An aim of this paper is to discuss relevant issues in the healthcare service industry, a form of social contract in which the government, the industry, and citizenry all have a stake in its success. The new realities of the industry requirements in favor of a new social contract…
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It can be viewed as a service industry in which the consumers are patients who buy health services. In other words, the same criteria apply such as quality of service, reasonable costs and timely delivery of a needed health care service all determine whether a healthcare provider succeeds or not. The United States health care system is largely a private enterprise and so is motivated mostly by the profit incentive (Porter & Teisberg, 2004, p. 1) unlike that of other countries like Japan or the United Kingdom, where the healthcare industry is almost socialist in its nature as it is a state-controlled sector of their economies. There is supposed to be healthy competition in this industry but experience shows otherwise; the quality has deteriorated and costs have risen greatly over the years due to distortions or externalities in the system. The famous “invisible hand” of the economist Adam Smith is not working in this industry, whereby individuals acting singly for their own benefit is supposed to improve society as a whole (Smith, 1776, p. 28). Some factors causing this market distortion is that the pricing system is not transparent. The right price is supposed to regulate the demand and supply in this industry, just like any other industry, where pricing is the mechanism by which free markets operate in a capitalist economic system. The healthcare industry is no longer what it once was, a perfectly competitive market, but replaced by an oligopolistic setup due to the mergers and acquisitions taking place where the industry continues to undergo further consolidation among the service providers.
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(Social Contract on Healthcare Essay Example | Topics and Well Written Essays - 750 Words)
“Social Contract on Healthcare Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/macro-microeconomics/1603371-social-contract-position-essay.
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