Question

You are an economics advisor to a U.S. Senator. The Senator is interested in sponsoring legislation to address the impact of rapidly rising medical costs, and has commissioned you to provide a briefing paper on the subject.

You know medical costs have risen faster than other consumer costs over the past decade, and decide to utilize indifference curve analysis to demonstrate how the cost changes have impacted the Senator's constituents.

Provide an explanation as if it were a briefing paper you will deliver to the Senator. In it:

- demonstrate and document the trends in medical costs

- assume the Senator is not an economist and is not familiar with indifference curve analysis

- provide some legislative suggestions to the Senator that utilize your economic knowledge

QUESTION: Utilize indifference curve analysis to demonstrate how the medical cost changes have impacted the Senator's constituents

Answer 1

The high and growing cost of health care is a significant issue which impact every section of society including general public, businesses, and government. Spending on health care, which is a accounted to be 17.7% of the U.S.gross domestic product (GDP) in 2018, has consistently grown faster than the overall economy of the nation since decades. The National Health Expenditure has given the above official estimates of Health Care. This surge in health care spending is due to higher Prices and inflation which includes major share of income distribution among hospital staffs (doctors and nurses) , higher hospital administrative services. Research and development in Health Care involves major spending. Scientists being provided with all resources so that their invention of drug will breakthrough World Health Care in treatment of non - curable Disease. This overall increase in Prices would affect the Senate constituency. The reason is higher medical costs burden would shifted to common people And their voting would impact Senate constituency. To win people vote and Senate constituency, Senate Committee on health should try to reduce health costs magnitude to certain extent like Bill introduced in 2019 which would reduce medical costs and increase the demand of generic drugs. Generic Drugs are cost effective. The overall Drug industry cost of production would reduce. Technology based health vaccine would be accessible to every individual which implies in economic terms Effective Distribution And allocation Of public good among beneficiaries. Maximum utilisation would be achieve with effective health care policy and lower medical costs for general public.