Question

1. The public interest theory and the special interest theory of government intervention have their similarities and differences. Compare and contrast these two theories and provide a recent example of each. ( Explain in details and add references to support)

2. How are Medicaid and Medicare similar? How are they different? ( Explain in details and add references to support)

3. Increased demand for health care services leads to an increasing need for health care organizations to be cost-efficient. What are the factors that impact an organization's financial viability? ( Explain in details and add references to support)

4. Discuss how the individual demand for health care differs from the aggregate demand for health care. Provide at least one example. ( Explain in details and add references to support)

Answer 1

1) Public interest theory

-Promotion of the general interests of society as a whole

-Restoration efficiency & promote equity

•Allocation of resources: produce where marginal social benefit (MSB) = marginal social cost (MSC)

•Encourage competition, Provide consumer information, Reduce harmful externalities, Redistribute income in society

-Enhanced efficiency and equity through laws and regulations

Special interest group theory:

-Amounts and types of legislation determined by the forces of supply and demand

•Suppliers of legislation: vote-maximizing politicians

•Buyers of legislation: wealth-maximizing special interest groups

-Overall fiscal package / political exchanges

•Beneficiaries: special interest groups

•Costs fall disproportionately on the general public

-Associated inefficiencies

2) Medicare is a federal program that provides health coverage if you are 65 and older or have a severe disability, no matter your income. Medicaid is a state and federal program that provides health coverage if you have a very low income.

3) The major contributing factors that affect an organisation's financial viability are :-

Hospital cost increases.

Provider prices.

Medical technology.

Waste.

Unhealthy lifestyles.

Aging population.

Taxes.

4) Individual demand for healthcare refers to the demand for healthcare service by an individual (or a household). Individual demand comes from the interaction of an individual's desires with the quantities of healthcare and services that he or she is able to afford.

Aggregate demand for healthcare :

The total demand for a country's healthcare and services at a given price level in a given time period.