Question

The purpose of this assignment is to distinguish health economics from other forms of economic study.

Write a 500-750 word essay addressing the following criteria:

1. Analyze the differences and similarities between health economics and other forms of economic study.
2. Choose a health care organization or entity (e.g., hospital, nonprofit medical clinic, physician office, pediatric specialty clinic, optometry office).
3. Describe the following economic terms in the context of the selected organization or entity: Scarcity, Opportunity Costs, Marginal Analysis, Supply and Demand, Competition, Efficiency, and Market Failure.

Use two or three peer-reviewed scholarly resources.

Answer 1

Differences and Similarities between Health economics and other forms of economic study:

Health economics:

Economics is the study resource allocation , distribution and consumption. Health economics is a branch of economics that deal with the issues related to production and consumption of Health and Healthcare. Health economics handles various areas like health insurance, demand and supply of health services , evaluation of health systems , subjective and objective valuation of health systems etc.

Similarities between Economics and Health economics:

*Economics is the study of distribution of goods and services across a population ,   Health economics is the study of distribution of health services , especially the demand and supply of services.

* Both Economics and Health economics are focusing on efficient use and distribution of Scarce resources among the population, Economics concerned with the general goods and services and Health economics concerned with the Healthcare goods and services.  

Differences between Economics and Health economics :

a ) Economic is a science whereas Health economics is a branch of Economics

b) Economic is study or science of distribution of resources especially scarce resources, in the form of goods and services in general , Health economics deals with the distribution of Healthcare and functioning of Healthcare market specifically.

c) Economics ultimately aim for increased national output and improved living standards. Health economics aim to improve health outcomes and lifestyle patterns through interaction between Healthcare Providers , individuals and Healthcare settings.  

d) A good or service that has benefit/ utiity to the society is considered as an economic good

Health and medical care is considered as economic goods in Health economics.

c) In economics, goods can be traded in market place .

In Health economics, Health care services and products can be delivered mostly in healthcaresettings.  

2. Entity : Hospital

Scarcity :

It is an economic problem, it is the gap between the limited goods and limitless wants. In a hospital environment the scarcity can apply to the fewer physicians , nurses and other Health care workers, less resources like money and facilities, resulting in less supply of Health service despite of more demand .

Opportunity cost :

It is an economical term pertaining to the value of some thing ,that you give up for selecting something else. In a hospital investment is done to increase the outside decoration of the hospital infrastructure, that could have been used to buy more life saving equipments or ventilators, so that more life could be saved. Here the opportunity cost is the number of lives , could have saved by the more number of life saving equipments.  

Marginal analysis : Decision making after comparing the extra benefits gained from doing something that cost extra. Hospitals can take Decision on hiring a new specialist and open a new speciality within hospital after analysing the benefits( of income from the speciality consultation)  that outweighs the cost of opening the speciality.

Suply and demand : Relationship between the quantity of health services that the providers want to deliver and the quantity of services the patients want to recieve.

Competition : Competition in health care market is based on the quality of health services provided and the location of the hospital . Competition in health care benefits patients, as the hospital may try to improve the quality of healthcare services and may reduce the cost of services in order to compete with the other hospitals.

Efficiency : When the production share of eacj5 entity is Optimal, at the minimum average cost then we can consider it as efficient.  

When comparing with the inputs for a hospital like cost, material, time if the outputs like physician visits , Health outcomes are more , then the hospital is considered as efficient.  

Market failure : A situation in which the allocation of goods and services by a free market is not efficient, is called a market failure.

Net loss of economic value for a health care organisation in the Healthcare market   is called Market failure in the context of a hospital.