Health Economics Essay
Health Economics Nowadays, economics have taken their high places in the countries, and they are necessary in the business field because they analyze the production, distribution, and consumption of goods and services. One of these economics is the health economics. Health delivery. The application of health economics reflects a universal desire to obtain maximum value for money by ensuring not Just the clinical effectiveness, but also the cost-effectiveness of healthcare provision.
Human usually maintain his life and accepts all the methods required to preserve it by following the efferent preventive ways at the level of individual and collective. Obviously, the disease impairs the humans energy, in addition to the expenditures incurred by him and the amount of production lost because of the absence from work.
From the material terms, the medical expense is a part of the humans individual expense because the person will need to buy the required medicine note that the cost of treating the disease increases as a result of scientific discoveries and the resulting complex devices to diagnose and treat the disease. But from the production terms, it’s known that the psychological situation of the patient affects his work and decreases the amount of the production. Also, being
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Consequently, if we considered that the human element is the effective moving element to make the economic development and social plans, his absence will be an obstacle and will delay the required things from him therefore, the raising level of population’s health is an essential goal that just be reached, either for securing the person’s Joy, or to raise the works production. Health care demand Health care is demanded as a means for consumers to achieve a larger stock of “health capital. ” The need for health is not like most other goods because the person assigns resources in order to consume and produce health.
The description gives three roles of persons in health economics. The World Health Report (p. 52) states that “people take four roles in the health care: contributors, citizens, providers and consumers. ” Beyond problems of the essential, “real” demand for medical care rived from the desire to have good health (and thus influenced by the production function for health) is the important differentiation between the “marginal benefit” of By Roy demand), and a separate “effective demand” curve, which summarizes the amount of medical care demanded at particular market prices .
Market equilibrium The five health markets typically analyzed are Health care financing market, Physician and nurses services market, Institutional services market, Input factors market and Professional education market. Although assumptions of textbook oodles of economic markets apply reasonably well to health care markets, there are important deviations. Many states have created risk pools in which relatively healthy enrollees subsidies the care of the rest.
Insurers must cope with adverse selection which occurs when they are unable to fully predict the medical expenses of enrollees; adverse selection can destroy the risk pool. Features of insurance market risk pools, such as group purchases, preferential selection, and preexisting condition exclusions are meant to cope with adverse selection. Insured patients are tutorial less concerned about health care costs than they would if they paid the full price of care.
The resulting moral hazard drives up costs, as shown by the famous RAND Health Insurance Experiment. Insurers use several techniques to limit the costs of moral hazard, including imposing escapements on patients and limiting physician incentives to provide costly care. Insurers often compete by their choice of service offerings, cost sharing requirements, and limitations on physicians. Consumers in health care markets often suffer from a lack of enough information bout what services they need to buy and which providers offer the best value proposition.
Health economists have documented a problem with supplier induced demand, whereby providers base treatment recommendations on economic, rather than medical criteria. While the nature of health care as a private good is preserved in the last three markets, market failures occur in the financing and delivery markets due to two reasons: (1) Perfect information about price products is not a viable assumption (2) Various barriers of entry exist in the financing markets. The health are debate in public policy is often informed by ideology and not sound economic theory.
Often, politicians subscribe to a moral order system or belief about the role of governments in public life that guides biases towards provision of health care as well. The ideological spectrum spans: individual savings accounts and catastrophic coverage, tax credit or voucher programs combined with group purchasing arrangements, and expansions of public-sector health insurance. These approaches are advocated by health care conservatives, moderates and liberals, respectively . Medical economics
Often used similarly with Health Economics, Medical economics, according to Culler is the section of economics concerned with the application of economic theory to phenomena and problems. Typically, however, it pertains to cost-benefit analysis of medicines products and cost-effectiveness of different medical treatments. Behavioral economics its suggested that behavioral economics is an important factor for improving the health care system, but that relatively little progress has been made when compared to retirement policy. Mental health economics includes a huge number of subject matters.
In addition, mental health can be directly related to economics by the potential of affected individuals to contribute as human capital. In 2009 Currie and Stabile published “Mental Health in Childhood and Human Capital” in which they evaluated how common childhood mental health problems may change the human capital accumulation of affected children. Outer factors may include the influence that affected individuals have on surrounding human capital, such as at the workplace or in the home. In turn, the economy also affects the individual, particularly in light of liberation.
For example, studies in India, where there is an increasingly high appearance of western outsourcing, have presented a growing hybrid identity in young professionals who face very different social and cultural expectations at the workplace and in at home. Moreover, mental health economics presents a unique set of challenges to researchers. In health economics, the health status of an individual may be given a value such as HEY (Health Year Equivalents); however, in mental health economics, valuations may not be the same for affected individuals. For instance a suicidal individual may place higher benefit on death than life.
Additionally, individuals with cognitive disabilities may not be able to communicate preferences. These factors represent challenges in terms of placing value on the mental health status of an individual, especially in relation to the individual’s potential as human capital. Further, employment statistics are often used in mental health economic studies as a means of evaluating individual productivity; however, these statistics do not capture “presentments”, when an individual is at work with a ordered productivity level, quantify the loss of non-paid working time, or capture externalities such as having an affected family member.
Also, considering the variation in global wage rates or in societal values, statistics used may be contextually, geographically confined, and study results may not be internationally able to be applied. Though studies have demonstrated mental health care to reduce overall health care costs, demonstrate efficacy, and reduce employee absenteeism while improving employee functioning, the availability of comprehensive mental lath services is in decline.
Petersen and Rapid (2002) cite the three main reasons for this decline as (1) privacy concerns, (2) the difficulty of measuring medical savings and (3) physician motivator to medicate without specialist referral. Consequently, the research discussed five topics which are, health care demand, market equilibrium, medical economics, behavioral economics and mental health economics. Health care demand explained the relation between the health care demand and people’s four roles in the health care, which are contributors, citizens, providers and consumers.
Market equilibrium main goal is to make equality in the markets. Generally, the main issues that market equilibrium faces are that in the shortage, the demand is more between health economy and medical economy, and the importance of behavioral economics as it is a factor for improving the health care system. The research also discussed the difference between the health economy and the mental health economy, it also showed the relation between them. * References From Wisped : http://en. Wisped. Org/wick/Health_economics from Journals Elsevier : http://www. ]urinals. Elsevier. Com/]renal-of-health-economics/