Health economics: principles, applications, and policy analysis

Health Economics

There is avid debate in the United States about the current state of our health care industry. As a sector in the market economy, forces such as competition and macroeconomic factors drive the health care industry. Many people would argue that regular market forces and competition have not done much to improve efficiency of the health care system.

The nature of competition and the market economy is fierce. It is a constant game and battle about who can sell and produce more products or services in the most efficient way. Care and concern are far from the major factors driving competition. However, the health care industry in instinctually one that requires a great deal of care and concern for people and medicine rather than ferocity. Rather than improve efficiency, the health care industry is most likely to experience a reduction in overall costs and increased clientele. In other words, now the industry must care for a larger number of people on a much smaller budget. This may improve the bottom line financially; however, the patients under care of such a system will suffer dramatically as a result.

This is not a way to improve problems in our nation. The people who cannot afford healthcare still cannot afford healthcare. Even though the health care industry claims to achieve a higher efficiency through a market economy and competition, the bottom line does not change for the average citizen. Competition alone creates great expenses for the companies, which are driven deep into the cost of medication. Therefore, a competitive health industry does not improve the situation for the uninsured; often, it makes it worse.

In order for such a system to function properly, there needs to be a great deal of government subsidizing for those who cannot afford the health care costs. The health care industry would have to take some huge steps toward reform. For example, the industry should put a cap on medicinal costs to the patient and petition the federal government to step in the assist those in need. Another option would be for the health care industry to strongly petition the govewnremtn for a greater amount of research grants in order to improve the overall health of our nation. As such, patients will be spared the extra costs trickling down to them as a result of competition and forces caused by related expenses.