Question

Use the quality maximization model to describe the role not-for-profit hospitals play in the diffusion of new medical technologies. Illustrate your answer on a graph.

Answer 1

• In non profit hospitals, some of the health care suppliers have significant market power so it is trickier to compare the prices of health care across the countries because we have to consider the different market power as well
• The government has the significant influences on prices even if they are not set by the government,prices are determind by the bargaining between hospital and drug companies rather than demand and supply
• Hospitals administration needs to work in conjunction with its physician and nurses to determine the best strategy.It may be insensitive to purchase the latest and greatest technologies that hit the market but surgical equipment has high upfront costs.
• Labour times of various trained professionals such as GP's, specialist, nurses, medical technicians, pharmacists and many others. Procedures and testing such as magnetic resonance imaging scans and laboratory analyses of blood samples.
• Under most health insurance contracts the marginal private cost of care to a household is less than the marginal social cost of providing that care