Distribution and Economic Consequences of Good and Poor Health
Worldwide healthcare has had high cost increment compared to the remaining economy. This is due to lack of insurance cover and rising cost of drugs (Goetze, 2007). Therefore, locating the market power and increasing and resource mobilization are key signs of health economy.
Increasing demand for physicians leads to high number of services given (Goetze, 2007) and the objective is to reduce the cost of time in hospitals. Doctors are challenged with rising premiums due to malpractice insurance and this distributed to consumers in the form of deflated prices.
It`s worth noting that many workers get insurance. However, insurance contributes to issues of non-competitive services and products. It should give low consumer costs but has resulted into little provision of care due to the physician not getting additional revenue, thereby making referrals. This overprovision leads to demand and increased premiums affecting the uninsured, growing firms and poor families hence hospital burden on finance.
Moreover, new technology has increased the cost in healthcare therefore insurance has to gather for the demand of services required by the consumers consequently leading to high premiums. Additionally, the prices of drugs accounts to a high percentage of government healthcares since pharmaceutical companies spend high percentage of their revenues in researches, development ads and promotions therefore it`s profitable but cost-effective. What`s more, aging population and big labor force makes the family members to use their assets to qualify for the Medicaid.
In summary, society should will to use its increasing GDP to cater for healthcare. Revenue battle to control market power in health care will still exist between doctors, hospitals and insurance companies.
Getzen, T. (2007). Health Economics: Fundamentals and Flow of Funds (2[nd] Edition). New Jersey: Somerset Press.