Current Economics in Healthcare
TOPIC: Assumptions of Competitive Model
Economics offers a framework that can simplify and improve management decisions. It is valuable as a foundation to healthcare managers for making the right choices. However, often the current traditional economic model is not working well in the healthcare field.
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https://www.healthknowledge.org.uk/public-health-textbook/medical-sociology-policy-economics/4d-health-economics/principles-he
Describe the underlying factors that are driving the traditional competitive model. Also, discuss why these factors are not implemented well in the U.S. healthcare system?
Justify your response with appropriate research and reasoning.
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USE THIS THIS TEXT AS A REFERENCE
Text: The Economics of Health Reconsidered, 4thEdition
Year:2016 Author: Rice, T. & Unruh, L.
Publisher:Health Administration Press
ISBN: 13: 978-1-56793-723-7
Free Essay Sample
Assumptions of the Competitive Model
The two aspects that control the supply of healthcare are demand and quantity according to the traditional competitive model. In the perspective of healthcare, the focus is on the need for healthcare. In the tradition competitive models, the increase in the demand for the product would often drive up the competition (Olsen 2017). In the same way, when the supply is high, the competition would be low (Rice & Unruh, 2016). The supply, on the other hand, means the availability of the products or services (Parkin, 2017). Looking at this aspect from the healthcare perspective, it is the availability of the healthcare services and facility closer to society. The supply might be understood from the resource input and goods output models.
The other aspect that emerges from the traditional competitive model is equity and efficiency. Efficiency focuses on obtaining the most output from given resources (Sen 2016). On the other hand, equity is a fair distribution of them out within the population.
There is a considerable challenge in applying this principle in the healthcare systems for several reasons. One of the significant resources is that there is no allocation of enough resources to ensure that healthcare supply the demands of healthcare (Rice & Unruh, 2016). With fewer resources available to ensure that healthcare meets the needs of the patients, there is a challenge of the efficiency of healthcare delivery.
In conclusion, there is a need for healthcare to operate based on the economic model. The model dictates that the supply should meet the demands. Therefore, there should be enough supply of healthcare needs according to the needs of the patients (Rice & Unruh, 2016). However, the biggest challenge that seems to exist in healthcare is that there is no allocation of enough resources to healthcare. It is essential to make a healthcare decision based on the economic model.
References
Emanuel, E. J., Ubel, P. A., Kessler, J. B., Meyer, G., Muller, R. W., Navathe, A. S., … & Sen, A. P. (2016). Using behavioral economics to design physician incentives that deliver high-value care. Annals of internal medicine, 164(2), 114-119.
Olsen, J. A. (2017). Principles in health economics and policy. Oxford University Press.
Parkin, D. (2017). Principles of health economics including: the notions of scarcity, supply and demand, distinctions between need and demand, opportunity cost, discounting, time horizons, margins, efficiency and equity | Health Knowledge. Retrieved from https://www.healthknowledge.org.uk/public-health-textbook/medical-sociology-policy-economics/4d-health-economics/principles-he
Rice, T. & Unruh, L. (2016). The Economics Of Health Reconsidered: Health Administration Press.
