Essay on "Health Care Market"

Essay 3 pages (818 words) Sources: 4

[EXCERPT] . . . .

433). In addition, the current state of the economy and the still unreliable status of health care are seeing both "losses in productivity and losses on an individual level" (Kovacs, 2007, p.A1). While the economic flows within the health care market remain the same, the amount of money being funneled through these channels has decreased significantly, especially in terms of government funding.

Supply and Demand and Pricing Decisions

Changes in supply and demand can affect both the equilibrium price and quantity of a good or service that is being distributed. Market equilibrium exists only when the quantity supplied is equal to the quantity demanded. Further, the equilibrium price is the price that "will generally prevail in a perfectly competitive market that is not subject to government intervention" (Case and Fair, 2007, p. 134). With changes in supply and demand also come changes in pricing decisions.

While the demand for healthcare is often viewed as inelastic, meaning that price changes have a small effect on demand for services, the pricing of these services is elastic. Author Susan Hosek notes that the price schedule for health care services can be quite complicated. The effective price that a consumer pays depends on many factors including coinsurance, deductibles, and upper limits on out-of-pocket costs of health care to the consumer (Hosek, 2008, p.45).

Conclusion

As seen, the market for health care goods and services is a volatile one in terms of the status of the economy. While the need for health care goods and services will always be prevalent, the choices that stakeholders and other consumers will make in terms of getting these goods and services will continue to vary dependent upon the financial aspects of the transactions at hand.

References

Case, K. And Fair, R. (2007). Principles of economics. Upper Saddle River, NJ: Pearson

Education, Inc.

Fullerton, D. (2008). How economists see the environment. Nature, 385(6701), p. 433.

Retrieved from: LexisNexis Database.

Hosek, S. (2008). The elasticity of demand for health care. National Defense Research

Institute. Retrieved from: http://www.rand.org/pubs/monograph_reports / 2005/MR1355.pdf, on 1 September 2011.

Hy, R. (2010). Economic impact of public sector spending on health care. Journal of Health and Human Services Administration. 34(2), p. 239. Retrieved from: ProQuest Database.

Jacobs, P. And Rapoport, J. (2003). The economics of health and medical care. Sudbury,

MA: Jones and Bartlett Publishers.

Kovacs, A. (2007). Competitiveness and modernization of… READ MORE

How to Reference "Health Care Market" Essay in a Bibliography

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