Health Care Economics

Health Care

In the health system, all health care institutions of citizens, are of increasing importance in economic systems. This fact is reflected in the growing percentage of public and private spending on health in relation to Gross Domestic Product (GDP). In other words, the growth rate of health spending is higher than GDP growth. On the one hand, spending on health can be seen as an investment in human capital, as it contributes to economic growth and ensure an adequate level of quality of life, but otherwise appear legitimate doubts about the sustainability of that growth long term. All governments, all countries are in the process of reshaping the health system that responds to the need to improve aspects of efficiency, quality, coverage and equity (Himmelstein, 55).

Health Care Economics

The positive relationship between health and economic resources has been accounted widely in the past studies. Pritchett and summers (1996) found that the positive income effect on health is structural and causal using instrumental variables estimation with cross-country, time series data. Ettner (1996) revealed that an increase in income significantly improved mental and physical health using the same instrumental variable estimation (Terry, 25).

Resources

Economic resources calculated by equalized costs have a statistically noteworthy positive result on individual health. It is the consumption of medical care that cooperates like a mediator in clarifying the connection between health and economic resources. Dependable outcome are established when both self-accounted and nurse-evaluated health signs are used and both wide and more precise gauges of medical care consumption are used. With the intention of evading the accessibility trouble of appropriate instrument variables, the link between health and economic resources by studying the intermediary role of medical care utilization was studied. Smith (2005) showed that new serious health events have a quantitatively large impact on work, income, and wealth. On the other hand, Case, Income protects children's health. As has been noted, it remains important to reconcile these results for better health policy (Malhotra, 25).

Health care costs have time and again risen 2 to 5 percent more swiftly than incomes and now make up 17 percent of GDP. Costs are unevenly distributed. 70 percent of total health care dollars are spent on the 10 percent of people who grow to be most ill during a year. because of the tentative and irregular allocation of medical costs, the majority health care is leveraged by third-party insurance mediators, who pool and transfer finances. Hospitals (34 percent) are the major users of health care finances.

Government is the major source of health care finances (47 percent). the majority researches into therapeutic techniques and new drugs is leveraged straight by government, or obliquely by cost-shifting expenses added to the prices of hospitals, surgery and drugs. Pooled financing in the course of insurance can make medical care into a shape of public good although services are consumed and provided in private operations between patients and doctors (Aday, 12).

Technology

From an individual perspective, insurance is a form of trade between time periods or between different possible ...