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PUBH6003 Health systems and Economics
Explain how a cost-benefit analysis and a cost-effectiveness analysis (taking into account health care outcomes) could be used to assist with resource allocation in relation to public health services and products. (you are not expected to perform the analysis, but you are required to understand the key concepts in economic analysis and say how you might go about the analysis)
The health care units can take the form of clinics, hospitals, nursing homes and even extends to med claims insurance policies and other health care services. They are normally ruin by a regulatory authority which is either funded by the government or depend on government funds that are directed towards a particular cause. Regulators can either be voluntary, profit/non-profit organizations and others governmental institutions that are directly or indirectly dependant on government funds. Correspondence and systems orchestrating among these distinctive differences in institutional types from a part of the health care service paradigm. They are often limited in their functioning and definite in their operations. For settlement, nevertheless, the counseling department utilizes the consistent wording of social protection movement system. The cost benefit analysis helps determine whether a particular health care business should continue with their operations or should shut down. Additionally they also give information about the relative costs of undertaking different policies within the centre itself that will change or improve its profit structure. In the long run this should aim at analyzing the trend at which costs and other figures are moving. Due to change in economic factors like standard of living and inflation rates, this figure also changes in accordance to it. Thus, the business should undertake measures that should adhere to the rising costs structure and still maintain operations (Alzheimer’s, 2015).
The costs effective analysis, on the other hands talks about the opportunity costs of opting for a particular policy change over another. It takes into account the net losses apart from the monetary losses that the company should adopt in order to choose a different policy. Say that a health care clinic in Surrey plans to install a radio-cardiac setup that involves a medically correct chemotherapy to reduce patient suffering. Nevertheless, in order to do that, it has to let go its plans to raise a floor above to accommodate more patients. If the clinic takes emergency patients as well, it needs to substitute treatment for cancer. So irrespective of the costs incurred by one of the investments, the company has to forgo another in order to achieve different objectives. Thus, this affects how the company should utilise its investment irrespective of the minor changes.
The psychological willingness to stick to a definite health care centre plays a bigger role in the patient’s minds who prefer relying on one unless its competitors take drastic steps to attract potential patients (Austin, and Wetle, 2016). Seen from a bigger perspective, the government takes steps to bring the healthcare sector in operation. The grants and aids are aimed at reducing the costs incurred by the companies to maintain their profits and for customers since they can easily afford it now. Thus, the cost effectiveness policy is more into operation in the healthcare sector since the companies are subsidized for the increase in operating costs gradually. Government expenditure form an important part of the fiscal policy undertaking by the government. Expenditure on health care constitutes a major portion. Different health care offices are concerned with collecting data that will try to understand the requirements and needs according to the trend of oncoming patients. For example in case of an endemic spreading out, it is the responsibility of the government to take immediate actions and not think about the costs of benefits of undertaking the investment. Particularly in case of contagious diseases like mosquito-inflicted diseases, government should do its best to stop it from spreading even further. Thus the cost benefit analysis is normally not in use by the health care units although private institutions still work on a profit maximization policy irrespective of receipt of funds. Economists define general welfare of the public in terms of freedom from diseases thus retaining enough poverty to generate capital and contribute to the general productivity. With unprecedented changes in the healthcare sector, it is easier to remain disease free provided that one has the ability to invest for it (Baum, 2016).
Identify the strengths and weaknesses of the public health system and gaps that exist. Explain the challenges in meeting demand and investing in health services and products in order to close those gaps.
Health care institutions have seen an unprecedented rise in turnover due to the increase in incidence of diseases and the ease of remedying them at a lower cost. This represents the overall rise in living standards the cost of applying for a health care for individual well being. The
National Health Expenditure Accounts division deals with utilization of therapeutic administrations organizations, which consolidates use on specialist's office costs, enormous number of contender for med claim and assurance (Zimlichman et al 2013). In the genuine sense, the extended rising in utilization on human health shows the general rise in prosperity. Appropriate resource allocation is a must and it indicates that the government is concerned with eradication of prevention of diseases. Added to it are the research and development divisions, which spend their time and effort in performing extensive research on the technological improvements that have reshaped the health care centre. By and large the public health system is concerned about the overall general public health and they maintain strict supervision on private and public health care units. It lays down certain rules and principles that guide their operation and are prosecuted on the event that it fails to abide by the rules. The general wellbeing is associated with staying fit and the development in human administrations units all around has incited the business thus showing critical criticalness (Boulware et al 2016). Either more than 58% of the health care centers are under the undertaking of non-profit organizations that are affiliated to the government or are factions of a private institution. While they continue running under the objective of giving restorative administrations organizations to the general people, they ensure minimum health care benefits to all. The idea for them is essentially to breakeven their costs. Supernormal profits earned, if any is directly re-invested into extending more services. According to the cost effective analysis, the idea is to direct costs of operation and expansion in a systematic approach that will aggravate profits and increase likeness of been chosen by the potential patients (Burwell, 2015).
Twenty percent of the health care units in operation are guided by government enterprises or are subsidized in certain areas of operation directly by the government. Whatever is left of the associations are totally private establishments, which are controlled by private foundations hoping to get benefits. In accordance with the data released by WHO, an individual spends an average of up to $9500 annually on health care units and medicines. This may include spending for medicines and medical equipments and they extend into issuing medical reimbursements and insurances to med claim policies for letting individuals secure their future investments on medical services or in case of emergencies. This constitutes more than 17% of the general GDP figures. In order to perceive the structure of the creating use on social protection workplaces, the United States spends more per capita on helpful associations in sharp distinction to other European countries, which signifies generally $4,637 in 2000. All things considered, these per capita figures contrast with 13.2 percent of the U.S. Total national output and to general national yield at about $1.3 trillion (Drummond et al 2015).
Describe a new potential health system reform you would implement in your chosen country to bridge the identified gap. Explain how your newly created reform would contribute to strengthening the public health system in your chosen country.
In the mid 20th century particularly during the world wars, the extreme fall in overall food production led to famines and death due to starvation (Levesque et al 2013). Poverty rose substantially and the government took massive steps to rejuvenate social well being by introducing rationing of food and certain primary living requirements like medical facilities. For that, people were delivered food coupons that could buy a certain quantity of food items depending on the general requirements and trend of food habits. Thus residents in a country could purchase food coupons of a definite denomination could buy certain quantities of rice while it could buy definite quantities of bread in a month in another country at an extremely discounted cost. Families could accordingly spend it on food items alone. In sharp contrast to providing monetary allowance of a similar value, food coupon programs ensured that the money is spent only on food items thus giving the labors enough strength to work especially in the post-war periods. Additionally, studies show that people tend to spend more on addictions and other non-necessary belongings if provided with financial additions. From the perspective of the supervisor of health care services I request the government authorities to opt for a medical coupon program that will ensure medical facilities for all (Duckett, and Willcox, 2015). This will not only aim to maximise the medical well being of the mass but also help them allocate their minimal resources towards well being in the form of investments for education, food and entertainment. It should act as a boost and helping hand for situation especially when instant medical attention is required. The medical coupon program should aim to make basic medical facilities available to all and should be provided according to surveys that tabulate the low-income families who cannot afford the high medical fees in private institutions. Apart from this, discounts and rebates should also be introduced in private institutions so that the public do not lose hope on detection of complex diseases like cancer. Governments may choose to raise the money chiefly through public funds and through donations made by investors. Allocation of the aforementioned resources should be done carefully in order to avoid discrepancies so that the most needy gets the medical coupon before someone with relatively higher real income. Thus this classification will enable everyone to take care of their never ending medical bills and those who can afford the bills can obtain medical help from private or government institutions (Folland et al 2016).
Instead of observing the relative costs of undertaking several policies for maintaining overall health. The government should ponder more on realizing the opportunity costs of taking that measure against not opting for it. Results will show that the former will further the social welfare figures and raise the per capita living indices. However in order to implement the program, the government should:
1.Take appropriate steps to let this policy be known and heard by the public. Hospitals and health care centers should be ready and fortified to sustain the substantial rise in patients due to the ease of obtaining medical services (Groves et al 2016).
2.A detailed survey should aid in take into account their real income of all the individuals in a society and carefully allocate the medical services coupon to avoid double allocation or improper distribution.
3.The method should be started on a small scale to accommodate for the increase in demand of patients. Therefore, the allocation should begin with the least poor to relatively less poor population (Gulliford, and Morgan, 2013).
1. Alzheimer’s, A., 2015. 2015 Alzheimer's disease facts and figures. Alzheimer's & dementia: the journal of the Alzheimer's Association, 11(3), p.332.
2. Austin, A. and Wetle, V., 2016. The United States Health Care System. Pearson.
3. Baum, F., 2016. The new public health (No. Ed. 4). Oxford University Press.
4. Boulware, L.E., Cooper, L.A., Ratner, L.E., LaVeist, T.A. and Powe, N.R., 2016. Race and trust in the health care system. Public health reports.
5. Burwell, S.M., 2015. Setting value-based payment goals—HHS efforts to improve US health care. N Engl J Med, 372(10), pp.897-899.
6. Drummond, M.F., Sculpher, M.J., Claxton, K., Stoddart, G.L. and Torrance, G.W., 2015. Methods for the economic evaluation of health care programmes. Oxford university press.
7. Duckett, S. and Willcox, S., 2015. The Australian health care system (No. Ed. 5). Oxford University Press.
8. Folland, S., Goodman, A.C. and Stano, M., 2016. The Economics of Health and Health Care: Pearson International Edition. Routledge.
9. Groves, P., Kayyali, B., Knott, D. and Kuiken, S.V., 2016. The'big data'revolution in healthcare: Accelerating value and innovation.
10. Gulliford, M. and Morgan, M. eds., 2013. Access to health care. Routledge.