Industrial Psychology

Healthcare Contemporary Issues in Health Care There are several factors that are driving up the cost of health care in the United States. Rising drug costs are a major factor in the marketplace. A PriceWaterhouse Coopers (2014) study showed that new drugs in particular are a driver of cost increases in the health care system. New drugs come with monopoly protections, and drug companies use this to extract monopoly rents on their customers to recoup the high cost of new drug development.

The use of new drugs over older, generic drugs that perform the same function drives up the total cost of health care. Another major cost driver that has been identified for health care is a shift in where health care is performed -- for example hospitals charge more for the same care in an outpatient setting than physician offices charge. A move towards more health care delivered at hospitals is spurring higher costs (PWC, 2014).

A third factor, taking a strictly economic look at the issue, is information asymmetry combined with low price elasticity of demand. In essence, consumers demand a high standard of health care, and are typically willing to pay a lot of money to have this, because of the negative consequences of inadequate care on the length and quality of their lives. This gives the industry low price elasticity of demand.

The insurance company as an intermediary, as long as it is able to pass on its costs to the payers, only makes this worse, creating a barrier between provider and payer, and taking a profit on this intermediary function. This combines with information asymmetry -- the payer knows almost nothing about the actual costs of the health care services they are receiving. It is at the point where a hospital can charge exorbitant prices for just about anything.

If the intermediary (the insurance company, which might have better information) does not challenge the charges, the payer (the insured person or their employer) has to pay. Yet these end payers have very little information, and providers exploit this information asymmetry to charge rates that could not exist under conditions of perfect competition. A functioning, open market depends on payers having a high level of information, especially when they have low price sensitivity.

That basic condition for cost control simply does not exist in a meaningful way in the health care industry. Critical Thinking I define critical thinking as the ability to think about a subject deeply, beyond the surface level of information that is presented. Critical thinking involves considering the critical questions about an issue -- who, what, when, where, how and why -- in order to determine greater insights than might exist at face value. All situations in life require critical thinking skills.

This is an example -- the prompt leads the answer when it says "discuss a situation in your life…" as that implies that not all situations require critical thinking. That's actually not true -- all situations benefit from some level of critical thinking, as rote acceptance of propositions you are presented with serves only the person making the proposition. For your own good, it is recommended to always think critically.

So when answering this question, I thought I wanted to touch on this issue, but also to demonstrate that I do understand what critical thinking is, because ultimately that is what the instructor wants to see in this answer. Industrial/Organizational Psychology The lore surrounding the advent of industrial psychology in the U.S. is that its need arose from the need to quickly assign.