In the consumption of health care Essay

Submitted By kang_karen
Words: 916
Pages: 4
Open Document
In the consumption of health care, to what extent is a consumer’s sovereignty eroded? Be sure to use multiple economic concepts and illustrative examples in your answer.
Consumer sovereignty in healthcare implies that society benefits at large when healthcare organizations compete to develop high quality healthcare products while reducing the cost of doing business (reflected in low prices), and when consumers choose wisely among healthcare products by purchasing those high quality products at low prices.

, healthcare consumers lack the ability, motivation, and opportunity to choose healthcare products that are high in quality and low in price.

More precisely, there are three key differences between health care and other goods and services. The first market failure in health care relates to the lack of "consumer sovereignty". While individuals initiate the first contact with the health care system, it is providers who then determine the volume of diagnostic tests, visits to specialists and the needed prescription drugs. In other words, an individual cannot obtain hospital surgery or radiation therapy without the recommendation of a licensed provider. Thus, resource allocation in health care is not a simple function of the interaction between supply and demand as it is in a free marketplace. In fact, health care providers can affect demand in a way that is impossible in just about any other industry.
Second, there is a problem of "asymmetry of information" between the health care provider and the consumer because consumers are generally unable to determine for themselves the type of health services they need. Health care providers have a very large advantage over consumers in that they have the professional knowledge to determine what is best for their patients. Therefore, in a free health care market, this asymmetry of information leaves open the possibility of exploitation of consumers by providers. Health care providers can be placed in a situation of conflict of interest if they recommend care at the same time as they make their own living from it.
The third market failure relates to the "uncertainty of illness". Marketable goods – such as food and shelter or TVs and VCRs – can be properly budgeted for. This contrasts sharply with health care. Because illness is unpredictable, the demand for health care is likewise uncertain. Individuals cannot easily determine in advance an optimal pattern of health care use in a given year as they might do for food. More importantly, health care costs can also be enormous. Very few people can manage health care costs on their own.
What we call "consumer choice" is really just a choice among available market based alternatives, and it is not even true that corporations respond to what consumers want by developing new products accordingly. Instead, all of the evidence seems to indicate that corporations spend minimal amounts on research and development, and most of their money on "market research," which means finding the best way to convince customers to buy what's available, and marketing, which puts the market research into practice. That people still continue to buy things they don't need and probably would be happier without is more of an indication that people are susceptible to advertising than that people are necessarily happy with what's on the market.

Many market choices involve a variant of the prisoner's dilemma. Health care is an excellent example, in which individuals operating in a private market will try to maximize their own health care plan, which drives up costs for everyone and leaves many people without any access to health care at all. However, a publicly administered,
Show More

Related Documents: In the consumption of health care Essay

Intellectual Property Essays

associated with drug dependence affect a sizeable number of European citizens and constitute major problems for public health in Europe. According to current estimates, the prevalence of problem drug use (1) in the European Union (EU) Member States and Norway varies between two and nine cases per 1 000 of the population aged 15–64, indicating a large population at risk for serious health consequences. Most of the more than 8 000 acute drug-related deaths reported annually in the EU and Norway are due…

Words 1758 - Pages 8

Essay about Health Econ Assingment 2

and consumption of these particular beverages are a widely accepted practice in Canada, and among a majority of Western societies. According to a study conducted by the Centre for Addiction and Mental Health of Canada, over 80% of Canadians consume alcohol in moderation (Ialomiteanu et al, 2012). However, despite the popularity of alcohol consumption across a large population set, the negative consequences are becoming a fact that cannot be ignored. As a result of excessive alcohol consumption, chronical…

Words 3240 - Pages 13

The Failure Of Prohibition

reaching in purpose.”1 It is this social and economic experiment of noble intent that led us to this public health dilemma confronting us today. Even though alcohol is now legal in all states and was intended to cut back on crime and dependency, it has led to a vicious cycle of social and health problems. Therefore, I have decided to focus on the prevalence of excessive alcohol consumption by men in the State…

Words 360 - Pages 2

Essay on Health Economics

market for medical care services different from the market for a typical good or service. Uncertainty Asymmetric Information Third-Party Payers Government Intervention 2. List 3 effects that moral hazard has on the market for medical care services. Over Consumption Effect Monitoring Effect Shopping Effect Lifestyle Effect Technology Effect 3. List 3 examples of government intervention in the market for medical care services. Government Regulations Finances Medical Care - Medicaid/Medicare…

Words 3017 - Pages 13

Shraddha Kothari Assignment 1 B Essays

model of production of health to evaluate how New York City’s new sick leave law will affect emergency room use. Grossman’s model states that a person utility is based on health (H) and other non-health related goods (Z) that the person consumes. The production possibility frontier for Grossman model shows the tradeoff between home good production (Z) and health (H). Unlike usual production possibility frontiers, an individual needs an optimal level of H to maximize consumption of Z goods. New York…

Words 693 - Pages 3

Longitudinal Study Essay

Researchers broke their study into 2 phases. Phase 1 consisted using the English Longitudinal Study of Ageing to compare health deterioration and alcohol consumption. By comparing these factors researchers were able to observe how drinking habits develop over time. Participants were asked to answer questions regarding doctor-diagnosed and self-rated health conditions. These questions were asked as “yes, no, or do not know” and on a five-point scale. Based off of participants answers they were placed…

Words 597 - Pages 3

Essay on Prenatal Development Notes

organs will be fully developed and for a female producing eggs and a male will produce testosterone. Factors that affect the health and development of an unborn child Behavioural - Vaccinations - Alcohol - Diet\Nutrition - Drugs - Stress levels of parents Social - Social economic status - Obstetric care - Smoking - Housing - Access to health care Physical - Genetics - Chromosomal abnormalities - Disability status of parents\mother Positive Behavioural Determinants…

Words 1406 - Pages 6

Obesity: Obesity and Mental Health Conditions Essay

of many health conditions, including coronary heart disease, stroke, and high blood pressure, type 2 diabetes, cancers, high total cholesterol or high levels of triglycerides, liver and gallbladder disease, sleep apnea and respiratory problems, osteoarthritis, reproductive health complications, and mental health conditions (CDC, 2011). The health prevention strategies address the five target areas identified by CDC for preventing and reducing obesity, which are to increase consumption of fruits…

Words 451 - Pages 2

Essay on The Culture of Food in America

enable us to understand the concept of cultural diversity. The paper also explores divergence towards the “fast food” culture and its effects of the health of Americans. Two journal articles are used to further…

Words 2680 - Pages 11

Environmental Factors That Contribute To Longevity

interventions of medical care. Due to an increase of people there is also an increase of disease and infection. Leading causes of death in developed countries were primarily cancer and cardiovascular diseases, followed by injuries and respiratory diseases. The environmental factors that contribute to longevity are clean air, potable water, nutritious food, and safe places live. Our technological advances in agriculture, sanitation, water treatment, and hygiene have had a greater impact on health than our medical…

Words 793 - Pages 4