Economic Tools and Concepts Paper - Economic Tools and...

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Economic Tools and Concepts PaperEconomic Tools and Concepts PaperHCS 552 – Health Care Economics 1
Economic Tools and Concepts PaperEconomic Tools and ConceptsThe U.S. health care system is set to enter into a new era with the full realization of the individual mandate of health coverage as part of the Affordable Care Act in 2014. One of the most prominent topics in the society today is health care reform and how the government plays a large role in regulating the delivery of health care. Along with the health care reform the U.S. health care system faces the scarcity of physicians and nurses today. However, many factors exist that influence the control of health cares spending from an economic standpoint for the government and the health care organization. For example, the government funds Medicaid and Medicare to provide services to the indigent and disabled population. The economic tools used to discuss the role of government and the supply and demand curve, marginal analysis and elasticity concepts to show the difference between movement along and shift of the curves in the managed health care delivery system. Supply and Demand curveThe United States health care delivery system is the largest industry in the United States it self and even around the world. Currently, health care represents approximately 14% of the United 2
Economic Tools and Concepts PaperStates gross domestic product. Also, the government leads the healthcare market so it is crucial and beneficial to health care patientsto understand the health care systems. Medical care is a finite servicefor financial compensation and changes in demand may occur because of the absence or presence of health insurance plans. Government payer such as Medicaid, Medicare, third-party payer andprivate commercial insurance companies reimburse basic health carecoverage cost. Supply occurs because of medical provider shortages or surpluses as well as other determining factors. If the level of cost changes then the supply curve will shift. For example if the doctors or

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