Health care costs in the United States will represent 19.8% of national expenditure in 2020 from 17.6% and in 2009; the government paid a greater share of the total amount. The researchers estimated that portion of budget that the government will have to face is 45% to 49% in nine years. According to report, the average annual growth of national health spending will be 5.8%, or 0.01 percentage point higher than it would without the law of Affordable Health, exceeding the annual growth of GDP. There is one economist at the Centers for Medicare and Medicaid Services known as Sean Keehan who said "We project a decline in the share of money coming out of pocket (consumer), but that does not mean the consumer load is reduced substantially. It was especially because they believed that the health spending will grow at a faster rate than economic growth and personal disposable income (Aday, 12).
Ten key concepts of Health Care Economics
Scarcity and Choice
Scarcity and choice is general economic concept that is also applicable to Health care economics. Scarcity refers to the difference between what is available and what is desired. Health care resources in specific would always be limited when it comes to fulfilling the needs of an individual. Since the resources are limited, the individual would then have to trade off as to which of their health related needs are to be fulfilled and which ones should be left unfulfilled. Moreover, the scarcity forces us to make choices, when a person chooses to consume more of something; scarcity limits him or her to consume less of something else.
Opportunity cost in health care economics can be explained as the cost of the health care options forgone to get something else. Similarly, in health care economics, the time and money utilized to access medical facilities could be used for other leisure and recreational activities. Time spent acquiring medical services should be considered as part of health care costs (Himmelstein, 55).
It is the study of the outcome of minor changes in the existing outline of health care spending in a specified situation. The cost and benefit decisions related to health care services is made at the margin. In order to acquire the optimal allocation of health-related resources, the marginal benefit associated with health care services should equate the marginal cost associated with it.
It refers to motivation that encourages an individual or institution (health care institutions) to be the most efficient in making resource utilization and spending decisions, moreover the decisions being made might also augment the society well being.
Market and Pricing
In health care economics, market and pricing serves as the most substantial tool for efficient allocation of limited health care resources. The price in market balances the firm's decision of output level with the prevailing consumer demand. In a price sensitive mechanism, it is often becomes difficult for people to afford social goods.
Supply and Demand
The health care economics also follow the general economic law of demand and ...