Question

Consider a hypothetical scenario where BC expanded its capacity for MRIs which are fully insured by the public insurance system. However, a study reported that expanding MRI capacity in BC was associated with an increased income-gradient in the use of MRIs. Using Grossman's model, explain why the expansion of MRI capacity would increase the income-gradient?

Answer 1

A solution generalized to the health capital of grossman model widely used the assumption that person are able to adjust the health stock to the optimal level without any cost of adjustment. Human capital framework in grossman model demand for medical care by the individuals like time invested consumption of medical goods and services for the beneficiary consumption like utility provided by health. MRI gives us detailed images which give huge benefit for the brain study.MRI operating in its fullest capacity suggest that increased number of scanners are required for service volume being expanded.growth in the adoption of comparatively lower invasive procedures for diagnosis contributes to the risky income of the MRI market.increase in the number of clinical trials along with the efficiency of the MRI equipment is expected to further boost its growth.various strategies mergers and the acquisitions along with collaborations also partnerships for gaining competitiveness.