poor citizens of the nation, by allocating government funds to the hospitalization and other medical emergencies. Health care insurance. Further, many companies permit the employees to have healthcare insurance (Santerre 563). The healthcare insurance takes care of the patients’ medical bills while undergoing medical treatment. The healthcare insurance reduces the patient’s responsibility to pay for the actual cost of the medical doctor’s examination as well as the medical laboratory fees. Parties. Furthermore, the American healthcare environment includes three major parties (Champlin 913). The parties are the households, the employers, and the government. The costs of healthcare are shared by the three parties. However, the responsibility for the healthcare program is often not shared by the three parties. Some companies abhor paying for society’s medical bills. The private sector often considers the issue of paying for the healthcare costs of the patients as a token of benevolence. However, most companies insist that it is not their responsibility to pay for the employees’ medical bills. More importantly, some companies believe in the orthodox economic principle that the employees are responsible for paying their own medical bills (Champlin 914). These companies insist that healthcare is a commodity or consumer good. As a consumer good, the company will not benefit from the consumer good of healthcare because the company will not be afflicted with diabetes, asthma, cancer, heart attack, etc. On the other hand, the employees are the ones who may succumb to the physical ailments. For this reason alone, some companies believe that the employees should pay their own medical expenses. With this concept in place, the companies will be saving lots of medical bill money. Cons However, other quarters think otherwise (Champlin 913). Some institutions insist that the social as well as economic framework of our modern business environment place the employees in a precarious situation. The employees were left with minor bargaining strength. The effect includes the employees’ dangers of employment instability, possibility of being in the long line of unemployment individuals, inhumane and health-endangering working conditions, and substandard salaries paid to the employees. Private Sector’s Contribution to Health Economics Further, the institutional proponents insist that the companies should share with the medical bills of the employees since the companies benefit from the employees’ hard work (Champlin 914). The companies hire the employees to create the company’s products and implement the companies’ services. Next, the companies sell the employees’ accomplished services and finished products to the companies’ current and prospective customers. The companies generate revenues from the employees’ hard work. The revenues contribute to the companies’ generating net profits. Using this discussion, the institutional proponents proposed that it is but natural for the companies to share in the payment of their employees, being huge beneficiaries of the employees’ hard work and expertise. In addition, there are recent advances in health care economics (Glied 771). Health economics dictates that the patients’ ailments as well as accidents cannot be predicted as when they will crop up. For this reason alone, it is essential for employees to have healthcare insurance. To reduce the cost of healthcare, the people pay for health insurance. However, an estimated 40 million American are not covered by health insurance. The majority of those who are uninsured include the teenagers as well as those who are healthy elderly individuals. Further, most of the young uninsured people insist that they do not need health insurance because they are too young to succumb to diabetes, hypertension, kidney failure, cancer, and lung ailments (Glied 772). In addition, some of the elderly are not qualified for health insurance because of their age. In addition, many insurance companies do not accept individuals who have health issues. For example, the health insurance companies will frown when a person who had just a heart operation will apply for health insurance. The insurance companies will refuse a person whose physical exam exhibits medical ailments. In addition, health economics is focused on bringing back the sick members of society back their prior healthy status (Woodward 210). The author emphasized the people’s health should be publicly financed using government revenues. The government should be responsible for the rehabilitation of the people’s health. Since the government collects taxes from the people, the government should allocate a portion of the tax collection for the health services of its residents. If the government does not do its share of rehabilitating its people, the government should be blamed for economic slow down. If the people are sick, the people cannot work. If the people cannot work, the people will not able to pay taxes. When the people do not pay taxes, the government’s collection of tax funds will decline. Further, the market forces are contributes to United States’ health economics environment (Li 1803). The author insists that the United States government plays a vital role in the unrolling of the nation’s health economics policies. The government has a direct or indirect control of the prices of medicines, medical supplies, how the healthcare centers are run by the healthcare professionals. Consequently, the author insists that the government go over the extra mile to alleviate the people’s health, especially the poor people who cannot afford to pay the high medical bills. Moreover, there are other health economics issues that are important (Musgrave 7). The author states that the United States health care budget reaches to an estimated $1 trillion, in 1995 alone. The amount is expected to climb every year due to the nations’ increasing population. The healthcare allocation is huge when compared to the government’s gross domestic production amounting to $7.1 trillion. More than six thousand heath care centers receive both inpatient and outpatient clients that is estimated to overshoot the 35, 000,000 mark. There is an estimated nine million healthcare workers. The 450,000 medical doctors earn $150,000 during the year. Managed Healthcare In terms of health care services, some health care practices include traditional unmanaged fee for service care (Musgrave 7). More than 95 percent of the health economics issue pertains to managed healthcare practices. The single component of the health economics, representing more than 40 percent, is classified as fee for service. These plans may contain restrictions as well as incentives, depending on the health maintenance management organization, HMO. The terms of the health care policies include a required second opinion, previous approval, review of use, and year-end bonuses or hold backs. Under this strategy, the third parties pay for the medical costs of the patients. The health insurance companies, third parties, and government agencies shoulder an estimated 80 percent of the patients’ medical bills. The medical bills include the cost of the doctor’s professional help, the inpatient stay in the hospitals, medical laboratory fees, and medicines. Make or Buy Decisions Besides, Health economics includes make or buy decisions (Preker 779). Health care goods and services have some degree of rivalry and rejections, characteristics of a public good. May healthcare services include some externalities. The externalities include sanitation issues, control and reduction of communicable diseases, research, health promotion, and professional education. However some health care services cannot be classified as a public good. To avoid the spread of communicable diseases like HIV /AIDS, patients that are injected with a vaccine cannot pass on the remainder of the vaccine to another patient. Likewise, some patients can use their right to refuse the vaccination. Major Factors of health economics Moreover, the government has made progress in pinpointing the major factors that trigger wide variations in how health organizations maximize their scarce health care economic resources (Preker 780). Much government intervention includes transaction cost economics. To ensure success of the government’s health economics program, focus on the gathering of healthcare-related information, motivation, and innovation of the healthcare organization’s activities. The government takes a hand in the institutional healthcare economics. Healthcare economics delves into the creating viable infrastructures to enhance the healthcare organizations’ delivery of healthcare service, where the individuals working in the healthcare organization have diverse and often conflicting interests. Equally, healthcare economics includes caring for the economic demands of the healthcare workers (Preker 781). The healthcare workers need money to feed their families. The healthcare organization’s salary scale may encourage an employee to excel in his or her daily healthcare responsibilities. On the other hand, high employee turnover rate may occur if the healthcare organization’s salaries too low. Some of the health care organization’s current employees may resign and transfer to a competing health care organization that offers higher salaries and other benefits. Consequently, the health care organization must institute salary, promotion, and other benefit reforms to retain its best employees. To boot, the patient is an important factor in the success of health economics policies (Preker 781). The patient will not return to a doctor who is discovered to be ill-equipped to manage the patients’ health predicament. The busy patient will not return if he or she has to face a long queue of patients, waiting for 3 or more hours. In addition the government can refuse to accept the healthcare terms of the contracting private health care organizations. Health economics dictates that the agents or health care organizations will try generating as high a profit as possible from the principal, the United States government. Some agents, including some HMOs, may use means such as rent-seeking, cheating, contract breach, and incomplete disclosure to increase its profits from the principals. The principals may include the healthcare facilities and the United States government. Steps must be taken to reduce such self-serving health economic policies of the agents. Improvement of Healthcare System To improve the current health economics situation, health care organizations must increase the number of medical equipments (Dewar 141). The increase will lessen the patients’ waiting time. In some communities, the people must wait several hours because there is only one machine. However, the cost of buying the medical equipment may be too high for the health care organization to afford. To resolve the issue, the government may step into the picture. The government loan the amount to the health care organization. In turn, the health care organization can pay for the equipment in installment terms. Another way would be for the government to buy the required equipment and place it in its own government healthcare facility. Consequently, the health care organization can announce to the people that they can use the government’s healthcare facility. This way, the people’s immediate health care needs are met. Likewise, the government is able to resolve the impasse in terms of the people’s high demand for the required medical equipment. Medicines In terms of medicines, the government must do its inescapable role of giving the population affordable medicines (Emmett 93). The United States must push for the sale of generic drugs in order to allow the people to acquire lower priced drugs. The generic drugs are normally lower than the branded drugs. With the lower cost of drugs, more people can afford to buy the medicines. Understanding Health Economics Equally, the high cost of healthcare is understandable (Glied124). The health care organization must pay for the cost of the medical equipments. The same health care organization must pay for the salaries of its healthcare staff, services of the medical doctors, and other expenses of running a health care facility. To recuperate the costs and expenses, the health care organization must charge its patients. In turn, the patients must have the money to pay for the health care services. The rich patients can afford the high cost of the medical specialists and other medical costs. However, the poor cannot afford to pay for the medical specialists’ services, the room stays, medical laboratory expenses, and the medicines. To resolve the health economics issue, the government’s strong hand comes to the rescue. The United States government issues policies that will pave the way for the poor residents’ access to healthcare services, often free. CONCLUSION. Based on the above issues, healthcare economics incorporates all influences that ensure viable implementation of healthcare services. The suppliers and users of healthcare services will do their best to get a bigger share of the user – provider health economics equation. The effects of the different healthcare economics factors may be positive or negative. Evidently, the maximization of the healthcare economics factors precipitate to the successful serving of needs of the users and suppliers of healthcare services. Works Cited Champlin, Dell. "Universal Health Care and the Economics of Responsibility." Journal of Economic Issues 42.4 (2008): 913-918. Dewar, Diane. Essentials of Health Economics. New York: Jones & Bartlett Press, 2009. Emmett, Rose. Research in the History of Economic Thought. New York: Emerald Group Press, 2012. Getzen, Thomas. Wiley Pathways Health Care Economics. New York: J. Wiley & Sons Press, 2007. Glied, Sherry. "What Every Public Finance Economist Needs to Know About Health Economics." National Tax Journal 55.4 (2002): 771-788. Li, Dee. "The Economics of United States Health Care Policy: The Role of Market Forces." Choice 44.10 (2007): 1803. Musgrave, Gerald. "Health Economics Outlook: Two Theories of Health Economics." Business Economics 30.2 (1995): 7. Preker, Alexander. ""Make or Buy" Decisions in the Production of Health Care Goods and Services." Bulletin of the World Health Organization 78.6 (2000): 779-790. Santerre, Rexford. Health Economics: Theories, Insights. New York: Cengage Learning, 2009. Woodward, Robert. "The Economics of Health Reconsidered." Inquiry- Excellus Health Plan 40.2 (2003): 210-211. Read More