Elasticity In Healthcare

Words: 1501
Pages: 7
Open Document
Introduction Choosing a career path is a matter of passion for some, circumstances for others, and careful consideration and analysis of the microeconomic climate for Jenny. A career in medicine is a complex decision due to the large investments required upfront. Becoming a doctor requires a 4 year bachelor’s degree, preferably in the sciences and at a prestigious institution. During college, a science heavy course load will take up most to all of one’s free time. Another consideration is the cost of tuition for college, books, and housing. It is important to participate in volunteer activities as well as gain experience in the medical field. Finding time for extracurricular activities will be near impossible during this time as maintaining …show more content…
Hypothetical numbers are used to demonstrate the relationship. If the price of insurance co-pay increases from $10 to $20 to $30, the number of customers with the insurance plan would decrease from 100 customers to 80 customers, to 50 customers. (100-50)/(10-30)= 50/-20= -2.5 One of the biggest determinants of demand for health care is the elasticity demand for health insurance. Health insurance plans vary by co-pays, deductibles, coverage of services, coverage of prescription drugs, and requirements. An increase in copay cost, deductible cost, or decrease in services covered will lead to a decrease in members enrolled in the insurance plan. The decrease in members will then increase the demand for health care services to be covered by that plan. The price elasticity demand for health insurance is -1.8 to -0.1 (RIngel et al, 2005). Vox Day demonstrated how the demand curve looks in response to Obama care in Figure …show more content…
(2014). THE DOCTOR SHORTAGE...REAL? (cover story). Benefits Selling, 12(12), 34-38.
Creative Commons (2012): Theory and Applications of Economics (v 1.0), Section 16.1 Supply and Demand in Health Care Markets”
Day, Vox. (2009). Doctors Orders: Economics of Obamacare. WND, WND.com, http://www.wnd.com/2009/07/105088/
Han, K., Cho, M., Chun, K., (2013). Determinants of Health Care Expenditures and the Contribution of Associated Factors: 16 Cities and Provinces in Korea, 2003-2010. J Prev Med Public Health Nov 2013; 46(6): 300-308 http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3859851/
McRae, I., Butler, J.R.G., (2014) Supply and demand in physician markets: a panel data analysis of GP services in Australia. Int J Health Care Finance Econ 14(3): 269-287 Ringel, J.S., Hosek, S.D., Vollaard, B.A., Mahnovski, S., (2005). The elasticity of Demand for Health Care: A review of the Literature and Its Application to the Military Health System. RAND Health. National Defense Research Institute. 1-15.
Show More

Related Documents: Elasticity In Healthcare

Economic Tools and Concepts Essay

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…

Words 1619 - Pages 7

Externalities In Healthcare

of production or consumption of goods and services imposes costs or benefits on others which are not reflected in the prices charged for the goods and services being provided.’ In the context of alcohol, overconsumption can lead to strain on the healthcare system to tend to those who suffer from the effects of alcohol, and the police force, who have to deal with increased crime. Furthermore, every industry sector is affected by the absenteeism due to overconsumption, resulting in lost revenue. In…

Words 655 - Pages 3

Social Determinants Of Health Care In Canada

address and discuss such issues in Canada's healthcare system. At the crux of this issue lies a disparity in knowledge and expertise between health care professionals and patients, with practitioners possessing specialized medical knowledge that patients lack, this often results in significant knowledge differentials, otherwise known as a context…

Words 2002 - Pages 9

Economics Paper

Economic Terms and Healthcare History Ramona Johnson There are so many changes that are consistently changing and impacting our healthcare economics. Healthcare companies have been making changes to their systems and coming up with better financial strategies and organizational strategies that better fit there company needs. One very strong influence on the changes that have affected our healthcare economics is the economy. (“Are The Economics Of Healthcare Getting You Sick?,” 2014)…

Words 488 - Pages 2

Essay on Principles of Economics

economist would approach the problem of alcohol abuse. It will analyze how prescription drugs affect the demand and supply of other products and services in this country. You will read why the elasticity of demand is an important consideration when analyzing the impact of a shift in supply and why the elasticity of supply is an important consideration when analyzing the impact of a shift in demand. Finally you’ll see two examples of increasing-cost industries in Illinois and you’ll see why they have…

Words 508 - Pages 3

A Microeconomic Analysis Of Doctoring

advantageous, as well as whether she will ever know the flexibility of shifting gears from job descriptions to different cities as she rises in the profession. This paper notes the current state of the profession in terms of supply and demand, elasticity, cost of production, pricing, economic or normal profit or loss. It aims to help students like Jenny make informed choices rather than continuing to rely on guesswork and stereotypes about what it means to be a practicing physician. Demand…

Words 2508 - Pages 11

There was a time in Economic History Essay

for different operations and so forth. Insurance premiums increase because the expected income is thought to continually grow however, this is not the case. While premiums rise, average income is staying the same for most people. Many people see healthcare as being inelastice because if you have a medical condition you are going to pay a higher price then someone who is perfectly healthy. Even under Obamacare this happens after insurance companies see what types of problems a person is going to the…

Words 437 - Pages 2

ECON545: Project 1—Microeconomic Analysis Essay

pursuing a career as a doctor and on the best location to practice medicine. She got wind that I am currently taking a business course in economics and decided to e-mail me for information on the market for physicians in terms of supply and demand, elasticity, costs of production, pricing, and economic profit and loss. As a caring uncle, I definitely recognize the significance of choosing a career…

Words 1877 - Pages 8

Essay about Hcs440 History and Evaluation

A History and Evaluation The Economics of it All The American health care system struggles with availing itself affordably to the average American consumer, however through the use of basic economic principles such as supply and demand, price elasticity/inelasticity, micro and macroeconomics, and the evaluation of the United States current numbers for the Gross Domestic Product the cost effectiveness of the system can be evaluated to afford the reader a better understanding. American consumers…

Words 1852 - Pages 8

Taiasha Rhodes project 1 Essay

career choice to become a doctor or not. Jenny also would like to know the best places to practice. She asked for your advice and you decided to answer her questions by looking at the job market for a physician in the terms of supply and demand, elasticity, costs of production, pricing, and economic or normal profit of loss. This paper will analyze the physician market to determine if becoming a physician is good career choice for Jenny. Demand Determinants In the United States there are 691,400…

Words 1265 - Pages 6