Question

why the production function evaluates the relation between the inputs and outputs is important in the healthcare field.

Answer 1

Answer : The health care production function is an important tool to evaluate various inputs such as health care providers i.e Doctor, Nursing facialities as well as technology advancement used to treat patient and what output has been generated by different level of input.

In the production of health care function the input of the health care are health care resources, physican, nursing facialities where as output is that life expectancy of human being has been increased and infant morality rate has been decreased.

The health production function describes that as more health care input are added than health care output has been increased such as :

• As we know on health our US government spend large amount of moneyspend so it is advisable to see that we have to increase health care facialities from the result of output. It is better to reduce health care expenditure and invested these funds into another productive useage such as housing, education and transportation.
• From health care production function there is diminshing marginal utility so that we provide input at that level where there is increasing marginal utility.

CRUX : Health care production function helps us to determine that the funds of the government in the input of health care aid is properly utilised or not. It tell us about law of diminishing marginal return and level at which we stop providing input facialities.