HEALTH ECONOMICS

HEALTH ECONOMICS

HEALTH ECONOMICS

Health insurance has always been a part of the policies of the governments in the UK. The statistics in this regard are quite troublesome, about forty million English people do not have insurance coverage at all, and approximately twenty million English people do not have proper insurance coverage. We can find more or less similar reports about the sad results of not having proper insurance coverage. All the common suspects, who include the federal legislations, and the candidates for the higher posts, are asking for proposals in the health insurance market. The proposals for reform usually change in their specifications; however, all of the reform proposals recognize the major source of the issue as the failure of the health insurance market. The health insurance market has failed to perform up-to the expected mark, and if they are left at their own, they usually fail to provide services to a large group of people. (lbrnar 1997. Pp171)

The health care market is an imperfect market, and is terribly flawed, because, for starters there is a huge asymmetry of information from which it derives the majority of this market failure has "The Market for Health Services. 

The failures start at the point of definition of health as well. Is it a public good? Many politicians believe and think that health is a public good. A public good is one, which enjoyed by all who want it and that does not use or enjoyment that it diminishes or disappears and therefore can still be used or enjoyed by others. Instead, health, or health services if they are perishable to the extent that the use of these affect the use of them by others and, in so far that are using the resources, the possibility of access other decreases. (Craig 1998 Pp. 195)

Therefore, health is a public good. Health is a merit good. Moreover, what is a merit good? A merit good is a commodity that everyone has a right. Health is a right highlighted in the State Constitution. To correct this failure, the state intervenes offering health services through insurance or grants. (Burns 2004 Pp. 381)

This situation constitutes a major factor in the performance of the market for health services. As a market must be imperfect and subject to regulations motivated by their imperfection. 

The Information asymmetry leads to uncertainty with patients about the disease and treatments. (Bennett, 1996 Pp. 298)The patient, patient, user or customer does not know anything, or partially known, what is happening and therefore resorts to the one who knows (the medical provider) who directs the demand (demand arising from or induced) to a given action health, so that the provider, physician or other health worker becomes bidder-claimant. (Carter, Grace and Paul 1985. Pp54)

Another problem in the health care market is externalities. Externalities are the consequences, positive or negative, causing the decisions taken in any direction. The positive externality means that an action taken health benefits to the community or the common people. A negative externality occurs when a person knowing that this illness does not use health services and continues to propagate their evil affecting ...