...The Analysis of Market Failure in the U.K and the U.S. Health Care System Contents Executive Summary 3 1. Introduction 3 2. Findings 3 2.1 The health care system in the U.S. 3 2.1.1 Adverse selection 4 2.1.2 Moral hazard 4 2.1.3 Market power (the pharmaceutical firm) 5 2.1.4 The Medicare-Medicaid 7 2.1.5 Suggestions and solsolutions...................................................8 2.2 The health care system (NHS) in the UK 9 2.2.1 Asymmetric informtion 9 2.2.2 Incentive problems 9 2.2.3 Market power of the health authority 10 2.24 Suggestions and solutions....................................................... 11 3. Conclusion 12 Reference List 12 Executive summary The main purpose of this report is to assess two approaches to health care, and briefly discuss market failures and the induced inefficiencies in them with the comprehension of applied microeconomics. This report will try to link the facts in health care provision with the essence of each health care system. Several practical proposals will be constructed. 1. Introduction Health care, as one of the most complicated public services, is an essential issue both in economic and social areas. The provision of health care is a matter of a whole nation’s welfare quality. In the contemporary world, there are two dominate but distinguishable health care systems. One is publicly provided...
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...way of helping others in need, for others it just them peace of mind. There are numerous reasons. Tuttle said that “organ transplantation remains the only life-saving therapy for many patients with organ failure” Tuttle-Newhall, et al, 2009). Various Stakeholders Stakeholders are vital to the organ donation market. These stakeholders have many responsibilities; one of the most important of these is informing the public of the importance of being organ donors. Stakeholders include hospitals, state governments, research laboratories, and the transplant facilities themselves. Unlike most health care markets, the organ donation market is one where patients are the marketers, prospective donors are the customers, and no payment is allowed in the exchange process (Clarke, 2007). Scarcity “In the United States, more than 93,000 people are currently waiting to receive organs; on average, five people are added to the national transplant waiting list every hour; and the current unmet need for organs results in eighteen people dying each day due to a lack of available organs” (Clarke, 2007). The numbers alone reflect the amount of scarcity with the organ donation market; this is why stakeholders have to make major and difficult decisions. Because there is a waiting list for organs, the scarce resources are becoming increasing limited each day. Some of the decisions are trying to decide who will be a qualified recipient. Every day the list of qualified donors becomes more limited...
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...Health Care Market and Organ Donation The writer will explain in the following paragraphs how the lack of resources affects the organ donation market, and the choices some stakeholders have to make. The writer will also describe economics flows that affect the health care market. The reader will learn what are some causes of change in supply and demand, and how the change affects the equilibrium price and quantity. The writer will also present if the pricing decisions for this market is elastic or inelastic, and how does that affect the decisions. Lack of Resources The market on health care for organ donation is very interesting at the moment because of the vital part physicians and hospitals play in providing health care, it is imperative to think if incentives would manipulate their decisions concerning organ donations for recipients. The scarcity of resources significantly influences this market because it is reliant upon donors and extremely specific to a match to be triumphant. The topic of organ transplant has a particular interest to the writer because her husband of 20 years was told 13 years ago he eventually needs to have a heart transplant. The writer ask if he could be put on the waiting list for a donor and was told it was not possible because he needed to wait for his heart to be worst than what it was; it was only working 19% and basically to be put on the list he must have been about to die to put him on the list, plus have some type of medical coverage. Once...
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...Nations". It was used to explain what a free market is. A free market is a market system in which the prices for goods and services are set freely by consent between sellers and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority. Within the healthcare market, a heavily regulated market, there was an opening for VIP care for those that could afford it. It is unregulated and should not be due the fact that the outcome of money paid for the services, pay for bettering the hospital. The Benefactor Society A free-market economy is an economy where all markets within it are unregulated by any parties other than those players in the market. In its purest form the government plays a neutral role in its administration and legislation of economic activity, neither limiting it nor actively promoting it (Meiners, Ringleb, & Edwards, 2011). Within this economy the healthcare market is heavily regulated which causes prices to be high and as well as needs and wants from consumers. The upper class consumers expect a certain level of attention and care. Because of these expectations there was an opening for a new market, VIP patient care. A term used by Adam Smith to describe the natural force that guides free market capitalism through competition for scarce resources is called the invisible hand. According to Adam Smith, in a free market each participant will try to maximize self-interest...
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...Health care Markets Ashley Jackson HSA 510 Strayer University Professor Renita Blake Health care Markets Analyses of the Health care delivery system The United States has no special type of nationwide system of the health care delivery. In order to obtain health care insurance, the individuals must buy it in the private marketplace, or it is given to them by the government. Part of the traditional health insurance plans, permits the unrestricted selection of the health care provider and compensates on the fee for the service basis, recently, it covers less than 30% of all the employees. There are basically two kinds of MCOs: Health Maintenance organizations and Preferred Provider Organizations. About 70% of the employees registered in MCOs. HMO is the health care delivery system that associates the insurer and producer operations. PPOs are the third party payer that provides financial incentives like low out of pocket prices, to registers who achieve medical care form the preset sequence of physicians and hospitals. The Medicare plan contains two parts: Part A is necessary and gives the health insurance coverage for the inpatient hospital concern, very limited nursing home services and some of the home health services. Part B the willingly or supplemental plan gives the advantages for the physician services, outpatient hospital services and the home health services. The US health care system is more expanded in terms of the production procedures...
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...to Health Care One out of every seven dollars spent in the United States is spent for health care services. This is a greater percentage than in any other industrialized country.1 The topic of health care arouses deep emotions and generates intense media coverage. How can we understand many of the important health care issues? One approach is to listen to the normative statements made by politicians and other concerned citizens. Another approach is to use supply and demand theory to analyze the issue. Here again the objective is to bring textbook theory to life and use it to provide you with a deeper understanding of health service markets. THE IMPACT OF HEALTH INSURANCE There is a downward-sloping demand curve for health care services just as there is for other goods and services. Following the same law of demand that applies to cars, clothing, entertainment, and other goods and services, movements along the demand curve for health care occur because consumers respond to changes in the price of health care. As shown in Exhibit A-1, we assume that health care, including doctor visits, medicine, hospital bills, and other medical services, can be measured in units of health care. Without health insurance, consumers buy Q1 units of health care services per year at a price of P1 per unit. Assuming supply curve S represents the quantity supplied, the market is in equilibrium at point A. At this point, the total cost of health care can be computed by the price of health care...
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...not afford health care? What would you do if you had to pay a lump some for healthcare no matter your financial state? This is where healthcare exchanges under the Affordable Care Act can help those in need of health care, along with giving people a choice. The health care exchanges under the affordable care act allows people to “shop” for a healthcare plan no matter their financial state. Health care exchanges under the affordable care act in Washington State includes healthplanfinder. Healthplanfinder allows people to “shop” for insurance coverage such as apple care, different coverages for their family as well as for their employees. Health care exchanges under the affordable care act allow for a free market because people have a choice of what particular health coverage they want under the health care exchange. Many people choose not to have healthcare due to the fact that they cannot afford it. healthplanfinder.org is a Washington State based website that allows people to search for a healthcare plan that fits their lifestyle and needs. When looking up plans one must first make an account based on their annual income then choose if the plan is for themselves, family or employees. There is also an option to choose either a Health Maintenance Organization,HMO, or a Preferred Provider Organization, PPO. A HMO insurance coverage is where someone can only go to clinics or hospitals under that specific insurance. For example, if someone is covered by Group Health and needs to...
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...of America (HCA) Analysis CPT Christopher F. Drum, CPT Scott Stokoe, LTJG Ann-Marie Noad U.S. Army-Baylor University Graduate Program In Health Care Administration A paper submitted in partial fulfillment of the requirements for HCA 5325 Strategic Management of Health Care Organizations 12 December 2003 Executive Summary Hospital Corporation of America (HCA) is a well-established, international health care industry leader that provides patient services on two continents. Ranked number one in both sales and profit rankings, HCA continues to provide quality health care as it expands into new markets. HCA provides its primary services through a variety of venues. In addition to its patient care mission, HCA has joined with the Federal government to provide education and scholarship programs. A strategic assessment of HCA was conducted to examine its current business strategies. A strengths, weakness, threats, and opportunities (SWOT) analysis indicated that HCA’s internal strengths outweighed its weaknesses and the external threats outweighed the opportunities. HCA’s current mission and values statements are sufficient to support its success, but improvements can be made in each. Primary strategic emphasis is through an application of expansion and maintenance of scope adaptive strategies. Secondary efforts include a limited application of market entry and competitive strategies. Applying a threat, opportunity, weakness, and strength (TOWS) matrix to analyze their strategies...
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...Jennings Term Comparison Paper In the world of Health Care, the economics are included as a part of plenty of choices we have to make. A group, a business, an organization and of course individuals chooses the way to use resources. Health Care and Economics are connected, only because economics plays a role in professional health care activities daily. Resources allocations are the only way that its recognized. An organization like health care has to have a method on how they will use there resources to their advantage. The economics of health care are able to combine the terms cost, quality, and resources. Resources are any source of aid or support. So a physical thing or special type of component has a boundary are availability considered resources. People use resources to help them live in their daily lives. Resources could be special support groups that can help people such as natural resources and human resources. There are times when the resources that we need are factors of production. Meaning the resources are something we need to bring forth or forward in order for it to work. Looking into the health care organizations, it bring forward something and it brings the natural resources to the table that is being used because the resources are being limited. Some organizations resources are needed. So the research and findings are the one that’s appropriate to use. Health care resources are used to help take care of people like me and you that’s why the resources have...
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...Entrepreneurship Health Care Product and Services Marketing Techniques Wali K Shakoor-Luqman I BSN, RN HCS/567 Marketing for Health Care 11/24/2014 Facilitator: Jackie Lucas FACHE Health Care Entrepreneurship Marketing Techniques Today’s health environment is governed by the concept of efficient deliverance of care, with the main objective of managing the transactions made between the patient and their providers using cost effective methods. The makeup also consists of consumer involvement in making wiser choices from the various marketing strategies used by the health care industry. The Unites States Health Care System is designed to plan and have control as to how resources are distributed. Due to harsh economic and changing times, health care has not been regulated closely enough to make sure United States citizens receive adequate resources for quality health care at an affordable cost (Getzen, 2007). The health care industry has so much opportunity for developing new businesses, but the entrepreneur has to be equipped with the necessary tools to meet the demands of the health care market. Health care organizations are serious about protecting the general public against the unscrupulous individuals using the get rich quick scams to exploit the consumer out of millions of dollars, based on trends or cosmetic related goods. As we know, obesity in the United States is an area of great concern. Health care consumers who suffer...
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...SAMPLE BUSINESS PLAN FITNESS PLUS, INC Disclaimer: This is a sample business plan, so the company and business information are fictitious. This plan reflects our standard business plan model, and changes in outline and structure can be made as per client specifications. Contents EXECUTIVE SUMMARY.......................................................................................................................4 GENERAL COMPANY DESCRIPTION....................................................................................................6 1.1 COMPANY OVERVIEW:......................................................................................................................6 1.2 MISSION AND VISION:.....................................................................................................................6 1.3 STRENGTHS AND CORE COMPETENCIES:..................................................................................................6 1.4 CHALLENGES:..............................................................................................................................6 INDUSTRY ANALYSIS.........................................................................................................................7 SERVICES OVERVIEW.........................................................................................................................9 3.1 SERVICES:............................................................................................
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...Channels are essential to the success of the health care system today. The role of pricing is to give the product or service its image. A health care facility that has quality products and services has to make sure that they also have a good pricing mix to attract new customers and to appeal to its customers loyalty. In today's society, customers are beginning to be sensitive to pricing of products and services because of the economic change. With the rise in prices, loss of employment and the health insurances issues on the minds of citizens in the United States, many are now searching for the best service or product that they can obtain for less. This paper will display the importance of pricing strategies and the use of intermediaries in the health care system. It. will explore the concepts of pricing strategies and marketing channels and their relevance to the health care system. Explain at least four of the seven steps for setting an initial price for a product or service, In the past, many physicians, customers and health care professionals thought it to be unethical and unprofessional to market the sales of health care products and services (Kreidler, 2008). The following will addresses how the health care facility can be successful in marketing its products and services. :These next four steps will show the importance of price setting. Selecting the Pricing Objective is when the health care facility positions its market offering. To obtain this, the facility must...
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...Health Care Service Corporation Market Department To: Denise A Bujak, Vice President From: Market Research Assistant Subject: Summary Report-Information about Health Care Date: 28 June, 2011 The purpose of this memo is to summarize three popular writer’s views regarding the U.S. health-care system. Chris Farrell, Steve Forbes, and Greg Nelson analyze the current market trends and offer us their methods to improve the economy of the health insurance industry. Summary In general, there are some flaws in the U.S. health-care. All three writers point out different ways to fix it. In their passages, the main point of distinction involves government intervention in the market. Farrell prefers the universal coverage on health-care, claiming that government intervention will promote the economy in the short-term. In contrast, Forbes hopes through macro-control to adjust the current insurance market. Nelson supports government intervention as a means to cut administration cost and help the health-care system run well. Discussion In their discussions, they hope health-care reform can speed up U.S. economic recovery and help most people are insured. For our company, I think we need to know more information about the U.S. health-care reform which is good for us to make a right direction in a long term. Now, we are starting to share their opinions. Chris Farrell adopts the health care reform, because he...
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...The Patient Protection and Affordable Care Act You are to write a four to six (4-6) page paper and provide responses to the questions posed below. The Patient Protection and Affordable Care Act, otherwise known as health care reform or the Patient's Bill of Rights, was signed into law by President Barack Obama in March 2010. This law has generated much discussion and concern on the part of all stakeholders. 1. Determine how this Federal law will affect market-driven and non-market driven decisions. The market-driven decisions will be affected by What are the results of market-driven health care? First, market-driven health care makes people feel insecure about their prospects for receiving health care when they need it. Second, it destroys the trust that patients once had in their doctors by making doctors "gatekeepers'' whose role is often to block access to care. Third, by making health care a commodity to be bought and sold like any other, it expands the growing economic inequality in the United States to include health inequality. Fourth, it pits health professionals against each other in competing physician groups and hospitals. These are four classic methods of social control: make people feel too insecure to challenge those in power, destroy people's trust in one another, make them more unequal, pit them against each other. Even before the rise of market-driven health care, corporations relied on the insecurity of health care to control workers. For decades, large...
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...competitive markets in health care can offer patients greater quality, more options, and lower costs. The Federal Employees Health Benefits Program and Medicare Part D serve as two illustrative examples of competition in health care today. Proper reforms to add further competition to the health care industry would be quite significant and would further America’s position as the world’s leader in health care for years to come. KEY POINTS 1. The body of peer-reviewed academic literature suggests that health care can and should operate like a traditional market. 2. Market-oriented reforms have the potential to improve the quality and cost-effectiveness of care, as demonstrated by the Federal Employees Health Benefits Program (FEHBP) and Medicare Part D. 3. Consumer-driven health plans are viable alternatives to traditional plans, and consumers should have the option of choosing such plans. 4. Proper risk adjustment mechanisms can prevent adverse selection. 5. Migrating toward value-based payment systems will result in greater quality of care at lower costs, in part by incentivizing the health care industry to make great strides in offering integrated care, innovative treatments, and personalized medicine. ABOUT THE AUTHOR Kevin D. Dayaratna, Ph.D.Senior Statistician and Research Programmer Center for Data Analysis Over the course of the past several decades, federal and state lawmakers have proposed a variety of initiatives to reform America’s health care system...
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