Economic Tools and Concepts
Economic Tools and Concepts As one leader in the free world more money is spent on health care in this country than any other industrialized nation. The major expense to the health care system is managing chronic diseases and illnesses. Each year trillions of dollars are spent on health care, which continues to be an economic burden in this country. The impact on the economy can be attributed to increasing health care costs, declining health of Americans, and decrease productivity among workers (Preventive Medicine, 2009). The goal of this paper is to discuss the various economic tools and concepts such as supply and demand curves and price elasticity, and marginal analysis in the managed health industry. The government has poured about 75%-80% of money dedicated to health care in treating not curing or preventing diseases such as hypertension, cardiovascular disease, and diabetes. The Centers for Disease Control (CDC) and evidence-based medicine confirmed that by eliminating poor diets, sedentary lifestyles, and smoking, the start of chronic diseases is prevented. This knowledge solidified the preventive medicine approach and led to an increased supply of health care providers, health and wellness programs, and increasing demand from consumers.
Supply Curve Changes in supply take place because of several determining factors such as shortages of preventive health care providers or an increase in health plan enrollments. If the level of cost changes the supply curve will shift. For example health care cost will increase if the income of the health care provider or other medical services increases. In addition, managed care plans have set rates and provide incentives to providers and patients by reducing or paying for preventive care services such as health risk appraisals, health screenings, and counseling. One way to manage health care costs is through the use of Supply Management, which the health care providers determine what type of care the patient
Supply Curve Changes in supply take place because of several determining factors such as shortages of preventive health care providers or an increase in health plan enrollments. If the level of cost changes the supply curve will shift. For example health care cost will increase if the income of the health care provider or other medical services increases. In addition, managed care plans have set rates and provide incentives to providers and patients by reducing or paying for preventive care services such as health risk appraisals, health screenings, and counseling. One way to manage health care costs is through the use of Supply Management, which the health care providers determine what type of care the patient
References: AIPM. (2002). Achieve an R.O.I. on Your Health Care Dollars. Retrieved Jan 21, 2012, from American Institute for Preventive Medicine (AIPM): Say Experts. Retrieved Jan 21, 2012, from American Academy of Family Physicians: http://www.aafp.org/online/en/home/publications/news/news-now/government- Preventive Services in U.S. Health Care Could Save Lives at Little or No Cost. Retrieved Jan 23, 2012, from Health Affairs: http://doh.state.fl.us/AlternateSites/KidCare/council/12-