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Economist
NAME: PARICHI SIMBARASHE

PROGRAMME: MCOM ECONOMICS

REG NO: R133750G

COURSE: MECO701

ASIGNMENT NO: 1

LECTURER: MR DZINGIRAI

QUESTION Discuss with the aid of diagrams how consumers and producers maximise utility and profits respectively overtime.

The paper aimed to estimate the cost of providing health care in district hospitals in South Africa. It is the mandate of the hospitals to ensure quality health care delivery. Primary health care service providers largely depend on the support they get from well established hospitals. A significant portion of government spending is allocated to hospitals as they form an integral component of a well functioning economy and these hospitals consume a large portion of given health care resources. The paper found out that in developing countries, hospitals consume 50% to 80% of public sector health care resources and 30% to 50% of the total health care resources. At district level hospitals consume approximately 70% of health facility expenditure. The paper indicate that health care resources are scarce hence the need for an efficient allocation (Shepard et al, 2000). There is high information asymmetry on the part of costs associated with the provision of health care services especially in developing countries and this therefore constraint the process of policy making and the processes of any other interested stakeholders (Flessa and Dung, 2004 , Adam et al 2003)
In South Africa, the health care sector experienced major policy changes due to changes in political framework. According to Mjekuvu (1995), the new government of SA had a great task of rebuilding the health sector which it inherited in a disgraceful state and thus as a stepping stone adopted the primary health care approach with the chief corner stone being the district health system. The major constraint in this development around year 2000 was limited financial resources and this slowed the refurbishment of municipality

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