Essay on "Economics of Healthcare"

Essay 7 pages (1981 words) Sources: 3 Style: APA

[EXCERPT] . . . .

" (2010, p.10 In addition, "Not only are consumers less likely to discriminate on cost, but providers of healthcare services have greater incentive to provide medical treatments that are only marginally more effective at much higher cost. This is the opposite of how the price mechanism works in a free market, where consumers (who are paying out of their own pocket) search for the cheapest prices and providers work hard to provide services that are equally efficacious but less costly." (Boyapeti, 2010, p.1) Secondly, Licensure, which is the "practice of restricting entry into a market by forcing practitioners and providers to seek permission before doing so." (Boyapeti, 2010, p.1) A common misconception is that medical licensure provides consumers with protection however, holding a license provides no assurance of the individual's ability to practice medicine as some individuals receiving licensure many years ago are no longer fit to practice medicine. From the beginning of licensure, this practice "has been motivated primarily by the control of supply by organized medicine" and specifically the American Medical Association (AMA), which enables the increases of wages for individuals who are members of the group of, licensed practitioners and physicians. (Boyapeti, 2010, p.1) Thirdly, the largest portion of medical dollars in the U.S. is spent on treating patients that are overweight or obese and recent research has indicated that corn-based sweeteners have greatly affected American obesity. The growth of corn-based sweeteners is reported as a "direct result of the government's farm policy, which subsidizes corn production. A basic consequence of economic law is that when something is subsidized, more of it will be produced." (Boyapeti, 2010, p.1) According to Boyapeti, Michale Pollan notes as follows:

"Very simply, we subsidize high-fructose corn syrup in this country, but not carrots. While the surgeon general is raising alarms over the epidemic of obesity, the president is signing farm bills designed to keep the river of cheap corn flowing, guaranteeing that the cheapest calories in the supermarket will continue to be the unhealthiest." (Boyapeti, 2010, p.1)

Stated fourth is the problem with intellectual properly and specifically that Holders of pharmaceutical patents are free of the strictures of competition when deciding the price at which to sell the drugs they produce. In practice this means that drug companies are able to charge significantly higher prices than they could in a market free of government intervention." (2010, p.1)

Summary and Conclusion

The American healthcare system economics is a system that is constructed on government intervention and interference. It is no longer a system defined by healthy free market competition but instead by government restrictions and mandates. The healthcare system is influenced by employee provided health insurance, which results in the failure of consumers to be critical about physician and healthcare fees and in which licensure provides false security to consumers.… READ MORE

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