Uncategorized

Discuss The microeconomic advantages and disadvantages of the US system.

Health Care-Related Problem Essay

The UK and the US health care services are great examples of publicly funded and privately funded health care systems respectively. By assessing and analysing key findings from a microeconomic standpoint, we can see significant difference between the two approaches to health care provision.

First, the role of government interventions in the provision of healthcare is to balance the demand and supply of the services; as well as prevent market failures in the form of monopoly, price fixing, and exploitation. Insurance system is also introduced to avoid information asymmetry in the market. We then look into the UK health care service and see that a public funded system will attempt to discourage market failures by avoiding information asymmetry, negative externalities and regional monopolies. However, the National Health Service (NHS) suffers from allocation and productive inefficiencies.Health Care-Related Problem Essay The US system benefits from a competitive market model, this having higher levels of economic efficiency, innovation and quality of service. On the other hand, the US model is often criticised for not offering equal welfare to society, in addition, it leads to waste and the dominance of insurance companies. Finally, we will assess the role of a regulator when ensuring efficiency and competitiveness as well as discouraging market failures; whereas the role of a market form will ensure better allocative efficiency in healthcare provision.

Introduction

In the UK, the NHS has existed for over fifty years and offers health care that is free at the point of delivery for everyone. This service is funded by taxpayers for the benefit of those same taxpayers. However, the option remains available for people to purchase private health insurance if they so choose.

In the US, the majority of citizens have health insurance that is related to employment or purchases directly. The federal government only ensures public access to emergency services, regardless of an individual’s ability to pay. They also have publicly funded health care programs that cater to the elderly, the disabled and the poor.Health Care-Related Problem Essay

ORDER A PLAGIARISM-FREE PAPER

These are two significant examples of the two different approaches to health care provision: publicly and privately funded. In this report, we are going to look into the microeconomic aspects of the two models by assessing and analysing:

Health care features as policy interventions in the market

The microeconomic advantages and disadvantages of the UK system

The microeconomic advantages and disadvantages of the US system

The role of the regulators and markets in the provision of health care

Key Findings

Health care features as policy interventions in the market

In the majority of advanced societies, access to basic and emergency health care is considered an irrefutable moral right, regardless of gender, age or creed. But through what means should a government decide it has the right to control any health care system via administration and policy? Both systems contain state owned entities which provide free health services, funded by the taxpayer, although the limitations on state services differ greatly, defining the private and public services. By its very nature, a state owned entity requires policy interventions in its administration, in order to decide what services each government chooses to provide.

As a nationalised service, both UK and US government run monopolies on health care on some level.Health Care-Related Problem Essay At the same time, medical institutions such as hospitals may create localised monopolies since no other alternative may offer their services and economies of scale incentivise ‘the emergence of one large hospital in an area rather than a large number of small hospitals’. By definition, monopolies create economic inefficiencies through social loss such that a monopoly firm may retain higher profits from their personal gain. Where health care exists as a privately provided system, the same regulations and policies that are inflicted on all free enterprise may be used. Such policies exist to ensure perfect competition where possible, to prevent the formation of cartels or price fixing, and to limit the exploitation and advantages given to any natural monopoly.

ORDER A FREE PAPER

With free service, demand for health care from the common citizen is at its practical maximum. The role of government is to supply this demand to the best of its ability. Such, it can be seen that the government itself has a demand for a level of health care which creates an equilibrium against what the production firms can supply. Policy intervention is therefore required to choose the appropriate level of demand the government wishes to obtain, given the cost of supply, the health demands of the people and the level of funding from taxes.Health Care-Related Problem Essay

As the demand for health care is not a constant for any individual consumer, since accidents are unpredictable, a system of insurance has been adopted in many markets, whereby a prepayment to a firm is made, such that when demand for medical care is required, all costs are covered by the firm. The free health market funded by taxes may act as a proxy to an insurance system since taxes are paid regularly in exchange for returns via public services. With any insurance system, problems may arise if contracts are improperly defined or information is asymmetric, such that consumers are refused service if they are not adequately covered, or are unaware of the full extent of their insurance coverage. A policy and regulatory body may be necessary in order to ensure fair contracts are held without exploitation.Health Care-Related Problem Essay