Econonmic Health Terms and History
Economic Terms and Health HistoryEconomic Terms and Health HistoryResearch is focusing on the undergone major changes largely in response to escalating costs is the United States health system, over the past two decades. To a highly interconnected managed care system from an unorganized compilation of physicians and individual clients the health care quickly has evolved. To define evolution, health care economics, and examine its history is the focus of this paper by creating a timeline of health care funding (Investopedia, 2013). Health EconomicsThe utilization, manufacture, and allocation of services and products are the science that studies economics. Concerned with the issues linking to the shortage in the allocation of health care is health economics. To establish the price for a particular service or product health economists use the concept of supply and demand. Affected directly by the relationship between the quantities demanded to the amount available is the price level of the product or service. Normally, if the demand is high the price will be high, and the supply is low, on the contrary, if the supply of the service or product is high, and the price will be low, the demand is low. An economy uses two types of analysis; the behaviors are explained by economists. Within an individual hospital the particular aspects of the behavior of organizations and individuals in a specified economy is examined by microeconomics. The general and broad aspects of an economy such as national and global trend indicators, the GDP (gross domestic product), produced by a nation, macroeconomics studies the value of services and products (RutgersUniversity Microeconomic Analysis, 2011). To reform health care to reduce expenditures and facing the rising costs of health care policy makers are now in debate. Under alternative policies health economists can help predict expenditures by estimating the price of elasticity of expenditures. Influencing the demand for a particular product or service elasticity provides a way of measuring how responsive supply or demand is to the changing factors in expectations about the future, consumer income, the prices of comparative services or products, or changes in preferences. The responsiveness of product demand to changes in one of these determinants measures the elasticity of demand (Investopedia, 2013). Because some are considered more important to the consumer elasticity varies among products and services. Consumers will continue to purchase these products and despite an increase in price they are more insensitive to changes in price because essential products and services such as health care are inelastic. Considered less important is an increase in the price of goods or serviced because the opportunity cost of buying will become too high, this can discourage consumer spending (Investopedia, 2013).
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