Health Economics: Considering Complex Nature of Health Care Delivery

This report delves into the field of health economics, examining the intricate relationship between economic principles and health care delivery. It begins by defining health and highlighting its multifaceted nature, emphasizing the importance of considering physical, mental, social, and spiritual well-being. The report then explores key concepts in health economics, including scarcity, resource allocation, and opportunity cost, demonstrating how these principles influence decisions within the healthcare system. It analyzes market dynamics, supply and demand, and the role of marginal analysis in evaluating healthcare interventions. The report defends the significance of understanding the complex nature of health and healthcare, arguing that it is crucial for ensuring efficient resource allocation and improved patient outcomes. The author uses their experience in healthcare to support the defense. The report also acknowledges criticisms related to health insurance, profitability-driven practices, and the impact of technology costs. The report concludes by emphasizing the interconnectedness of health care and the economy, advocating for informed decision-making to achieve desirable outcomes and improve client well-being.

Running Head: HEALTH ECONOMICS
health care economics
[Document subtitle]

HEALTH ECONOMICS 1
Defend or Critique the Importance of Considering the Complex Nature of Health and Health
Care when Examining the Economic Principles Related to Health Care Delivery
Introduction
Today, people view health in various distinct ways, mainly when it is very difficult to
differentiate that what is unhealthy and healthy. Most of the people do not rejoice the visit to the
clinic, but it is significant for the individual's well-being. Further, healthiness can be defined in
various distinct ways, but it cannot be explained in those various different ways. Being an
individual, I believe that if an individual’s mental, social, spiritual and physical being is not
consistent then it is measured unhealthy. Furthermore, using and examining the economic
principles will help in understanding the importance and the complicated nature of health care
and health to the health care delivery. Moreover, this report will help in understanding the
important principles of health economics like scarcity, production, resources and the opportunity
cost of the health care along with the markets, demand, and supply for the health care. Also, the
principles of the margin will be discussed in the report in order to defend or criticized the
importance and the complicated nature of the healthcare and the health.
Principles of Health Economics
The health economics is one of the various disciplines that might be utilized in order to analyze
the various issues of health care and the health. Further, the health economics is one of the
various topics through which the principles and the methods of the economy can be used
(McPake, B., Normand, C., & Smith, S. 2013). Further, the various principles of health
economics are being discussed in order to interpret the context of health care and the health and

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further deciding whether to criticize or defend the importance and the complicated nature of the
health care and the health. Further, it has been observed that the health economics tries to apply
the analytical tools and the methods which might be used for any service which the economy
generates.
Production, Scarcity, Resources and the Opportunity Cost of Health Care
The production needs the usage of the resources like labor and the raw materials, and further, the
production process is being used in order to convert the resources to the final services.
Furthermore, the inputs of the process of production are the resources like personnel (labor),
building and equipment (capital), raw materials and the land. Further, the output of the process of
production using the inputs of the health care can be professionals of health care, clinic and the
materials of the therapeutic. The conversion of the inputs into outputs impact the factors of
mediation, for example, the clinic is publicly or the privately owned.
It is being observed that there is the scarcity of the resources and the choices should be made
carefully while deciding what goods are going to be produced, how they can be produced and
how the services can be availed by the clients. Further, in the economy, there are not adequate
resources for the health care in order to meet the needs and the desires of the health which people
have and because of this reason the choice is being made between the needs (Drummond et al.,
2015). Moreover, the economists allude that the scarcity and the necessity to select are

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unavoidable and the ubiquitous and this gives rise to the important concept of the economy i.e.
opportunity cost. If the scare resources are being used in order to generate a service then further,
the resources cannot be utilized to generate other services. The opportunity cost is being derived
from the advantages which are forgone by not generating other services.
Also, the financial cost is being used in order to calculate the opportunity cost in some cases
only. Further, in the system of health, it is very important to fulfill the needs as compared to
wants. Therefore, it is very important to fulfill the needs of the clients with the optimum
utilization of the resources.
Markets, Supply and Demand for Health Care
The analysis of the economy markets through the theory of price. Further, the suppliers and the
consumers base the selling and the buying on the price which they have to receive and pay. The
more consumers will avail the services of the mediation if the prices are low but the suppliers
would like to sell more if the prices are high in order to maximize the profitability. It is being
observed that the presence of supply and the demand adjudge the price of the services of
mediation to the clients. Further, it has been researched that the health economy is very
complicated and the price theory is not the only model which is the reality’s accurate
prescription.
The supply of the health care is being analyzed in the economy in related but in separate ways.
One way is related to the input and output model of the resources (Gulliford, M., & Morgan, M.
2013). The mediation includes the problem of economies of scale. Another way in which the
supply can be analyzed is the structure of the market. It further contains perfect competition
which contains low prices and the maximized output. The other is the monopoly which has the

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greater power of the market and makes the larger profits along with the sustainable competitive
position in the health care.
The health care is not demanded as it is pleasurable but in actual, it can be unpleasant. Health is
much peculiar as compared to the health care due to its attributes. Further, in the content of the
ordinary services, the economics differentiates among the want, that is the need in order to
consume something. The effective demand is the important determinant of the allocation of the
resources as compared to wants in the mediation. But, it is being believed that everything
happens in the health care because of the needs and not for demands or the wants.
The Principle of the Margin
The economics of the health is being analyzed according to the principle of the margin. For
example, the significance of looking at the cost of the margin is the effect of the various schemes
which are being created to the inpatient cost of the surgical of the lower hospital by minimizing
the stay length through the time of discharge. The hospitals might have the information about the
average cost of the stay of inpatient which further can be used in order to calculate the average
cost on a regular basis. But, the cost of the inpatient stay is not consistent. Further, the average
contains the share of the treatment cost and the high-reliability care which occurs at the
beginning of the stay of inpatient (Jones et al., 2013). The reduction of the low-reliability days at
the end of the inpatient stay will save the less cost as it was expected. Furthermore, the marginal
cost will be calculated in relation to decreasing or increase the number of days which would offer
an accurate estimate of the savings. Therefore, the marginal benefit is being defined as the
additional benefit which is being achieved by the consumption of one additional unit of the
service.

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Defending the importance of considering the complex nature of health and
healthcare
Having the right and the accurate resource in the mediation can be the greatest factor in the
economics of the health by ensuring that the patients get appropriate check-ups and the
medications for the ailments and the adequate beds for the patients in the clinics. Further, the
places can be included like hospice, nursing, hospitals, etc. Furthermore, the personnel of the
health care will include the nurses, doctors, technicians of the lab, the staff of rehabilitation, etc.
All these resources will make the health economics run smoothly and the professional way on a
regular basis (Coughlan, M., Cronin, P., & Ryan, F. 2013). Moreover, the health and the health
care are complex in nature, and it is being understood while discussing the various principles of
the economy related to the health care delivery.
The technology is becoming more advanced day by day, and the hospitals are using modern
equipment in order to provide the mediation to the clients in the best possible way. However, the
usage of the new technology is somehow costly, and some of the clients are not able to avail
them. The government should offer some help to them so that they can avail those services and
get cured by the treatment. Further, the significance and the complicated nature of the health care
and the health should be considered in order to help the clients for their well-being in a positive
way. Therefore, the personnel of the healthcare is only required in order to work in a systematic
way by completely and accurately using the resources while offering the mediation services to
the clients.

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Criticizing the importance of considering the complex nature of health and
healthcare
The critique for the significance of the considering the complicated nature of the healthcare and
the health while examining the principles of the economy with respect to healthcare delivery are
like people are being victimized to the organizations of the health insurance and the network of
the healthcare along with vested enwrap in conflicting the plans of the health insurance. Further,
the business groups in the health care get after the maximization of the profitability in order to
achieve the sustainable competitive position. The supplier of the health control is the main
determinant. The original and the new technologies are not being used because of their high
prices, and most of the people are not able to avail the services of the new technology because of
the prices only. And as a result, they are not being cured (DiClemente et al., 2013).
Further, only the public health care organizations have the interference of the government and
the private health care organizations are only interested in maximizing profitability by using new
and advanced technology with the higher prices. The staff of the health care is somehow not
cooperative with the inpatient. Also, it is being observed from the economic principles that the
suppliers and the consumers offer and avail the services depending on the prices which are being
provided by the health care, the supplier only offers services if the prices are high and the
consumer will only avail services if the prices are low. Therefore, the nature of the health and the
health care is made complicated by the personnel of the health care only.

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Conclusion
An appropriate running system of the health care moves with the stable economy. Further, the
system of the health care and the economy are proportionate to one another like a down turn in
which one impacts the other. Furthermore, there are distinct factors like cost, the rate of
reimbursement, etc. which impact the healthcare. The system of the health care is competent
enough in order to make the appropriate decisions which help in achieving the desirable
outcomes. Being an individual, I would defend the significance of considering the complicated
nature of the health and the health care as I am working in the health care and I know that how
the health economics principles impact the health and the health care. Therefore, the clinics have
to improve their way of using resources and providing services to the clients to some extent only
for the benefit and the well- being of the consumers with the low prices and further this will help
in maximizing the profitability as well.

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REFERENCES
Coughlan, M., Cronin, P., & Ryan, F. (2013). Doing a Literature Review in Nursing, Health, and
Social Care: SAGE Publications. Sage.
DiClemente, R. J., Salazar, L. F., & Crosby, R. A. (2013). Health behavior theory for public
health. Jones & Bartlett Publishers.
Drummond, M. F., Sculpher, M. J., Claxton, K., Stoddart, G. L., & Torrance, G. W.
(2015). Methods for the economic evaluation of health care programs. Oxford university press.
Gulliford, M., & Morgan, M. (Eds.). (2013). Access to health care. Routledge.
Jones, A. M., Rice, N., d'Uva, T. B., & Balia, S. (2013). Applied health economics. Routledge.
McPake, B., Normand, C., & Smith, S. (2013). Health economics: an international perspective.
Routledge.