Question

economic principles of trade, choice, opportunity costs, and scarcity, along with the law of demand. What are the potential positive and negative impacts of applying these principles to the healthcare industry? How do you think a healthcare organization should balance the economic principles described with issues of health, life, and death in terms of its policy decisions and strategic planning? Can you put monetary value on a life?

Answer 1

Hethcare organizations face the problem of high costs involved in certain diseases, as a result of which people who have budget constraint are not able to afford the healthcare services. If we look at the opportunity costs involved in this scenario is getting a less effective treatment or no treatment at all. Having no treatment at all will have a negative impact. If all the hospitals in the industry became profit oriented a larger chunk of the population will have no or less access to healthcare. Therefore, here comes the function of insurance. The importance of insurance is that it lets people afford healthcare. Also, there is a scarcity of good doctors as they have to clear a merit level exam in order to become doctor. Since, there are few doctors the price of healthcare remains high. However, healthcare has inelastic demand. Some people will have to go to the hospital despite the high prices. More investment should be made on public health care services so that it can help the poor section of the society. Insurance market should be regulated by the government itself and the it should be made mandatory.

You can put monetary value to life using value of statistical life. It is calculated when you divide the reduction in risk because of a policy with the number of years it will increase.