Health Care Economics | Assignment

Running head: HEALTH CARE ECONOMICS
HEALTH CARE ECONOMICS
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HEALTH CARE ECONOMICS1
Discussion:
Due to fluctuations in the price of oil as well as increasing healthcare costs, the
government will not be able to sustain future demands which resulted in the development of
public insurance of the public and private health care in Saudi Arabia. the government, through
its Vision 2030 and the National Transformation Program (NTP), has developed strategy to
address the challenges of the current healthcare system. This discussion will focus on of pros and
cons of private vs. public insurance in healthcare in Saudi Arabia in terms of assessments of
efficiency, information asymmetry, moral hazard, and adverse selection.
Pros and cons the private health insurance:
Private sectors are well funded and well maintained as it charges the high health care cost
from the consumers and hence private insurance are more efficient compared to the public
insurance. The private health insurance uses various technology to document information which
resulted in reduced error regarding information. It reduces the administrative cost that enables
health care services to spend less on the billing and decrease the pressure from the public system.
It also has short response time which may reduce adverse clinical incidents (Mensi et al., 2018).
Moreover, in terms of adverse selections, it has less adverse selection since buyers and sellers
have equal information due to the presence of technology.
Considering the cons, compared to the public health insurance, the rate of the moral
hazard is high as the population is required to purchase additional health care cost. Consequently,
the population of different demographics especially with the low socioeconomic or
disadvantageous area cannot afford the private health care insurance that resulted in the high
inequalities in terms of access to the health cares (Banafea & Ibnrubbian, 2018).