...Health Economics and Health Policy A critique of the methods used to measure and value health in cost-effectiveness studies submitted to NICE. Introduction The responsibility to provide data concerning “Good value for money” in regards to a new treatment or healthcare programme intervention has for itself a remarkable relevance. However, this information has become much more important in recent years due to the fact that we are facing a combination of unprecedented demand with the limitation of resources and the necessity of making decisions regarding priority setting in the healthcare system. Priority setting in healthcare means to determine what is most important in the context of finite resources as well as to decide who is going to benefit from a particular health care service as giving priority to one group of people inexorably implies taking it away from another one. (William, 1998). Nowadays, health care systems are facing the problem of how to set priorities in the allocation of health care resources in order to provide a high quality of care to those who need it and at a cost their governments can afford. All this happens in a time when people have greatest expectations concerning the care they should receive and the health care innovation offers broader options for interventions. (Littlejohns et al, 2012). In England the NHS has the obligation to provide a comprehensive and fair service for all and at the same time to promote an equal...
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...Running Head: HEALTH CARE AND ECONOMICS Impact of Economics on Health Care System [STUDENT NAME] [INSITITUTION’S NAME] [INSTRUCTOR’S NAME] [CLASS] Evaluation of the Impact of Economics on Health Care System In this distressing financial crisis borrowers are finding it harder to access capital for their investments. Due to this factor one of the most important industries in society; health care, is being affected. Economics and economic policies play a significant role in many aspects of everyday life, including the health care system of a nation. Health care systems alone contribute to about 2.5 trillion dollars to the U.S. GDP (Amadeo, 2011). The current credit crisis is affecting hospitals more than any other organization because of the increased amount of uninsured people looking for health care services, staff shortages, and the low reimbursement rates from Medicaid and Medicare. Due to this hospitals are facing an increase in debt and are unable to gain more capital or even refinancing their existing loans because it has become more difficult to obtain credit. Recently, reimbursement rates from Medicaid and Medicare have drastically decreased putting a financial burden on hospitals. There has been a significant rise in underpayments by both Medicaid and Medicare, having made an increase from 3.8 billion in 2000 to 32 billion in 2008 (Kiselev, 2010). As a result of these low reimbursements hospitals are having to ‘cost-shift’ which upshots in an augment in...
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...1 Measuring Economic Health Memo Felicia Tate-Harris ECO/212 – Week Four 3/21/2012 ------------------------------------------------- Rana Hashemi Haeri MEMORANDUM TO: Rana Hashemi Haeri FROM: Felicia Tate-Harris DATE: March 21, 2012 RE: Measuring Economic Health Gross Domestic Product (GDP) Economic growth is measured in terms of an increase in the size of a nation's economy. A broad measure of an economy's size is its output. The most widely-used measure of economic output is the Gross Domestic Product (GDP). GDP generally is defined as the market value of the goods and services produced by a country. One way to calculate a nation's GDP is to sum all expenditures in the country. This method is known as the expenditure approach and is described below. 2 There are four government bodies that are involved in the national fiscal policies: * Department of Treasury - The Department of Treasury is the main body that will manage and design the fiscal policy. * Office of management and budget - The office of management and budget, is the section of the government that will develop and analyze fiscal policy. * Office of the president - The office of the president has an input on the decision making regarding the fiscal policy. * Government accountability - There is a government accountability office that will audit the fiscal policy. The Effects of Fiscal Policies on the economy’s Production and Employment: A good fiscal policy means having...
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...MEMORANDUM To: Professor Sherry Glied From: Shraddha Kothari Re: Using Grossman’s model to evaluate how NYC’s new sick leave law will affect emergency room use Date: February 10, 2015 This memorandum will use Grossman’s model of production of health to evaluate how New York City’s new sick leave law will affect emergency room use. Grossman’s model states that a person utility is based on health (H) and other non-health related goods (Z) that the person consumes. The production possibility frontier for Grossman model shows the tradeoff between home good production (Z) and health (H). Unlike usual production possibility frontiers, an individual needs an optimal level of H to maximize consumption of Z goods. New York City’s new sick leave allows employees who work over 80 hours a year to use accrued sick leave. Based on Grossman’s model, the new sick leave law will not only help reduce the emergency room visits but also have other positive externalities. This is further explained as: 1) In Grossman’s model, health is a capital good. With the new law, a sick day will have a lower opportunity cost for the individual to seek immediate treatment (visit a doctor) or recuperate at home as there is no loss in earnings. Empirical evidence confirms this as 85% of individuals with paid sick leave visited the doctor compared to 72% of individuals with no paid sick leave. Furthermore, seeking immediate treatment reduces the likelihood of needing an ER visit. Statistics also demonstrate...
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...Kevin Pine Eco310 Professor Ambrose Test 2 1A. Market failure is a situation in which the allocation of goods and services is not efficient. In any given market, the quantity of a product demanded by consumers does not equate to the quantity supplied by suppliers. This is a direct result of a lack of certain economically ideal factors, which prevents equilibrium. Some major reasons that a free, unregulated market in medical care might night be optimal are: Imperfect information, asymmetric information, barriers to entry, and third-party payers. * Imperfect information is a major reason because in medical markets, patients are not fully informed about virtually every aspect of the medical transaction. These patients are forced to rely on their physicians to form a learned opinion on their illness, their diagnosis, and their prescribed treatment. In addition, patients are often confronted with the problem of little to no knowledge at all about prices and the quality differences among alternative providers. This lack of knowledge gives rise to asymmetric information, which leads to two important market defects. First, patients are not able to judge price and quality differences among providers. As a result, providers charge prices that are above the prevailing market prices for a given level of quality. Second, the agency problem, which arises when the physician serves as the patient’s agent, thereby leading the patient to delegate most of the decision-making authority...
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...After our Feb. 16th class discussion on physician behavior in health care markets, the outside reading assignment for this week (attached here) will involve exploring how we "produce" doctors and whether this process is in need of improvement. All of the following questions below should be answered and submitted via Sakai by not later than Tuesday March 1st at 5 pm Eastern time. Again, please note that I cannot accept files which are in .pages format, only those that are compatible with MS Word, are .txt files or .pdf files. A. The first reading is by noted health economist Uwe Reinhardt, entitled "From Physician Glut to Physician Shortage". For this reading, please answer the following questions: 1. Does he think that the Affordable Care Act and its impact on reducing those without health insurance will lead to a physician shortage? (5 points) 2. What are the two key factors influencing physician productivity in the delivery of health care? (10 points) 3. If there is a surplus of physicians, please address each of the following potential consequences of such a supply imbalance: i. Do he and other experts think that it is more likely that specialist fees/prices will fall due to competition or continue to rise based on cost considerations (5 points)? ii. What is their view about whether there will be more, about the same, or less overall health care services delivered by these physicians? (5 points) B. The second reading is from Catherine Rampell...
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...Essay: The Health Care, Universal Insurance and International Comparison of Health Care Syetem Introduction In recent years, the availability and affordability of health insurance in United States has becomes the subject of much debate. About one in seven American has no health insurance at all, and for many people who are insured, the cost of coverage is a financial hardship. This situation has led some people to call for the government to provide health insurance for all citizens like other developed countries e.g. Canada, United Kingdom, Japan, Germany etc. Under this type of system, the state government or the federal government would provide insurance coverage, fixed by taxes for everyone. Those who support government-run health care believe that it has many benefits, including universal coverage, lower costs, and greater efficiency. Opponents contend that such a system would require budgets controls, forcing the government to decide whether and when person can receive certain health service. They believe universal health care would lead to lower quality care, long delay, greater government bureaucracy, and greater tax increase. However, whether universal insurance or not, the current health care system needed a reform and I believe Most American will prefer Universal health insurance to any other health care system because it guarantee coverage for everybody. Thesis: the rising cost of health care is a very critical issue in public debate nowadays. The situation...
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...HISTORY OF HEALTH INSURNCE I stopped for a moment to imagine an average Americana’s world without a health insurance, what will become of such individual when the need for healthcare beckons? How will such individual offset the outrageous bill of healthcare? Health insurance is used in America to describe any program that helps pay for medical bills through the following: privately purchased and social insurance or a social welfare program usually powered by the government. Simply put, health insurance is any form of insurance that provides protection by offsetting the actual costs of medical services. Before the onset of federal government’s intervention on health insurance, it can be said that the onus were thrown to lower arms- the federal government left responsibilities to the state governments while state governments left responsibilities to the private bodies. However, America did have some funds which were provided for its members in sickness and death, but there were no funds for public programs during this said time which was between the late 19th and early 20th century. The public usually pay for their health care costs on their own, under what is known as the fee for service business model. Meanwhile, during the progressive era in the 1930s, while it was designing the Social Security system, President Theodore Roosevelt led administration explored possibilities for creating a national health insurance program, this was embedded in Roosevelt’s belief that no country...
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...Economics has what can be referred to as a “gold standard” of resource allocation mechanisms—the perfectly competitive market, which has the following characteristics. First, there would be many buyers and sellers with no single economic agent influencing the exchange of goods among market participants. Second, it is a homogeneous or standardized product. For example, goods that individual producers cannot alter or differentiate to collect a higher price. Third, there are no barriers to movement of firms into or out of the market. Fourth, there is perfect information about market conditions that is available to all market participants; and lastly, economics is a fully defined system of property rights in which ownership of all products and productive resources is assigned. In economic theory, the law of supply and demand is considered one of the fundamental principles governing an economy. It is described as the state where as supply increases the price will tend to drop or vice versa, and as demand increases the price will tend to increase or vice versa. Basically this is a principle that most people intuitively grasp regarding the relationship of goods and services against the demand for those goods and services. When supply and demand are in balance, the economy is said to be in equilibrium between price and quantity. Health can indeed be regarded as a fundamental commodity that is essential to a person’s well being, leading to a demand for improvements in it. Health does...
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...Health Care Economics 1 Term Comparison Paper Bernadette Cynthia Gibson July 28, 2014 HCS/552 Nancy Jennings Health Care Economics 2 Term Comparison Paper Demand, Economics and Supply Demand This paper will be discussing the definitions of demands, economics and supply and what how they play a role in health care. The definition of Demand: “The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. The demand curve is usually downward sloping, since consumers will want to buy more as price decreases. Demands for a good or service are determined by many different factors other than price, such as the price of substitute goods and complementary goods. In extreme cases, demand may be completely unrelated to price, or nearly infinite at a given price. Along with supply, demand is one of the two key determinants of the market price.” When it comes to demands in health care, we can look at scheduling. Patients will need to make an appointment to be seen, and scheduling can be done the same day or in the future depending on what the visit is for. If there is a high demand of patients and the supply is not there then patients will be scheduled on the Backlog Reduction Plan. These are schedules for the future with the intent to keep the workload down. Example: can another physician see a patient and how can the person be treated without having to come back. Health...
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...Measuring Economic Health Paper ECO/212 January 24, 2011 Nelson Lima Measuring Economic Health Paper It is important to take a look at the trend of the Gross Domestic Product when determining whether the economy is healthy or not. Production and employment rates can also help determine whether the economy is healthy. Understanding how fiscal policies tie in with these can also help determine the health of the economy. This paper will describe how the Gross Domestic Product is used to measure the business cycle. Also this paper will describe the roles of the government concerning fiscal policies. Finally, this paper will explain the effects of fiscal policies on the economy’s production and employment. GDP and the Business Cycle Economic growth is not a steady event. It tends to exhibit a pattern. There is first an expansion of above-average growth. Then there is a peak. Next there is a contraction of below-average growth. Finally, there is a low-point. The low-points are generally followed by periods of expansion. Then the cycle repeats itself. Although the cycle repeats, it does not repeat in a regular manner. These fluctuations in economic growth are known as the business cycle. Because the business cycle is related to economic activity, the Gross Domestic Product (GDP) is a strong indicator of economic contractions. “GDP is a monetary measure of the economy’s production, valued using the prices from a selected base year” (Rummery, PhD, 2002). The health of the...
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...The Cost of Preventive Care Veronica Lee Regis College HP-622-01-11FA, Economics of Health Care December 4, 2011 Is There a Real Cost Savings with Preventive Care? Introduction: On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law, which creates health insurance reforms that will transform healthcare over the next four years. The PPACA will ensure that all Americans have access to quality, affordable health care and will create the transformation with the health care system necessary to contain costs (The Patient Protection). One of those health insurance reforms started on September 23, 2010, which will provide free preventive care. The PPACA will eliminate co-pays and deductibles for recommended preventive care, including preventive care for women, provide individuals with the information they need to make healthy decisions, improve education on disease prevention and public health, and invest in a national prevention and public health strategy (The Patient Protection). There are some exceptions to the law for grandfathered insurance plans. This preventive services provision applies only to people enrolled in job-related health plans or individual health insurance policies created after March 23, 2010 (Preventive Care). This law is supposed to improve quality healthcare and lower costs for patients. This paper will discuss what effect the new law may have on the United States healthcare system. What is Preventive...
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...history of health care economics it has greatly evolved during it course and will continue to change. There are many factors that have influenced the changes of health care economics. Money and technology has definitely been the reason for the change of health care economics over the years. Money is want makes the economy evolve. There will be advancement in technology and there needs to be people are managing these to keep up with the changes. The U.S. has definitely progressed as far as influencing factors to change in new advancement of technology and medical care. Having a good financial manager in your organization will prepare for these upcoming advancements and changes. Money drives these advancements in providing successful health care industries. Most of the funding that comes to make these changes comes from insurance companies but it also affects patients. Patients have to pay for insurance and the money adds up. It can be very expensive to pay for health insurance as well as medical bills and prescription medication. Today in society we provide services in health care for money. Money creates revenue for the organization can pay for supplies, workers, and other things to keep the organization running. Before money was involved physicians would trade in their skills and work for supplies to help you live such as food, tools, cotton etc. In 1929 the first health care insurance plan was created for population. Before that time there had been some form of health care available...
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...Economics Economics can be defined as the science concerned with the production, distribution, and consumption of goods and services. In essence, it is the study of the material welfare of humankind (Apollo Group, 2010). Economics in health care is concerned not only with the financial aspects of the system, but how those financial elements impact patient care. Supply and Demand Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Demand refers to how much (quantity) of a product or service is desired by buyers. Supply represents how much the market can offer and the correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. The demand for health care is limitless as is evidenced by the number of people who use health care services on a day to day basis. Supply, however, is limited by the availability of medical resources and the skill to administer care effectively. Macroeconomics Macroeconomics studies the economy as a whole. Macroeconomic analysis studies the roles of the government, exports and imports, consumption, investment, government taxes, and other factors in an economy. In health care, the macroeconomic market is the entire country’s health care system including the way that it performs in terms of profit, loss and efficiency. Macroeconomics of health is concerned with parallel sets of large scale system issues...
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...Terms Comparison Paper HCS 552 May 25, 2015 Terms Comparison Paper According to the American Economic Association (2011) economics studies how people make choices when they want to utilize resources. This fundamental process links economics and health care together because health care professionals use economic principles in their everyday professional behaviors. Health care organizations do their best to use the same concept of economics when they decided how to allocate resources and plan how to use them because it is essential to their survival. Therefore, health care and economics are connected in the sense of sharing the same terms such as resources, quality, and cost. The objective of this paper is to analyze how the terms of cost, quality and resources are similar and yet dissimilar in healthcare and economics. Resource The term resource is defined as the product, asset, or other service with limited availability utilized to generate commodities and services that convene to human requirements and desires (Gretzen, 2007). As a result of these resources can be restricted, many economists, decision makers, and health care providers are forced to find ways to efficiently allocate resources within their organization in order to maximize cost effectiveness. Economic resources are also found to have a substantial and considerable effect on the utilization of medical care (Chung, 2006). Healthcare services are provided to consumers by the utilization of resources...
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